November 3 2009|01.11 PM UTC

Erik Chang

11 Ways Wireless Providers Screw You Over

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Talk to a random sampling of wireless phone users and you are sure to find one thing: dissatisfaction with their provider. Seemingly everyone has a horror story about two about “how bad Verizon is” or “what terrible signal strength AT&T has” or how “so and so has the worst customer service ever.” In fact, it would be tough to visit just about anywhere in the U.S. and fail to dredge up similar stories from just about anyone you met. All of this begs the question: why are people are so universally unhappy about their wireless providers? Here are 11 reasons.

Text Message Markup


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According to Consumerist, several wireless providers (including Verizon) “mark up the cost of text messages by at least 7,314% when compared to their rates for data transfer services.” Assuming a max text size of 160 characters and a transmission of 7 bits per character, that’s 1120 bits (or 140 bytes). Without a text messaging plan in place, you will find yourself paying 15 cents. Conversely, the very same phone can transmit 1024 bytes for just 1.5 cents via its data plan. As Consumerist puts it, “that’s $.015 per data kilobyte versus $1.09 per text message kilobyte.” Put another way, it equates to an eye-popping 7,314% markup!

Requiring Security Deposits for New Phones or Contracts


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Amazingly, wireless providers have begun pulling credit reports and demanding security deposits prior to handing out new service contracts to applicants. We addressed this in a recent Billshrink post and found that AT&T, in particular, “charges iPhone users with bad credit up to $800 as a security deposit!” Needless to say, requiring security deposits and pulling credit scores for services that impose no risk on the other party is incomprehensible. As one Billshrink commenter astutely lamented, “it would be like Home Depot asking what your batting average was before selling you a skill saw.” Making matters worse is how militantly strict the phone companies are following the collection of the deposit. Being late even a single day on a single payment is reportedly grounds for them to keep your deposit forever.

Enabling Paid Features or Services by Default


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A particularly sneaky tactic some wireless companies use is to enable paid features or services by default, whether or not you explicitly authorize them or even know about them. For instance, an individual who visits a store to sign up for a new contract may be told that various features are “standard” when in fact they are optional and enabling them increases the monthly price of the bill. Features commonly “stuck under the rug” in this manner include early night and weekend times (say 7PM instead of 9PM), extra texting capacity and in-network calling. For this reason, you should ask any sales rep you encounter to go down the list of features one by one, verifying which are truly standard and which cost extra.

Tying Certain Phones to Certain Providers


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One of the most frequent complaints heard among wireless users is how certain phones are locked down or tied to certain providers. Many people would love to own an iPhone, for instance, if it was up to them to choose providers. Most of us would find it outrageous if a TV we bought only worked with Comcast or a new laptop only got Internet access via AOL, but this very policy is alive and well in the smart phone industry. Fortunately, there has been talk in recent months about opening up the iPhone to other carriers such as Verizon.

Poor Signal Strength


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While wireless service has undoubtedly improved, the number one complaint remains poor or spotty signal strength. Even companies that claim to have fewer dropped calls are suspect, according to a Boston.com article analyzing their claims. In the article, Bruce Mohl points out that Cingular (now AT&T) Verizon and Sprint do not actually offer “any backup in its ads” which claim to have top network reliability or low dropped call rates. In fact, it is often unclear exactly what these companies are even claiming – is it claiming the fewer dropped calls “by a wide margin or a tiny margin?” These questions remain unanswered amidst a sea of poor signal strength complaints from customers of just about every service, depending on the area you are in.

Retaining the Previous Owner’s Information


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Wireless service is expensive these days, ranging from $50-$100 per month and in some cases much more. Given the hefty pricetag, one would think that having their own name show up on outgoing caller IDs was not too much to ask, but some providers think differently. According to a rising number of complaints on support forums, it is now common for phone numbers to remain associated with their previous owners, even after someone else has been using the number in question for several months. While this may seem like a minor annoyance, imagine the frustration of the people you call seeing someone else’s name on their caller ID when you are paying over $1,000 per year to use that number.

Mysterious Headset and Upgrade Fees


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Wireless companies lure people in time after time with “free upgrade” offers that promise newer phones in exchange for re-upping on their service contracts. But according to MSNBC, this often comes with strings attached, in the form of mysterious fees. As MSNBC’s Bob Sullivan explains, it works in the following manner: “You decide to stay with your mobile provider, upgrade to a new phone and think you’ve got a good deal, but two months later a $36 fee is slipped into your bill.” The size of the fee varies depending on your exact provider, but it goes without saying that any fee you discover after the fact, on a bill, rather than up front has screwjob written all over it.

Huge Disconnection Fees


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Perhaps the most heated outrage toward wireless companies is felt by those who get stuck with gigantic disconnection fees. No matter who your provider is, getting out of a wireless contract before the specified end date is not cheap. In some cases, cutting the cord with your current provider can set you back as much as $250! To be fair, it should be noted that these fees are spelled out, albeit in fine print. However, it is also worth noting that many wireless sales reps fail to mention them verbally to new customers, many of whom are too young or inexperienced to examine contractual language. Furthermore, the astronomical size of these fees suggest that they are not simply covering costs of termination, but serving as a separate revenue source in and of themselves.

Unauthorized Charges


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A growing number of wireless customers are reporting suspicious and unauthorized charges to their monthly phone bills. According to ClassActionConnect.com, the charges in question are “never authorized, for mobile content services and subscriptions they never heard of, from mobile content companies and merchants they often never knew existed, and for products they never wanted nor ever even received.” Making matters worse, ClassActionConnect has found that wireless companies are generally apathetic and unhelpful when their customers call to investigate the charges. In some cases, companies state flat out that the customer “simply must” have made the charges, even when it is blatantly untrue. Only after repeated calls and threats of legal action do some customers get refunds, which are usually only partial.

Dishonest Service Reps


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We already discussed how some wireless service reps misrepresent optional features as being standard. However, some take deceit a step further by promising wireless coverage to residents of areas that do not have it. TrumanIndex.com tells the story of a young college student who signed up with AT&T on the understanding that she could use the phone where she went to school in Kirksville, Missouri. To her astonishment, however, her phone bill claimed that half her calls were being made outside the area – apparently due to the fact that AT&T did not, in fact, extend coverage to Kirksville. Slapped with roaming charges and and then left without a phone for an entire semester at school, the young girl was told that she could either give up the phone or switch to a new provider – while remaining on the hook for the contract she signed under false pretenses with AT&T.

Misleading Advertising


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Finally, no discussion of wireless provider shortcomings would be complete without mention of misleading ads. It has become almost axiomatic in wireless that what the commercials giveth, the fine print and customer experience taketh away. My3Cents.com, for instance, dissects misleading statements made by MetroPCS, such as its promise that you can try their service free for one month when, in actuality, you have “less than one hour (including incoming and outgoing calls billed in unknown increments) to evaluate their service.” Despite claims of allowing consumers to “unlimit themselves”, MetroPCS is reportedly unavailable or spotty in several major cities, producing skepticism about just how “unlimited” they truly are.

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{ 19 comments… read them below or add one }

Buz Scott November 4, 2009 at 1:32 am

Greed will be the end of Mankind.

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groovy stratman November 4, 2009 at 1:53 am

you forgot how phone companies charge you for a FULL MINUTE, even if you only talk for a second. For instance, if you talk for 61 seconds, that amounts to billing for TWO MINUTES of talk time, not 1 minute and 1 second. So no matter how you cut it, you’re always getting the short end of the stick on this one.

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Michaela November 4, 2009 at 8:44 am

This is the reason I refuse to get a contracted cell phone. I’ve already been screwed over by Cingular before (they tried to charge me $2,000 for a $200 bill)…I don’t plan on being duped by any other company. Sure, I won’t have the coolest phone in the world, but I also won’t be wasting money on unnecessary features, either.

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Jaxrolo November 4, 2009 at 10:56 am

I have been a cellphone technician from the days cell phones first came out. Just imaging having to pay $1,000-$4,000 for the cell phone and outrageous monthly bills.
Even though prices have come down since those days, these call phones carriers are ripping people off.

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Ignorance is bliss November 4, 2009 at 1:49 pm

I can see when people have a problem with a whole company (such as apple) would be tied to one company (like AT@T). But they’re completely off base with having a problem with a particular phone model being tied to one provider.

Here is why:

The company spends millions upon millions of dollars to have the device manufacturer make the phone to THEIR specifications. The provider then has to test and market it and then purchase the right amount.

Nothing is free

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Sean November 4, 2009 at 2:21 pm

I can understand the early disconnect fees – to an extent. When you sign on to a wireless plan, you are usually getting a phone at a huge discount in return. It’s a bit of give and take in my opinion.

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Amy November 21, 2010 at 3:51 pm

Not true.
The big companies have duped you into BELIEVING their claim that you are getting a huge discount on the phone.

A full-qwerty slide-out Samsung phone (MPxl camera, browser capability, MP3 player, much more) is available from the no-contract companies for around $70 regular price, and about $50 on sale (this week at Target).

Since no-contract companies can sell the loaded phones for this price, you’re definitely getting screwed if you pay any more than this.

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Anonymous November 4, 2009 at 2:23 pm

Wireless carriers check credit scores because they subsidize the hardware and want to make sure you’ll actually be able to pay your bill for the life of the contract, so they won’t have given you a phone you don’t end up paying for. Not saying whether that’s right or wrong, it’s just not as insane as this article seems to think.

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rich November 4, 2009 at 11:54 pm

I have another to add, my 2 year contract is up from AT&T so I was looking for a new phone, only to find out that all ‘smart phones’ require that you sign up for an unlimited data plan, aka an extra $30/mo on your bill (which ruled out at least 1/3 of the selection). Not to mention even If you could get a hold of these without a data plan the features on them would be crippled by AT&T, so that the GPS, wi-fi etc would only work if you paid them a monthly fee.

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Patrick November 5, 2009 at 11:45 am

Great article.

You misused the phrase, “begs the question.”

http://en.wikipedia.org/wiki/Begging_the_question

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Aaron November 5, 2009 at 12:50 pm

@Patrick

You cited Wikipedia.

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Ming the Conquerer November 9, 2009 at 10:51 am

@Patrick – I’ve noticed this misuse has become quite common. Seems the actual definition is too hard for most people to understand and they just assume it means a specific question has become obvious to ask.

@Aaron – Congratulations! You are officially the new Captain Obvious!

Reply

Jimmy November 9, 2009 at 9:22 pm

Charging for incoming calls.
Penalty for early disconnect (not prorated) I understand the first 3 to 6 months but 15 months later?
Also you can not block all features. Or partially block features. If a teenager decides to lend a phone to another kid to call their parents and that kid unfamiliar to the phone goes to the internet that is a $2 mistake.
On smart phones they also charge you for the Multi media messages so even with unlimited text and picture messaging plan they charge per megabyte for the pictures.
Also having to buy application ONLY from the provider? Why is that legal

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Ray November 10, 2009 at 10:11 am

Disconnection fees are the worst…and it sucks because it’s by line, so if you have a family plan you’re looking at up to $300 per line! I recently moved to a place that doesn’t have good T-mobile service and was about 4 months ahead of my contract time and still have to pay $900 just in ending the contracts for all three lines. Not to mention a final bill. I honestly don’t even want to own a cell phone at this point.

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anonymous November 16, 2009 at 4:46 pm

Couple problems with the article.

1) the statement of overcharge of text messages over data. The comparison is not valid. The two use different resources which costs the carriers different amounts. Its the same concept as why regular USPS mail costs 42 cents while over night delivery of a letter can go up to 15 bucks. Both services delivery mail but one is faster and more reliable.
2) exclusivity of handsets is not unfair. like someone already said phone manufacturers take a lot of time to make the phone work on certain networks. Just because one carrier has a nice phone doesnt mean the others have to as well. Just like AT&T U-verse cable packages let you record on one tv and view on any other but DirectTV or Time Warner Cable doesn’t provide that feature. It’s up to the consumer to figure out who they want to give their money to.

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Vernon V November 17, 2009 at 1:34 am

@Patrick + Ming
There was no implication of logical argument, thereby one should assume that the phrase in question was not specifically referencing such terminology and take it more literally. In such a sense the words are not incorrectly used at all. Aristotle did not copyright the phrase.

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Bob November 17, 2009 at 1:36 pm

@Ming & Patrick:
To use the same wiki source, we must read the entire article.

“More recently, to beg the question has been used as a synonym for to raise the question, or to indicate that the question really ought to be addressed.”

and

“Using the term in this way, although common, is considered incorrect by prescriptive grammarians.[9] This usage is the result of confusion over the translation of petitio principii, which literally translates as “assuming the starting point”.[10]”

“Arguments over whether such usage should be considered incorrect are an example of debate over linguistic prescription and description.”

Unless this article describes itself to be for “Prescriptive Grammarians”, I believe living in the current age and accepting the common method of use over the archaic and obsolete method, is acceptable.

“Write for the people”, so they say.

With respect to the actual article:
- Up in the North, it’s just as bad. I was quoted a possible max of $400 for early withdrawl from a 3 year contract.
- Most plans are counted per minute, not per second.
- Over-limit rates are disgustingly over-priced.
- And they recently started charging for ACCEPTING text messages, but had no mechanisms in place to reject or accept text messages. This means a stranger with my number could easily rack up my charges simply by spamming my phone with useless text messages!

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Anonymous December 4, 2009 at 9:06 pm

T-mobile is a rip. I added 2 accounts to my main line nearly 2 years ago only to find that they have no record of these accounts ever having 5 faves (free to call #s) and have recently received a bill for over 800$. No record, even after the line was activated with the faves at the time the service began, nobody put that in a computer ever? I saw the rep do it. They claimed it was because our phones are older, does that make our account info disappear? They said we did not check it online every month to make sure our faves were in place, since when does a person have to double check that a company hasn’t decided to change everything about your account, as it suits the company. Lousy customer service admitted they should have had the info and reduce the bill to 400$, like that fixes their rip-off. Check you bills every time and the online info every month because apparently they are too moronic to maintain their databases, except where it suits them financially.

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Jun Jun February 28, 2011 at 12:07 pm

I’ll admit that I was reading this at first with a skeptical mindset; that the cellphone companies were not as bad as was being mentioned. But as I kept reading, I realized just how true everything that was said really is. I’ve always wanted to get a iPhone but thanks to all the ridiculous charges it would of ended up costing me way too much. So I just stick with my simple cheap phone forever dreaming on. Thank you for sharing this, I hope more people read it.

Reply

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