Oh Look, Another Completely Ridiculous Wireless Broadband Bill

from the ripping-off-retirees-is-our-business-model dept

Last week we highlighted the highly-flammable combination of users who don't read their contract fine print or know what a gigabyte is -- and carriers that seem incapable of properly alerting customers before their 3G bill requires a second mortgage. This week the Boston Globe has yet another story of this kind -- exploring how a Dover, Massachusetts man has been fighting Verizon Wireless over an $18,000 phone bill since 2006. The man (obviously annoyed about the impact this has on his credit report) missed the fact that his two-year contract with Verizon expired, and his new contract began billing him by the kilobyte. His son, who had tethered his phone to his laptop, quickly racked up thousands of dollars in overage charges after downloading 1,119,000 kilobytes. Verizon, for their part, were not particularly helpful according to state regulators:
"Kevin Brannelly, an official at the state Department of Public Utilities, tried to help the St. Germain family fight the bill because it did not seem right. "Never in my 25 years here have I seen such stubborn and senseless resistance to what is obviously a mistake," he wrote in an e-mail to St. Germain."

As with all these stories, Verizon justifies this absolutely insane markup over cost on their data service by insisting they at least made their ridiculously-constrictive pricing clear to consumers. Apparently not, given we've been watching a steady parade of these stories for years now. What has been made clear is that the cap and overage billing model isn't working for many customers. It also continues to be clear that carriers are doing a miserable job educating their users, and an even worse job implementing effective systems that alert a user before their bill goes utterly apocalyptic. While carriers often do reduce these charges after they're exposed in the press (though in this case half-off is still obnoxious) -- you have to wonder how many of these over-billing stories aren't being told.

Some carriers appear to be realizing that the millions to be made from ripping off retirees and the kilobyte confused isn't worth the endless bad press, and that helping your customers understand their bills might just help you differentiate your services. T-Mobile for instance is moving away from this cap and overage model, and last week announced they'd simply start throttling users back to slower (usually around 128 kbps) speeds should they cross their monthly cap. It seems like wireless carriers can either continue to rip people off until regulators get involved (or customers flee to more user-friendly carriers) -- or they can provide users with the tools necessary to help them adequately understand and control their monthly bill -- before it requires loan shark intervention.

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Filed Under: bills, mobile data, mobile phones
Companies: verizon


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  1. icon
    Derek Kerton (profile), 7 May 2010 @ 10:22am

    Re: Rain on the parade

    Sam.

    It's not that most people (or even more than a few) ever read and understood the contract.

    It's not that most people are careful and don't run afoul of bad pricing plans gotchas.

    It's that most people simply don't do the things that result in a gotcha ... by simple luck.

    But simply leaving the country with your smartphone powered up, and not even making one call is enough to jack up your bill. In fact, just driving alongside the CDN or Mex border, near to one of their cell towers could make you a Roamer even if you never left the US.

    Most people's "surprise" bill amounts to an additional $200 or so (my guess, since that what it often is for me when I travel). So they just pay, instead of a long battle.

    While you say it is .00000001%, I'll note that it's about 98% of people who travel.

    Any policy that makes a cellphone bill more like a bad luck lottery than a predictable usage-related tally is bad policy.

    And any company that provides a service like the telcos should be required to red flag bills way out of ordinary, and contact the customer for approval. Here are some precedents:

    - a construction company is renovating your bathroom. The estimate is $30k. They finish the job and present you with a bill for $456k. Sound reasonable? Of course not. Any customer would expect the contractor to notify them when the cost exceeded expectations.

    - your car is at the mechanic for a brake job, $200. He finds other problems. Should he repair them and just bill you, or should he notify you to get approval before running up your bill? Sound familiar? Of course there are laws that say he must call you. How about if he just did the brake job, then told you the price was $20,000 instead of $200, because you had teflon pads, not asbestos, and he quoted you for asbestos. Didn't you see the contract fine print that said teflon costs $200/second installation fee?

    Sam I am: some things just aren't reasonable. We should not roll over and accept them. We should argue that they be brought within reason.

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