FCC Plans To Stop Cell Phone Bill Mystery Fees

GovTechGuy writes "FCC chairman Julius Genachowski said Monday that his agency is going to make it harder for mobile carriers to hit customers with mystery fees on their monthly bills. The practice, known as 'cramming,' typically involves charging customers between $1.99 and $19.99 per month for services they either didn't use or didn't request. The FCC announced fines totaling nearly $12 million against four carriers for cramming last week."

Comments

Well done.

[ackthpt]

A co-worker has been vocal about this practice. Makes me all the more smug with my el-cheapo pay-as-you-go program.

Re:Well done.

[ep32g79]

The four companies that were smacked with this fine are:

Main Street Telephone for $4,200,000
VoiceNet Telephone, LLC for $3,000,000
Cheap2Dial Telephone, LLC for $3,000,000
Norristown Telephone, LLC for $1,500,000

Looks like either the majors are not engaging in this practice or too large of Goliaths for the FTC to consider throwing stones at.

Re:Well done.

[Em Adespoton]

Assuming I will not sign a contract... or purchase minutes that expire, ...what's a good cheap utilitarian service?

USPS?

I can't think of any telco, wireless or otherwise, who doesn't fail at least one of those three conditions. At least not in my country.

Re:Well done.

[kermidge]

I've been using Net10 since summer '06. Ten cents per minute, no roaming charge, no long-distance charge. So long as you keep your account active, minutes roll over forever. Phones are available from around $20 on up. I got my first one at Walgreen's. I suggest checking at net10.com for phones available in your Zip-code.

They now have two types of plans - for your usage, avoid the per month plans, get straight minutes. For $60 you get 900 minutes - a nice bonus. From time to time they have various web specials as well. Or you can buy minutes at prepaidonline.com or various drug and department stores and phone stores.

I've never had a dropped call and cannot remember having a bad connection (in south-east Wisconsin.) YMMV.

Re:Well done.

[AK Marc]

Nope. The majors do it. They just talk to the FCC and define the term, then get the lawyers to come as close to the FCC rules without breaking them as possible. Then they run them past the FCC again to make sure they don't break the rules, then implement them. They are doing the practice of cramming without breaking the rules against cramming.

Now, if only they required that the plans be advertised with the appropriate fees included. When they advertise a $29.99 plan, you should be able to give them $30 every month for that plan with change back.

Re:Well done.

[BitZtream]

local calling is unlimited.

But they also expire each month. You're ignoring the fact that you're buying a different type of service for a land line than you are for a wireless option.

There are providers, at least locally, that will be happy to provider you with unlimited * for your wireless device for $100 a month, no extra fees, send them $100, your phone works for any domestic call, data access or texting.

Of course, since you're paying for unlimited, you pay a lot more since its wireless and it has no competition. Your home service exists as it does today because everyone moved to cell phones, meaning land lines could no longer charge extra for shit that didn't cost them. They had to drop their prices to keep the infrastructure in use, and the result is that phone bills for land lines dropped an order of magnitude across the nation as the bills adjusted down to reflect the actual cost of the service provided (because they were no longer the sole supplier, thus the demand for that service dropped).

You'll get more places offering the options you seek when we get more cellular providers, not before then. As long as a few major carriers are the only ones with the money to build the infrastructure (lets ignore the fact that your tax dollars paid for that infrastructure due to government grants as well for the moment), you won't have competition, and the wireless industry will stay exactly like it is.

Fortunately, the wireless industry has one major problem. Like it or not, there is a lot of spectrum out there that can't be monopolized like the standard cellular bands are now, and as technology progresses and it becomes easier and easier for hardware to work on multiple frequency ranges at the same time, we'll see some inventive sole doing something like providing phone services in TV whitespace when possible, 4G when available, ect.

Eventually, technology will allow someone to break the monopoly, until then, you're going to have to look at second rate, fly by night, ghetto wireless providers who typically deal with people who have financial difficulties or credit problems. The up side to that is you'll find a lot of those services aren't priced horribly, and if you get REALLY lucky, you'll find one of those services that actually is good (some of them are, Cricket here actually does better than most of the local providers for coverage even though they are just piggy backing on the other towers (don't ask me how it manages for them to get better coverage, they seem to be able to bend the laws of physics here). The some how manage to keep connections in areas where other providers drop them. I'd jump ship to them in a heart beat, but I don't really need unlimited and I'm well out of contract already anyway, so I'd rather just keep whoring myself out to AT&T to keep visual voicemail until (hopefully) visual voicemail isn't limited to a couple providers.

Re:Well done.

[Anonymous Coward]

When I worked for ATT Wireless, a lot of "cramming" was a result of three things
a. Management demanding unreasonable PCR (Proactive Contract Renewal) or Giving Incentives for PCR
b. CSR's who were not trained, or cut corners in provisioning services
c. Default settings in the billing system.

Now I won't fault ATT Wireless for wanting to make money, but here's a few examples.
-The 1.75 Regulatory Programs Fee, is a tickbox in AXYS (the TDMA billing system) but not Siebel (the 3G billing system), it's automatically added every time you change the service plan.
-Changing the plan from a X-PLANNAME to PLANNAME was a one-way process, If the representative made a mistake (or the customer changed their mind, or hung up/dropped before confirming the details) then it was impossible to undo. So promotions and features that don't exist in the new plan, and only the older version of the plan can't be put back. The Mass Data Entry system would remove incompatible promos. (MDE was responsible for 90% of cramming and billing errors.)
- Management, Supervisors and Team Leads had more leeway to correct mistakes under ATT Wireless, but Cingular had a 50% one time rule. So you couldn't correct mistakes, no matter how legitimate they were.
- Management often embarrassed CSR's by making them call the customer and apologize for their mistake, this results in CSR's avoiding punishment by cutting corners by trying to escalate "hard" calls so they won't be held responsible for mistakes.
- "One call resolution" was a performance metric along with call handle time. Some representatives cheat this metric by sticking to a script which could only be described as "say no to everything and blame the customer."

Overall the experience of working for a mobile carrier is disheartening, because people often call in with legitimate issues, but the directive from management is "get them off the phone ASAP", so you're not allowed to solve the problem properly, only quickly.

The worst cramming comes from text messaging scams. You know the "send a message to (5 digit number) to win an ipod", those are all scams, and the wireless carrier is in on it. Each text message costs like 1.99 or something, and they cause subscriptions (repeated charges,) but they target children. The parent then calls in and demands to know what these charges are and claims they never did any. The solution was to disable the e-wallet on the account. However management failed representatives quality score if they proactively disabled the ewallet. Which BTW was a difficult thing to do, as disabling the ewallet involved one of 13 logins that were not used very often.

The current version of this is now flipped. To enter to win the ipods, you put your phone number into a web form on the website, which does exactly the same as above. In fact it makes it much easier to cram charges because the CSR's at the carrier can't figure out where they subscribed. As far as the phone carrier is concerned, you consented to the charge (that is why there are mile long TOS on those sites.) Since it comes out of the phone carriers pocket, you can't dispute the charges.

Personally I reversed the charges with impunity because I knew those sites were scams, but took it on the nose on Quality for doing so.

Effective, I'm sure.

[Sierran]

Let's see. $12 million in fines, total, eh? Verizon Wireless at the end of 2009 had around 90 million subscribers. Cram a $0.99 charge onto each, take into account the fines, and...yes, profit!

Re:Effective, I'm sure.

[cos(0)]

Prepaid.

Re:Effective, I'm sure.

[fast turtle]

nah. Hit the CEO's wallets for the fines. They can afford it and they'd sure as hell get a damn clue. Expand this across the board and companies would be a lot more carefull and if there is a 2nd violation, include the Board of Directors in the fines.

Re:Effective, I'm sure.

[StormReaver]

Let's see:

1) Go into a grocery store and steal a $2 candy bar: 30 days shock time in jail.

2) Steal 90 million dollars, and pay a 13% tax on the stolen money.

I know which kind of criminal I want to become.

Re:Effective, I'm sure.

[Bert64]

For the average guy on the street, the first fine hurts and then the escalations hurt more...

For corporations the fines don't escalate as much, and so long as the fines are lower than the profit made by doing the illegal act, then it's just good business to continue doing it and consider the fine a cost of doing business.

jail

[ThurstonMoore]

The fines will mean nothing if the carriers make more money than what the fines cost. They need to put some people in jail and this shit would stop.

Re:jail

[artor3]

Sure, but CEO's are use to living in a magical bubble where they are above everyone else. A single day in a concrete cube, and they're going to get very pissed, and will do everything in their power to get back to their yachts and vineyards.

Re:jail

[Tanktalus]

No. Capitalism only works properly when all parties have equal knowledge of the area they are exchanging value over. Such as exchanging $1/lb for these apples, I know what $1 is, I know how many pounds of apples I'm buying (if the scales are rigged, this is not-equal knowledge), and I know what apples are/taste like/contribute toward my health. Similarly, the vendor knows all of this as well. I am accepting the veracity of the apples, he is accepting the veracity of the cash as a representation of value, and both can use the government as an enforcer of the same (e.g., vs rigged scales, rotten apples, fake money).

This is not Teh Socialism. This is Teh Justice in pursuit of Teh True Capitalism. Buyer beware only applies if you should have known better, not when you were intentionally deceived. Teh Socialism would be if the government wasn't merely trying to stop deception in the marketplace but also regulating the cell carriers' rates.

Finally

[WiiVault]

This is one of the major issues that has caused most of my family and those I advise on cell phone purchases to go with pay as you go phones. As the one holdout who needs a smartphone with major (asshole) network support I've grown so sick of the unknown and seemingly random small fees attached to my monthly bills. The scam is not only the fees themselves, but the god-awful wait time by most providers when it comes to waiting on hold to reach the provider and question or dispute a charge. They know damn well that for $1.99 a month most people won't tolerate being on hold for 15+ minutes and thus use it as a quick way to yet again fuck us over. Yet another reason to hate the U.S. cell phone industry with a passion. If the FCC is serious about this all I can say is suck it telecos.

Re:Finally

[houstonbofh]

Agreed. Can I move to a 3rd world country with a real cell phone system please? (This is not a joke. Every 2nd and 3rd world country I have been to has a cell phone system worlds better than the US.)

Re:Finally

[spectro]

I got an smartphone with pay as you go service. Just bought an HTC myTouch from newegg for around $180 and put my AT&T gophone card on it. Works fine.

Now if you use lots of data you will get raped with their pay as you go rates. In my case I use all these free wifi spots all over and complement it by buying 10Mb for $5 every 30 days or so.

Its a start

[nurb432]

Now if they can stop bandwidth overage charges, ( or remove caps completely ) and force everyone to be compatible with each other like it was with wired phone, so you can keep your phone...

Re:Happens in Canada too, but authorities do littl

[MikeBabcock]

Those fees aren't the mystery fees being described here. Those fees are legal and described in advance.

If you don't get charged the 911 fee, you've got lucky somehow.

These are fees for services you didn't even want or sign up for.

As a slightly different example here, our corporate cell phone bills frequently have charges for calls to our my-5 numbers. We read through the bills every month and call to complain about those. Almost every month they try to bill us for calls that their own service claims are free, which they apologize for on the phone profusely of course.

I might add, I don't understand people who pay their bills without reading them.

Re:Happens in Canada too, but authorities do littl

[hidannik]

Because most businesses are not in the habit of defrauding their customers.

Hans

The problem is not "transparency".

[mrsam]

From TFA:

the proposed steps would increase transparency and make it easier for consumers to understand the meaning of charges on their monthly phone bills.

BS. Sheer nonsense. The problem is not that the bills are hard to "understand". The problem is the cramming in the first place. Remove the ability for any arbitrary fly-by-night op to place charges on anyone's bill, if they know their phone number, and the problem will mysteriously disappear.

Cramming takes advantage of social engineering. "Wanna a HOT NEW LADY GAGA ringtone!!!! Just type in your phone number on our web site. (tiny font: $9.99 per month charge applies)".

And that's how a "simple-minded" acquaintenance of mine ended up with $40 bucks worth of charges on her bill, some years ago.

Get rid of the ability for anyone to cram charges, without a written notice by YOU, to YOUR cellphone carrier, and there's no more cramming. Of course, the cell-phone carriers will fight tooth and nail. I'm sure they make a nice profit skimming off their share of all the crammed charges.

Re:The problem is not "transparency".

[tompaulco]

Well, that is a simple matter of making the cell phone companies adhere to the same rigorous rules as the credit card companies, whose exact service they are duplicating without the liability of being regulated. Once the cell companies are required to adhere to those rules, they will have to investigate questionable charges at great expense, and will stop partnering together with third party shysters who give them 1/3 of the booty.

Re:prepaid

[Moof123]

Carriers have obscured cell phone (the physical device) payments with cell phone services. How this came about still boggles my mind, almost like bundling a gas card with your car payment and not being able to find out how much the car even costs. The two should be separate, and the current high fee for cancellation should be deemed illegal. You either pay through the nose month-month, or you risk 2 years of hell dealing with a contract for awful service with a $350+ termination fee looming.

Virgin Mobile

[ArchieBunker]

They have droid phones and everything down to cheap flip phones without a camera. $25 a month gets you 300 talk minutes and "unlimited" text/data without a contract. The best part is no hidden fees tacked onto that $25, just sales tax. Virgin uses the Sprint network so coverage is decent.

Pocket Change

[jenningsthecat]

$12 million divided among 4 carriers? I bet they're all laughing. That's just a (very small) cost of doing business for these guys. Fines of $100 milllion per carrier would get their attention - much less than that and it's hardly even newsworthy, much less an effective deterrent.

Oooh - 12 million dollars!

[ZipK]

The FCC announced fines totaling nearly $12 million against four carriers for cramming last week.

No doubt the board of directors, afraid the stockholders would hear about these outsized fines, quickly went around the table to see how much they each had in their pockets.

How long have we asked for this?

[Culture20]

It's been more than a decade, and they're just now getting around to it. The FCC must be planning something really shifty if they're pulling their public relations Ace from their sleeve.

Wow!

[geminidomino]

A WHOLE 12 Million!?

Shee-it. That'll learn em. They'll have to scam a whole 60k more people for one month.

Criminal

[tantaliz3]

This is a criminal case. It's theft.