Huge Phone Bills And Unsuspecting Customers; When Will Mobile Operators Communicate Clearly?

from the and-they-wonder-why-they're-so-hated dept

Just last week Consumer Reports was noting that mobile phone operators remained among the most disliked companies out there. There are any number of theories as to why this is, but here's a simple one: mobile operators are absolutely terrible at communicating with their customers. They make their customers feel stupid. They hide details in the fine print and make plans as confusing as possible. They add unnecessary fees. It appears that there's an inability or unwillingness for these firms to communicate clearly and honestly with their customers. It's so common throughout the industry, you have to wonder if the firms actually believe that this unwillingness to be straightforward with customers is strategically sensible.

However, all it really does is cause more bad blood. Two recent stories highlight this. Up in Canada, Bell Mobility is getting some awful press coverage for sending an $85,000 phone bill to a guy who signed up for a $10/month "unlimited" mobile browser plan. Like many mobile operators who offer similar plans, this plan only covered browsing if it occurred on the phone itself. If you used the phone as a modem, hooked up to a computer, then a different data plan kicks in. However, it's quite easy to be confused, as from a customer's standpoint, it's hard to see how this is a different situation and the plan did say it was "unlimited." In cases like these, it makes sense for the operator to admit its error, ignore the bill and move on. Actually, it would make the most sense to change its policies or marketing materials to make this stuff clearer -- but that's unlikely to happen. So far, Bell Mobility has only offered to lower the bill to $3,243, rather than get rid of it completely. In a similar (but less extreme) situation, Chris Anderson had his iPhone shut off by AT&T after he accidentally rang up a $2,100 bill simply by traveling to China. As many others have noted (including in a NY Times article), if you take your iPhone overseas, it will keep trying to check email every few minutes. And, it will do so by getting on a foreign GSM network, which will have exorbitant roaming fees... all of which will happen without the user even realizing it. In Anderson's case, AT&T sent him a text message warning him of problems, but without providing many details or a convenient way to get those details.

The thing is, these sorts of stories have gone on for years, generating plenty of press attention each time. At some point, you would think that the mobile operators would recognize that they're not communicating the details of the plans very clearly to consumers and start to do something different. But that doesn't seem to be the way mobile operators work. Maybe they've just come to the conclusion that these news stories serve that educational purpose instead -- though, the fact that the same thing keeps happening again and again suggests that kind of education isn't working very well.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    Wes, Dec 14th, 2007 @ 6:58am

    oh the irony,

    A communications company unable to communicate with its customers.

    Nice Work guys

     

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  2.  
    identicon
    Anonymous Coward, Dec 14th, 2007 @ 7:15am

    Do you think they do this by accident? The bills and the terms are written this way on purpose to generate revenue. Of course they know what they are doing. That is just maximizing revenue. Why would they do anything different and leave money on the table.

     

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  3.  
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    jEFF, Dec 14th, 2007 @ 7:18am

    Communications

    ...can you hear me now?

     

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  4.  
    identicon
    Alfred E. Neuman, Dec 14th, 2007 @ 7:19am

    Instant Gratification

    It is apparent that they just do not care. They think that the market is in their favor and such callous business practice will not affect their bonus checks. It seems this conclusion is correct for the moment, but they have to ask themselves how long will it last?

     

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  5.  
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    Katie, Dec 14th, 2007 @ 7:24am

    Stupid.

    Profitable, for now, maybe. But it's only a matter of time before an honest company Google starts up a reliable carrier that won't light your money on fire.

    The practices of cell phone companies to date have been nothing short of despicable, and they simply must change.

    AT&T has gotten a lot better recently. I was explained all the terms up front regarding my plan. And since my phone is a Windows Mobile device, and I am a programmer, I can do whatever I want with it. Quite a perk, since so far AT&T hasn't even bothered to port their Communication Manager to it, so I can't tether it via standard means.

    (which actually might be another perk, since they (for no reason) charge more money for tethering)

     

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  6.  
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    chris (profile), Dec 14th, 2007 @ 7:29am

    you want honesty in marketing materials?

    honest marketing is like dark sunlight or cold fire. the whole point of marketing is to trick people into buying your stuff.

     

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  7.  
    identicon
    Media Researcher, Dec 14th, 2007 @ 7:44am

    When the Dust Storm Settles

    I think there will be lots of problems such as high bills and media industry mishaps and uncertainties as mobile television services become more prevelant in our society. In Australia, there is a big campaign by Telcos to introduce a more expanded mobile television system, which I have investigated, and there are some real hidden costs to FOXTEL's (Yes, Rupert Murdoch's) company that will be surprising to unsuspected customers. The media industries are all scammering to develop new content and consumers are huridly purchasing newer mobile systems to be able to view what is available.

    I know, I purchased a new phone, but that was purely because CDMA services are on the way out and I wanted something more usable, but really I don't use the other features, such as Internet and television mobile broadcasting, because, really I don't find mobile television to be of interest to me.

    But, just as any product of service becomes new to society, there will be plenty of dust storms and when the dust finally clears, you can expect to see cheaper rates, or un-hidden ones and a more informative and creative mobile phone service that provides a purpose to society and not just another entertainment venue.

    Buyer and User Beware!

     

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  8.  
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    Chronno S. Trigger, Dec 14th, 2007 @ 7:46am

    deceptive marketing

    I'd have to agree that this kind of deception is intentional. It only takes one idiot who actually pays the $85,000 bill to justify it (at least to the phone company). The fact that they dropped the price by over $75,000 as quickly as they did should at least suggests that they know it's wrong and just want to hid that fact.

     

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  9.  
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    James, Dec 14th, 2007 @ 7:57am

    Its simple really

    They do this because they can. Its the same reason we hate the cable company. Sure we hate them but there's generally not a good and reasonable alternative (although admittedly there's slightly more choice with wireless than with cable).

    Until there is a good, effective choice in the market expect to get more of the same.

     

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  10.  
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    Wesha, Dec 14th, 2007 @ 8:05am

    Never understood roaming fees. If I have phone from provider A and roam in the zone of provider B, I pay $10 which A passes to B. Then, customer of B roams in the zone of A and B pays A $10. Total balance... guess what... The moral of the story: just make it a flat rate and be done with it, whether this is your network's phone or not.

     

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  11.  
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    Anonymous Coward, Dec 14th, 2007 @ 8:07am

    Customers are stupid

    What do they care if they screw people or piss people off, they still get thousands of new customers everyday no matter how badly they treat their customers, people need to wake up. Does anyone really think any of these "horror" stories will deter new customers from signing up with these providers? I doubt it.

     

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  12.  
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    Steve R. (profile), Dec 14th, 2007 @ 8:11am

    The Network Neutrality/Regulation Spin

    We hear the companies moan, do not regulate us, trust us. As Anonymous Coward points out, the whole game is obfuscation not clarity. If companies lack the honesty and guts to be transparent in their operations then they deserve regulation.

     

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  13.  
    identicon
    A. Lloyd, Dec 14th, 2007 @ 8:14am

    Dumb

    They shouldn't even be selling a plan that can run up $85,000 in charges in one month. There's no way to justify that. The charges ought to be capped.

     

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  14.  
    identicon
    You never know, Dec 14th, 2007 @ 8:18am

    To coin a phrase, " The price of the Hook, cheep. the potential for profit, Priceless!"

     

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  15.  
    identicon
    Shel, Dec 14th, 2007 @ 8:19am

    Help & Confusion

    "I'm sorry that I was not able to provide you with the help you thought you should get, and that you believe we are being evasive in responsing to your problems. I will pass your concerns along to management who will look into these problems and most liklely make changes."

    "In the meantime, have I provided you with excellent service?"

    "I'm sorry you feel that way, and hope you will allow me the opportunity of provising excellent service in the future, and thank you for using Rip-Off Wireless."

     

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  16.  
    identicon
    Juan, Dec 14th, 2007 @ 8:20am

    Mistakes

    One of the reasons they dont try to be completely clear about everything is because most of their systems are freaked up, i worked for almost 2 years in an Operational Data Storage at a TelCo (That means, i was in charge of checking the information flow of everything inside the productive system) and i can give you lots of horror stories, but i will stick to two.

    A system with over 15 millon clients, moving more than 4 millon dollars daily, with billions of transactions every day and more than 30 interconnected servers DID NOT HAVE a unique ID, yes im not kidding, if you recharged your card, there was NO WAY to uniquely identify that operation anywhere, so the way of controling is using human brain, same date, same account, SHOULD BE same recharge (hint: not always)

    They provide you with a mixed pre/post contract, so you pay in advance for a certain limit and after that you have to use cards, the thing is that the cards are much more expensive by minute than the plan. PROBLEM? If you still had card credit when they gave you the money for the postpaid plan, the minute costed you the same as if using the card (thus robbing you about 40% of the money). SOLUTION? Manually identify these cases (up to 74hs later) and change the rates up.

    So there you have, why they dont even try to comunicate it to you.

    Regards!

     

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  17.  
    identicon
    Regulation, Dec 14th, 2007 @ 8:27am

    is Required

    I'm no advocate of government regulation since it typically makes things worse but in the case of mobile telco's I think it is needed. The biggest abuse is the deceptive marketing practices the mobile operators perpetrate.

    All of them advertise service plan rates that understate the true cost to the consumer. They create 'fees' (as pointed out by Techdirt and many others) that sound like government fees or taxes but are really just a mechanism they use to lower the advertised plan rate.

    The government could stop the most egregious of these abuses by requiring companies to PROMINENTLY display all standard plan costs, fees, and taxes in marketing materials. The government should also require the mobile telco's to make publicly available on a quarterly basis the average cost customers were charged for each rate plan. The telco's should be required to provide an explanation of material deviations from the advertised rate plan cost. Should the average cost run greater than the advertised cost for two quarters then the telco's should be required to adjust their advertised plan rates accordingly.

    Armed with that kind of publicly available data only the honest telco's could win and retain market share.

     

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  18.  
    identicon
    Shel, Dec 14th, 2007 @ 8:31am

    Re: Mistakes

    Based on your confusing explanation of the process, it sounds like you were part of the problem, and probably receives a huge bonus.

     

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  19.  
    identicon
    Shel, Dec 14th, 2007 @ 8:33am

    Re: is Required

    Yes... great suggestion... but that would give the carriers an excuse to charge a fee for providing this information!!!!!

     

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  20.  
    identicon
    rocky, Dec 14th, 2007 @ 8:46am

    bitch! stop picking on wireless carriers!

     

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  21.  
    identicon
    Alexander Graham Bell, Dec 14th, 2007 @ 8:50am

    Will Not Change

    It's a complex techinal setup that even few of the provider's employees understand, but it's that way in all telecommunication business. That's why the Telecom auditor business exists ... to review bills and save companies $$$.

    The providers won't change, they generate extra revenue from regular users who just get fed up and pay most of the extra small charges that show up. The large exorbitant $85K bills are there and published to scare off the little guy who thinks he's getting off lucky. Few of those monster bills are paid ... most are just using unused bandwidth anyway so there is no additional expense to the provider.

    It's a scuzzy business of mass confusion where the confusion generates revenue.

     

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  22.  
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    Poomer, Dec 14th, 2007 @ 10:06am

    Re: Stupid.

    honesty is decorational in a business world. Competition pressures demand whatever steps are necesary to stay afloat...

     

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  23.  
    identicon
    Ferin, Dec 14th, 2007 @ 10:09am

    Contraindicated

    Spelling things out clearly and simply goes against their interests. If customer have an easy way to compare plans they can easily jump to the guy providing the best deal. If they spell out clearly what they agree to provide, customers can start jumping on them when they fail to provide it. The whole industry is invested in obfuscating the details of their plans and deals as much as possible.

     

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  24.  
    icon
    Derek Kerton (profile), Dec 14th, 2007 @ 10:51am

    Comparison Shopping

    There's a reason carriers use these confusing pricing tactics that make it hard to understand the real price of mobile phone service:

    - it makes it very difficult for customers to compare T-Mobile's price vs. AT&T, VZW, etc.

    If every carrier said; "200 minutes, $20; 500 minutes $40". Or even simpler "10 cents a minute, $40 minimum", well then you would be able to compare one directly to the other and make a choice that didn't account for their "differentiation".

    Carriers don't want to compete on price. That's commoditization. They want to compete on "Fewest dropped calls", "Best Network", best marketing, coolest devices, best services, who has exclusive AC/DC ringtones. By competing on these bases, they do not need to lower prices. So when you walk into a store, they will tell you all about AC/DC ringtones and best network, but they will not give you clear data to price compare them to the other guys.

    A similar thing happens when you shop Costco. Have you ever noticed that brand name products at Costco have different model numbers than similar items sold elsewhere? That's because the manufacturers don't want you to compare the low costco priced item directly with the other model, so they add/remove a feature and rename the model. Now you can't price compare easily. The mfg. would rather you purchase the more expensive model at another retailer. It is deliberate disinformation and confusion. Not illegal at all, though, and a decent marketing strategy. The more informed a consumer is, the less is paid.

    Now, on to bashing the consumers: you LCD knumbskulls consistently purchase all your products and services based almost exclusively on price. When a vendor tries to offer a better service at a premium, as American Airlines did with 5" more seat space in 2002, people will choose not to pay the premium. This is why meals, blankets, and peanuts are getting phased out on airlines.

    Not only do cellular customers shop only on price, but they tend to shop mainly on the price of one thing: per minute of domestic voice calls. Therefore, the carriers compete on this one decision metric with low price buckets of domestic "anytime" minutes.

    But since few people ever shop on the basis of a kb of data or minute of use while abroad, there is no competition for those.

    Since people tend to shop only on domestic prices, there is no incentive for companies to offer better services. But there is an incentive to obfuscate the price so that we will focus a little more on "features". End result, we get what we want: crappy service at a confusing low price.

    (BTW, the price IS low, we pay between 1/3 and 1/2 of what the rest of the world pays per minute of talking on the mobile phone.)

     

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  25.  
    identicon
    Mental Telepathy, Dec 14th, 2007 @ 11:46am

    I'm communicating

    Can you hear me now?

    Wifi phones

     

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  26.  
    icon
    Ben (profile), Dec 14th, 2007 @ 11:58am

    Some people just pay the less exorbinant ridiculou

    Some people just pay the bill, if it's not too ridiculous and blame themselves. It's been going on for years and won't stop until the idiots learn. Since idiots DON'T learn, it will go on forever continually enriching the CEOs and making life less pleasant for all of us.

     

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  27.  
    identicon
    Freedom, Dec 14th, 2007 @ 12:11pm

    Common Sense...

    What happened to common sense. If my spending habits change on my credit card, I get a call.

    If my billable amount/rate goes up more than 3 or 4 fold on my cell phone, I should get a call from a customer service rep. If it goes up beyond 10 fold, the offending part of the service should be disabled until contact is made with the customer. After all, in the end, all you do is pi*s off the customer and the provider still isn't going to be paid.

    The provider should look at it as an opporuntity to show the customer they care and are looking out for them instead of showing they don't give a damn a sending out 4 and 5 figure bills.

     

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  28.  
    identicon
    Thanks Good WI-FI Exist, Dec 14th, 2007 @ 12:21pm

    WI-FI is the solution

    Buy unlocked WI-FI phones or anything that can load SKYPE and connect thruogh Wi-FI. There are some of them with SKYPE already loaded, like the SONY MYLO (even though I hate SONY for been too pricey, but it's a special for $199 Circuit City). There are hotspots everywhere, talk at home with WI-FI network, and wherever, whenever and the longest you can for FREEEEEE. TIP: Pay SKYPE $30 a year and you can call any home or cellular phone in U.S.A and canada. I do that and I have the lowest cellular plan. It is simple to avoid paying too much to the EVIL PHONE CARRIERS.

     

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  29.  
    identicon
    alex, Dec 14th, 2007 @ 1:17pm

    fees and taxes

    I still find it unbelievable that up to 25% of my bill each month goes to the varied taxes and fees each month the state and fed and carrier charge. Not to mention the cost, period! When will we hit the home phone, $19.95 model?

    I had so much more money before mobile phones...........oy!

     

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  30.  
    identicon
    Anonymous Coward, Dec 14th, 2007 @ 1:23pm

    Pass a Law to make Carriers absorb the unexpected

    Probably the solution is to have a law to force the
    Carrier to eat that charge after a certain limit. (e.g. $200/month (unless explicitly approved).)
    What you want is to force the carrier to tell the customer that he has spent, say $100, in charges. Then ask him: "Do you want to approve another$100?"
    If the customer has to actively approve spending another $100, there will be no billing surprises.

    This approach would solve the problem for the customer - on accidental huge bills. It would also solve the problem for the Carrier; no more upset customers with huge bills.
    Why do the the carriers not do that now?
    The answer, and I am only guessing, is that they get to collect a lot more of money from these mistakes.

    The customer, rightly feels misled. The carriers could tell
    then if the carriers had to eat the cost.

    It is obvious that many people are confused by this
    that the system is designed this way BECAUSE it is profitable for the Carrier.

    The fix is to make the carrier pay the cost. Then they would think of a way to tell the customers.
    I suspect that merely having a suggestion of this law would
    cause the carriers to fix this problem.

    How about it AT&T? No more annoyed iPhone users. Apple would be happy also. After all if the iPhone is a good product, you should not have to use deception and ignorance to make money.
    How about it Canadian carriers? No more surprised customers with $58,000 bills.

    Comments please?

     

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  31.  
    identicon
    D, Dec 14th, 2007 @ 8:57pm

    Re:

    Exactly why I don't have nor ever will have a cell phone.

     

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  32.  
    identicon
    Jack at F&B, Dec 16th, 2007 @ 8:53am

    As Commenter #2 clearly says, the Mobile Operators clearly profit from the way it is and so have no reason to change.

    I don't understand why your mobile account is not like a credit card, that has a Maximum amt...once you exceed that amount in a month (or owe too much), you're cut off. Why is the Mobile industry exempt from common sense stuff like this?

    Oh, and shouldn't Apple pay the bills for excessive foreign roaming charges? It's not the users fault, it's Apple's.

     

    reply to this | link to this | view in thread ]

  33.  
    identicon
    OneBill, Nov 26th, 2011 @ 4:57am

    OneBill

    Mobile providers such as bell are far from perfect, but the fact remains that half of these issues caused are from the user not taking time to understand a contract. If you sign a three year contract be aware of what is included and use your device accordingly. Be smart when signing documents, the sad fact is the attitude from mobile providers is that ignorance is not an excuse, and that will not change anytime soon.

     

    reply to this | link to this | view in thread ]


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