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I agree that SOME cancellation charges are clearly over-compensatory. When I feel that, though, instead of complaining I simply purchase the device WITHOUT signing a contract IN EXCHANGE for receiving a monetary BENEFIT in the form of a price reduction on the item in question. For example, when I purchased a Home Phone Connect from Verizon, the full retail price was $100. Verizon wanted a $175 ETF if I cancelled service before fulfilling my 2 yr contract, less $5 for each month of the contract I had completed. That ETF WAS over-compensatory AND as a result, I purchased the device at full retail AND DID NOT SIGN A CONTRACT!!! I then had no ETF.

IF you feel a cancellation charge is over-compensatory, THEN DON'T SIGN THE CONTRACT! To do so in exchange for receiving a MONETARY BENEFIT in the form of a price reduction and then complaining about it is, in my view, UNETHICAL. IF you don't like the price of an item, then don't purchase it!!!

Clarifying some points which you seem to be challenging

• Verizon sells this reconditioned, not new device for $170 and has therefore determined THAT to be the market value.
• Verizon offers a monetary benefit in the form of a $170 price reduction if the buyer agrees to sign a contract.
• The ETF, if you agree to the contract AND monetary benefit in the form of a $170 price reduction, is $175, less $5 for each month you complete of your contract.

If you choose to accept the price reduction when signing the contract, it would be unethical to not pay the ETF if you cancel prior to fulfilling the terms of the contract. If you feel the ETF is over-compensatory, don't sign the contract. If you feel the device is over-priced, DON'T PURCHASE THE DEVICE.