I'm in a bad mood. I am leaving Japan within a months time, and I just came back from cancelling my phone contract. Even though I had been on contract with that company (DoCoMo) for more than two years, they still insisted that I payed the 104$ cancellation fee. Why would there be a fee to cancel your phone contract after using it for so long? Well, the Japanese phone companies are really weird.
First of all, there are only three major phone companies. This fact really kills competition, and the three companies pretty much do whatever they please. Japan has fewer phone companies for its 120+ million people than Norway has for it's five! As a result of this, all three companies charge outrageous prices for their services, and constantly trick you into buying services that you don't need.
In my case, the lady at the DoCoMo shop told me that the base charge would be free if I made a student discount contract. What she didn't tell me is that this "discount" comes with a mandatory 3GB 4G plan at almost 40$ per month! Don't even try to talk sense into them, if you signed the contract you better start downloading porn on the train or something because you are not getting your money back. They also gave me a service called "international call" that you can use if you want to pay MORE money to call home than you already were. How is this not illegal?
And those cancellation fees are also a result of lacking competition. To keep their customers, the companies instilled a cancellation fee for all contracts so that it would be harder for the consumer to move on to better deals. Because there are so few companies, all of them get away with doing this without consumers batting an eye. The good part is that if you are still living in Japan (not leaving like me), the other companies will gladly pay the cancellation fee for you if you agree to switch to their plan. It's like your money is being held hostage by the companies, because at some point you will have to pay the cancellation fee when you inevitably leave Japan for a longer period of time.
Thought you could just take your iPhone to Japan and get a contract with a Japanese company? From what I've heard, this is actually possible, but the companies will do whatever they can to convince you that it's not. If you just bought a brand new S6 from abroad and wanted to use it in Japan, they would go above and beyond to make you buy another brand new phone for monthly payments of around 20$ for two years. The truth is that they could just put a new SIM card in your phone and it would work like a charm. Scoundrels if you ask me!
Some Chinese friends of mine are solving this problem in an interesting way. They buy a phone with a contract in Japan, sell it to their friends back in China, and then go to a different phone company to collect the cancellation fee. Rinse and repeat, and they are actually making money from it. However, us western gaijins, who don't have the time on their hands to be constantly changing operators and selling phones abroad, have no defense against being constantly ripped off.
The Japanese Consumer Affairs Agency was established as recent as 2009, and are now pumping out laws and regulations that nobody is following. Whereas I would give consumer services as a call had this happened back home, I know that there is no point in doing that here. People here are already too used to having to be very cautious when buying anything, and bite the bullet when they inevitably get scammed.
Bottom line: As consumers, we will ALWAYS lose to the phone companies here, and foreigners who can't read 6-page contracts in Japanese are viewed as gold mines.