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Wireless Industry: Confusing Overages Save Consumers Billions
AT&T-Backed Group Insists Up To $2.4 Billion In Savings
by Karl Bode Wednesday 09-Mar-2011 tags: prices · fcc · business · wireless · bandwidth · consumers · caps · wireless
For years we've seen story after story where customers face ridiculous wireless data bills ranging from $10,000 to $60,000. The problem is a combination of consumers that don't read their contract details, don't understand roaming, and have no idea what a gigabyte is -- and carriers that intentionally make their billing confusing to prey on this -- then do a poor job of warning consumers before the bill goes nuclear. Last October Uncle Sam began the process of fielding input on possible consumer protections for wireless billing. Wireless carriers, of course, would prefer that nothing be done -- and have been waging a campaign to prevent anything from changing.

The latest salvo on that front is a new study by the Wireless Communications Association International, a group sponsored by companies like AT&T, Google, Sprint, and Clearwire. While most anti-regulation folks have naturally argued that "bill shock" rules aren't necessary, the WCAI is the first we've seen go so far as to argue that overages are good for you, insisting that American consumers save between $882 million and $2.4 billion per year thanks to overages. According to the WCAI, consumers are doing a perfectly fine job picking the best data plans for their need without consumer protections preventing price gauging or misleading billing tactics:

The data show a median charge for accounts going into voice overage once or twice in a year was $17.89 for one month and $41.83 total for two months. By comparison, plan increments for most carriers are about $20 a month, so overages would have to exceed $240 a year for a consumer to benefit by moving to a higher-tier plan. Among consumers with one or two overages a year, the report notes that fewer than half a percent encounter overages so high, in the neighborhood of $100 or more, that could be called shocking. In fact, the study finds that American consumers save between $882 million and $2.4 billion per year by effectively creating personalized price plans that combine set monthly fees with the occasional overage.

That's in contrast to the endless stories we've seen in the press about consumers who face bills in excess of $10,000 for service that shouldn't cost more than a few hundred dollars. It's also in stark contrast to a recent FCC study that claimed roughly 30 million Americans -- or about one in every six mobile users -- have experienced "bill shock," or a sudden spike in their bill not related to a plan change (the highest was $68,000, according to FCC data). It remains unclear if the FCC's rules will do much of anything -- and they certainly won't be as tough as the EU's, where users are required to set a monthly service spending limit -- with carriers required to repeatedly and clearly inform the user when they get close to that limit.

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Steve B
Premium
join:2004-08-02
Seattle, WA

Well....

I would say if consumers were smart they would choose the right plan that suits their usage as I do. However, there are some people that don't and that is just how life is.

Such astronomical overages shouldn't be allowed, service should be cut off well before $10k.

As far as this claim goes, I LOL'd. Its just insane to assume anyone could use the term "overages saves you money" and actually expect it to be ok...no matter how you explain it.

packetscan
Premium
join:2004-10-19
Bridgeport, CT

Re: Well....

I would rather have a brick in my hand, then a 10k bill when i got home
Answer Guy

join:2006-07-28
Grass Lake, MI
Reviews:
·Frontier Communi..
If I understand their claim correctly, they argue that for something you actually would never pay saves us money!

Just like every other issue, you can confuse people enough in your explaination to argue anything to be true.

Did you know that it is nightime when the sun is up?

DC DSL
There's a reason I'm Command.
Premium
join:2000-07-30
Washington, DC
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It makes sense...

...if you don't think about it.

Unfortunately, the vast majority of consumers is completely clueless and ignorant. Even worse is those who bitch about being screwed but refuse to push back against it.
--
"Keep calm and carry on."

Rob
In Deo speramus, God Bless the USA
Premium
join:2001-08-25
Kendall, FL
kudos:2

Re: It makes sense...

said by DC DSL:

...if you don't think about it.

Unfortunately, the vast majority of consumers is completely clueless and ignorant. Even worse is those who bitch about being screwed but refuse to push back against it.

Actually, it makes perfect sense. What they aren't telling us is that with better billing laws to protect the consumers, Americans could be saving twice as much
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Mr Matt

join:2008-01-29
Eustis, FL
kudos:1
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·Millenicom

Wireless Industry treats customers like mushrooms!

The wireless industry executives treat customers like mushrooms, keeping them in the dark and feeding them bullshit. The wireless executives seem to think they have taken Mr. Peabody's Way Back Machine to the 1980's, where customers receive 30 minutes of usage in a basic plan and pay $0.60 per minutes for additional usage. They will charge customers exorbitant rates for data until some regulatory action is taken. Of course our lawmakers who are lapdogs for big business will keep their heads up their ass where as long as they receive generous campaign contributions from the wireless ISP's.
SunnyD

join:2009-03-20
Madison, AL

Re: Wireless Industry treats customers like mushrooms!

They're high on customers? Yeah, I would be too if I was raking in billions.

morbo
Complete Your Transaction

join:2002-01-22
00000

AT&T's monopoly entitlement mentality

AT&T is stuck with an entitlement mentality that only a company that was a monopoly can have. They remember "the good times" when they had zero competition and could charge outrageous fees and consumers had no choice. This is just their attempt to get back to that time.

batterup
I Can Not Tell A Lie.
Premium
join:2003-02-06
Netcong, NJ
Reviews:
·Verizon Online DSL

Re: AT&T's monopoly entitlement mentality

said by morbo:

AT&T is stuck with an entitlement mentality that only a company that was a monopoly can have. They remember "the good times" when they had zero competition and could charge outrageous fees and consumers had no choice. This is just their attempt to get back to that time.

The Bell System did not set the rates for anything; they were all set by the federal or states governments. They government also mandated that service be provided to anyone anywhere in the tariff territory. Now you have what you wanted; an unregulated hustle a buck business.

Don't like at&t get Verizon. Don't like them get T-Mobile I don't see a problem.

morbo
Complete Your Transaction

join:2002-01-22
00000

Re: AT&T's monopoly entitlement mentality

Rate setting is the same as electricity or natural gas rate setting: guaranteed income and only a few PUC members to bribe/lobby.
milrtime83

join:2009-11-04
Katy, TX

Wouldn't expect them to be accurate but...


said by WCAI :
so overages would have to exceed $240 a year for a consumer to benefit by moving to a higher-tier plan.

But they conveniently leave out that consumers can usually just raise their plan for that one or two months (retroactively even) so they wouldn't have to spend that $240 a year to make up for it.

Xioden

join:2008-06-10
Monticello, NY

Re: Wouldn't expect them to be accurate but...

said by milrtime83:

But they conveniently leave out that consumers can usually just raise their plan for that one or two months (retroactively even) so they wouldn't have to spend that $240 a year to make up for it.

It may vary from carrier to carrier, but for the most part it isn't just for one or two months, they'll lock you in to a shiny new 1+ year contract at the new rates.

Romney2012
Defeat Obama 2012-Chg we can believe in
Premium
join:2002-03-03
USA
kudos:4

A cap on double or triple bill would be good

There doesn't need to be some massive regulatory system to handle overages. But a very simple rule that as soon as you go double or triple your average monthly bill, the service is cut off until a positive RECORDED request by the customer to continue is received.
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The Limit
Premium
join:2007-09-25
Greensboro, NC
kudos:2

Re: A cap on double or triple bill would be good

Why not do away with overages completely? Why not put a hard cap for minutes and data in place?

batterup
I Can Not Tell A Lie.
Premium
join:2003-02-06
Netcong, NJ
Reviews:
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Re: A cap on double or triple bill would be good

said by The Limit:

Why not do away with overages completely? Why not put a hard cap for minutes and data in place?

That should be an opt-in option.

The Limit
Premium
join:2007-09-25
Greensboro, NC
kudos:2

Re: A cap on double or triple bill would be good

Why? I'm not understanding this.

batterup
I Can Not Tell A Lie.
Premium
join:2003-02-06
Netcong, NJ
Reviews:
·Verizon Online DSL

Re: A cap on double or triple bill would be good

said by The Limit:

Why? I'm not understanding this.

Because people that know what they have and how to use it won't want to be cut off but keep talking and pay the extra charge. It would be like opting-in to block buying ring tones and such.

The Limit
Premium
join:2007-09-25
Greensboro, NC
kudos:2
Reviews:
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Re: A cap on double or triple bill would be good

Or those people can add extra blocks of minutes or data to their account. Judging from the price per minute on Verizon's 450 anytime minute plan, that's 9 cents per minute. Mark it up to like 12 cents per minute and charge by blocks, instead of the rediculous ~60 cent per minute overage fee.

As for data, charge by the gigabyte, something reasonable of course.
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KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK
Reviews:
·AT&T DSL Service
AT&T is terrible at "opting in" or opting out anything.

Just try telling them you want to block data or texts on your pay-by-use phone. Nope, can't do it. Sure, you can screw up the settings so it can't connect to the Internet, but you're stuck paying for incoming texts you don't want, even unsolicited.

Oh they have a system where you can dispute each text SINGLY, one at a time. Oh you might not win the dispute, but it's nice to know you can spend time filling in a form disputing a single text. Over and over and over--- or just pay for them. No, you can't block them.

You know what this is? Utter BS. Theft. The point seems to be switch to someone else. Too bad you don't find out this "problem" till after you've already shelled out the cash.

These types of business practices, along with unethical and immoral, out to be outright ILLEGAL.
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batterup
I Can Not Tell A Lie.
Premium
join:2003-02-06
Netcong, NJ
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·Verizon Online DSL

1 edit

Re: A cap on double or triple bill would be good

said by KrK:

AT&T is terrible at "opting in" or opting out anything.

Just try telling them you want to block data or texts on your pay-by-use phone. Nope, can't do it. Sure, you can screw up the settings so it can't connect to the Internet, but you're stuck paying for incoming texts you don't want, even unsolicited.

That is interesting. A Tracfone Moto V170 with at&t as the carrier has free incoming text. In and out going is three cents on all other phones. One can delete a message without open it too.

I have a broadband modem with Verizon. I got a ten dollar a month recurring charge on my bill from a company I never heard of. I called Verizon wireless and it was a third party that sells wall paper and ring tones. VZW was going to bust my chops about taking it off the bill until I explained I don't have a voice plan so wall paper and ring tones were of no use. I then had a block put on my account for this kind of crap.

The real sneaky thing about the bill was it was billed in a way that the minimum I would have to pay is two months. Cell carriers get a big chunk of the money they bill for these hustles. That is when it hit me that VZW is not Verizon POTS. Verizon POTS can't bill for anything without NJ BPU approval.

I find a Tracfone with Verizon as the carrier and my Verizon 4G modem work together fine; I can talk and do data at the same time no problem.

r120r679m

@torservers.net

right...

since when the wireless industry wants us to save money, ha ha ha...

cdru
Go Colts
Premium,MVM
join:2003-05-14
Fort Wayne, IN
kudos:5
Reviews:
·Frontier FiOS

Re: right...

said by r120r679m :

since when the wireless industry wants us to save money, ha ha ha...

Both of my previous contract renewals with T-Mobile my mobile phone rate has decreased with my family plan in addition to getting a pair of new phones (3 of the 4 being the latest high end smart phone, plus one Blackberry Curve) free. Both times, I just called, as for retentions, and simply asked, "What type of deal can you make me?"

T-mobile wants to make money off of me. Yeay they rather make "list price" profit off me, but they rather make less profit then no profit if I go elsewhere.
netposer

join:2003-02-06
Nashville, NC

Scare Tactics

Overage are purposely expensive to "make" you choose a higher voice and a higher data plan.

If the carriers really cared they would just "bump" you up to the next higher plan when you went over by xx percent instead of raping you at some insane cost per minute or cost per kbyte.

Hell, even the CSR's have a hard time explaining cost per KB, MB or GB.

Or maybe you buy a low end plan and by "overage insurance". Where you agree to pay the difference of the next higher plan instead of $20 per MB or 60 cents per minute.

That way you can feel confident that if you just happen to go over it's won't triple your regular bill and the carriers more than make enough off your overages.

MovieLover76

join:2009-09-11
kudos:1

EU Rules

The EU rules to inform customers when they've reached a certain limit of overages makes perfect sense to me.

That said rollover minutes is the only thing I like about AT&T I never have overages

IPPlanMan
Holy Cable Modem Batman

join:2000-09-20
Washington, DC
kudos:1

What a load of BS....

Hey AT&T!

I've decided that I'm going to attempt to bankrupt you with my unlimited data plan on my iPhone 4.

Overage this....

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