SMS Text Messaging & Youth Debt One

securitas writes "The New York Times' Lisa W. Foderaro reports on the impact of SMS text messaging and resulting debt on America's youth. The predictable but seldom-considered effect of the recently available technology combined with the social role instant messaging and SMS play are leading to bills that youth and parents alike can't afford. 'Many high school and college students accustomed to sending unlimited instant messages on their computers do not adapt easily to text messaging's pay-per-message format, and end up with unexpectedly high bills' ranging from $300 to $800 per month. One school principal says that 'many students were blindsided by costs associated with text-messaging and other features, like customized ring tones"

Comments

In the Philippines

[Pao|o]

In the Philippines we've (kinda) solved this problem by having prepaid SIM cards. They make up the bulk of accounts in my country seeming most of population can only pay on a staggered/installment basis. Maybe America's youth should do the same.

Re:In the Philippines

[retartedted]

well i dont know if SIM cards work the same in the Philippines as they do here in Afghanistan but every time you get a new SIM card your phone# changes. And for us Americans that is unacceptable. and just downright annoying.

So far in the past few months I have had 2 of those cheap SIM cards break on me, so i sent out the e-mails and made the phone calls informing people of my number change. i felt like an idiot child who broke his toy. 99% of americans would never go for this with their primary cell phone. Parents buying these for their kids MIGHT work. but i doubt it. high school kids are alittle more technologically advanced now.

the cell phone family plans from major carriers in place in america are much easier for parents to manage then to continually purchase SIM cards and phone cards. it may just boil down to parents scolding their kids and getting them to MANAGE time and money. GASP!

p.s. for those of you unfamiliar with a SIM card, you get a cheap little credit card looking deal and pop out a little section of it and insert it into your phone (underneath the battery). your phone number pops up, then you load minutes on it with another prepaid phone card.

Re:In the Philippines

[frisket]

"Bills"? What bills fer fuxsake? Everywhere else in the world, kids cellphones are on a "pay as you go" basis, where you buy prepaid credit in any corner store. It's impossible for anyone under 18 and not in full-time employment to get a monthly-bill phone, for blindingly obvious reasons.

Only complete and utter congential cretins like the US telcos would think of giving monthly billable credit to kids. Hardly surprising that the economy is falling to pieces along with the social structure :-)

Will the last person to leave the USA please turn out the lights?

Responsibility

[AlexTheBeast]

Wah, wah, wah.

You could say the same thing for cell phones in general.

I had to "work-off" my long distance phone bills in the BBS days...

You set the limits as a parent... and if the kid goes over it, he/she pays.

It's called growing up.

Re:Responsibility

[beagle]

Yup. I mean - oh, the horror of learning that things in life really aren't free!

This is a story?

PS - there was an article in the local paper recently about how "the fees add up fast." Indeed they do, and this is why I don't have many of these monthly-fee services.

Re:Responsibility

[Anonymous Coward]

Sure being responsible is one part, but I think the article is trying to bring attention to a particular corporate practice.

The fees that cell phone companies love to raise seem to be the ones most customers are not likely to even notice that it existed in the first place, or not expect to be much. Going broke over just text messaging reeks of extortion.

Shocking truth

[DaKritter]

Commercial services may cost money!

Shock horror.

Re:Shocking truth

[ahknight]

It's not even that, it's that they're using it wrong, too. For instance, with Sprint I can pay $10/mo. and get unlimited SMS messages. For $10. Screw this $800 crap, with just a little planning and a little forethought they wouldn't pay more than $60 a month for the whole package.

It's just another sign that people are stupid.

Re:Shocking truth

[thegenerousjew]

The above post is modded insightful. Will I be modded insightful or funny for pointing out it should be modded funny and not insightful?

Re:Shocking truth

[Anonymous Coward]

Well, or simply poor, uneducated, or in some cases, suffering from being a minority. Sometimes it's easy forget what a difference growing up a lily-white middle-class environment makes to even knowing what options are available, let alone having the knowledge or experience to be choosing them.

I have a number of younger lady friends (for me anyone under 30 yo ;-), yes, all over 18, tfa!) who consistently were hitting me up for geld for their phone bills (which kept going delinquint resulting in having service being shutoff, then having hellacious restore fees - which they would ask me for help with the next month). They happen to be Black aka African-American and on the poor end of the US economic scale. I finally sat down with a couple of them and went over the last couple of months of phone bills. My observations include:

1. They didn't shop around for carriers - they typically used the same phone store their friends used which was in their neighborhood. They generally didn't venture out of their neighorhoods anyway, but certainly not to chase phone deals. Most of the phone stores in the "hood" were way overpriced compared to stores in "white" neighborhoods.

2. They always took the cheapest *up front* plan with minimal minutes. It seemed cheaper based on the cash in their pockets at that moment. Free phones were also a selling point but sometimes didn't give them the lowest TCO.

3. They always took the no-contract, month-to-month plans despite having been with the same carrier for over a year or two anyway, thinking they didn't want to be "locked-in" or "tied down" even though they *were* already by default (by the monthly bills and as long-term customers). Sometimes this was basic with little or no credit they weren't allowed to take cheaper contracts! Only in America you *have to* have credit to get a phone at a reasonable price; not the case anywhere else in the world BTW.

4. They always went way over their monthly minutes and most of their bills ballooned from overage charges. Their monthly bills were often hundreds more than even I have. I'd have to go 3 months on both land and cell bills to hit what one girl's monthly was - and that's with me running a business on those phones.

5. Most could have saved hundreds of dollars simply by signing up for a time contract and paying an extra $10-20 per month for more minutes - if they could "qualify" the credit test or negotiate otherwise.

6. Many of them routinely overextended themselves in other regular expense despite being far from wealthy (maybe the cause, maybe the effect :-( ). They all live month-to-month on the ragged edge. Most have unacceptably (to most people) unstable and volatile income cashflows. Hey they're poor - that part of why they're poor.

7. Most have poor or non-existent credit histories which unfortunately gets used by *some* unethical carriers to summarily reject applications for contracted, lower cost plans. In several cases I called their carriers for them after they were rejected for plan changes and was able to jawbone them decent contracts which had less cash-flow volatility (and make them better customers since they can make their bills more reliably) but that should not have been necessary.

8. Most don't have a good understanding of budgeting and certainly no concept of cashflow let alone NPV. This partly comes from being from poor families and being raised in bad school districts. Most are technically below the federal poverty definition.

9. Oh yeah. None have computers or general internet access. More people are falling into these categories, esp. recently. They get victimized because they have no access to information to shop around.

Re:Shocking truth

[penguinoid]

Commercial services may cost money!

Wrong. Or did you mean to say, "Commercial services may be expensive." It may be splitting hairs, but sending SMS messages costs almost nothing but is grossly overpriced. For no reason other than that it is usefull enough that people will pay anyways. Ahh, the free market at its best!

one simple solution

[kraut]

Pay as you go phones. Pay for the credit upfront, and when it's used up, you stop until you can buy more from your pocket money.

Re:one simple solution

[Seumas]

I'm 27 and I don't own a cell phone. I never have. I've only used one a few times. I'm a software engineer for a big corporation required to provide 24x7 responses. To that end, I wear a $10/mo company-paid two-way pager.

Carrying a cell-phone around strikes me as needless baggage and excessive availability. I prefer not to have to be reachable by every human being on earth every moment of every day. I'd like to consider my time sipping a coffee and reading the paper in the local cafe on a Saturday morning as _my_ time. Nobody should ever need to reach me so urgently that I need to carry a device that would permit disruption of that.

I understand why UPS drivers need a cell. I understand why cab-drivers need to. I can even understand why a CEO or an IT manager might. But beyond that, it's just a frivolous toy. Children managed to keep in touch with their parents and let them know where they were and what htey were doing for decades prior to this without posessing cell phones.

If I had a child, I can't imagine them providing any viable excuse as to why I should purchase a cell phone for them and pay the bill. And as their parent, I would not let them get one and pay for it themselves for the simple fact that I want to avoid them putting themselves into debt before even seeking out college loans a few years down the road.

Why six year olds and fifteen year olds are carrying them around like a house-key is beyond me.

Re:one simple solution

[zakezuke]

If I had a child, I can't imagine them providing any viable excuse as to why I should purchase a cell phone for them and pay the bill

1. Payphones are not everywhere anymore. Even when I was in school there was only one payphone on campus for grades 7-12. Now there is none.
2. Collect calls cost an arm and a leg. After getting a few "come pick me up" calls I was in awe.
3. Calling cards don't always work in payphones.
4. You can often get a family plan with unlimited airtime between family phones.
5. Safety

I'm not saying that getting a cellphone for a kid is the right choice. But there are good reasons why one may consider it. I went with a pre-paid phone for my nieces. "Come pick me up" cost 25-55cents and there was no chance in hell there would be a charge above and beyond what was pre-paid.

News!

[Erwos]

People make stupid financial decisions! Story at 11!

There's really no excuse for this kind of thing except sheer stupidity. I know that Sprint allows unlimited incoming/outgoing SMS messages for $10 a month. This is really no different than a kid running up their parent's credit card a buck a shot to $400, when you get down to it.

As for me, I can't really even imagine sending and receiving 300 SMS messages a month, let alone the 3000 that these kids seem to handle with ease. Maybe I could do it with a Sidekick, but damn, not with a regular cell phone.

Stupid semi-OT question: does anyone have any experience with buying a T608 on eBay and getting Sprint to set it up to work with the network? Any experiences on how good a phone it is in general?

-Erwos

In A Related Story...

[da3dAlus]

Makes me think of this one: "Economic Woes and Dismal Math/Science Scores: Related Deficits?"
To be blunt, it really makes me think that most of America's youth is too stupid to know that X messages @ $0.yy ea = $lots'ocash.

Pay to recieve SMS?

[MPHellwig]

So , if understand this correctly,in the US you have to pay for sms you send and recieve,even without knowing that you wanted to recieve that message?
Do you guys also have to pay for recieving post (with a stamp)?

Would you like some cheese . . .

[Kaimelar]

. . . with all that whine? Seriously, I can only have so much sympathy for anyone who signs a contract with the costs spelled out clearly and then is unprepared when they are expected to pay those costs.

And I believe today's User Friendly comic is apropos: http://ars.userfriendly.org/cartoons/?id=20050109

People are stupid

[BenjyD]

Isn't this just more evidence that most people are a bit daft when it comes to money? If they're not actually paying for it there and then with cash, most people find it hard to think of it as real money.

It's just like those idiots who get the cheap introductory offers from companies like 3 and think "ooh, I'm getting a good deal" , but don't look up how much the normal monthly tariff is. It often doubles from £15 to £30 after three months or something, with a one year minimum.

Why this *IS* a Problem

[Major Lame Brain]

This mobile phone stuff is the same kind of problem as folks who get in too deep with credit cards. It's easy to think "it's their problem and they're idiots for not recognizing that products and services co$t!" Unfortunately, the end result is often higher costs for everyone. When individuals default on loans, rates for the rest go up. The US government seems to ascribe to the culture of living beyond its means too. Usery is alive and well and sometimes awefully hard to discern.

Re:Only in North America

[ion]

Receiving phone calls and sms is free of charge in Denmark. Sending sms and calling people costs money, but one can control that by not calling or sending messages. It is a problem if others can run up your phone bill just by calling/sms'ing you.

Re:How much do you pay for SMS

[MaynardJanKeymeulen]

What I found the strangest thing in the article,
is that one has to pay for recieving messages.
Here in Belgium, you only have to pay for sending, mostly about 0.13 (about $0.10 or less)
It's not like you have to pay to recieve a phonecall or something, or am I mistaking?

Re:How much do you pay for SMS

[wing03]

Pay to receive?

So cell phone SPAM also incurrs a charge?

Yeesh!

We pay corporations to wear the clothes they make in sweat shops so we can display their logos.

We get increases in ticket prices to go see movies which have become chock full of placed products that advertisers pay the studios to put in.

Now, we pay the cell phone companies every time an advertiser sends us an SMS ad?!?!

WTF?!?!

Next time someone sings the praises of the capitalist free world, I'll be sure to shovel all that back to them and remind them how great it is that big business can freely make us pay through our noses!

Re:SMS on cell phones- QUIT YOUR WHINING!!!

[neurocutie]

it is not OK for companies to set arbitrary and complicated pricing schemes and trap customers in it.

I don't think 10 cents a message can be considered "arbitrary and complicated".

At some point, the carrier should have done an automatic "courtesy upgrade".

Do you know of ANY common service that works this way ? If you bring 12 individual cans of Coke to the cashier at the supermarket, do you expect the cashier to say: "Gee each can costs 75 cents, but a twelve pack only costs $4. I'm going to automatically charge you as if you are buying the 12-pack." ?!?
You end up calling Europe 10 times this month because your uncle has fallen ill. The costs are astronomical. Do you expect your phone company to step in and say, "Well if you had only adopted our Int'l rate plan for $5/mo, you would have cut your bill by 90%. In fact, we are going to ASSUME that is what you would have wanted to do, so we are AUTOMATICALLY signing you up for this OPTION and knock your bill down AS IF YOU ALREADY had this option." ?!?

The fact is that even if a company is trying to save a customer money (questionable why it should) IT CANNOT ASSUME that you would have wanted to add a feature option like unlimited SMS for $10/mo as a continuing monthly cost, which often comes with CONTRACTUAL OBLIGATIONS. YOU must agree to taking on new services and contracts. I definitely don't want companies adding new options to my service plan without asking me, EVEN if it might save me money FOR THAT MONTH.

So then, your argument reduces to, "Well companies simply shouldn't charge that much for SMS. They should put a cap of $10-20." Well fine, go ahead and try to convince a company that that is in its best interest.

The whole issue is Darwinian anyways. People too stupid or undisciplined to regulate their spending NEED to be held responsible for their actions. There is nothing even remotely necessities-of-life about SMS anyways, it is a total LUXURY.