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.



Reader Comments (rss)

(Flattened / Threaded)

  •  
    identicon
    Anonymous Coward, May 6th, 2010 @ 2:03pm

    Don't forget how carriers often confuse what .01 cents is worth.

     

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    Sam I Am, May 6th, 2010 @ 2:38pm

    Rain on the parade

    Yes Mike, but that "steady parade" even if in the hundreds of examples, amounts to .0000001% of the Verizon user base while the overwhelming majority actually takes a responsibility to their contracts. (duh) If this is so impossibly complicated, why do millions get it while your comparatively minescule "steady parade" does not?

    Just another "poor victim" who brought it all upon themselves through personal irresponsibility.

     

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      Sam I Am, May 6th, 2010 @ 2:40pm

      Re: Rain on the parade

      "miniscule"
      For whatever reason, the built-in spellcheck didn't catch that. :-)

       

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      Sam I am Not, May 6th, 2010 @ 3:35pm

      Re: Rain on the parade

      I imagine that you pride yourself in being a complete asshat.

       

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      Anonymous Coward, May 6th, 2010 @ 10:50pm

      Re: Rain on the parade

      the masnick loves to reach and loves to use very small amounts of things to prove that the other 99.99999% of things suck. 'we have already shown' is code word for 'we are puffing this up'.

       

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      Mike Masnick (profile), May 7th, 2010 @ 12:14am

      Re: Rain on the parade

      Yes Mike

      I didn't write the post. Your attention to detail is enviable -- especially for someone posting a comment that mocks people for not reading thoroughly.

      that "steady parade" even if in the hundreds of examples, amounts to .0000001% of the Verizon user base

      That is not the relevant group to look at and you know it. For most people, this issue never comes up, indeed, because their deals never expire (auto renew) or they don't do something different or out of the ordinary. Interpreting that to mean that the majority reads and understands the contracts is not even close to true.

      The fact that these stories do crop up quite frequently is pretty strong evidence that when something out of the ordinary occurs, the insanity of the bills is very much because the contracts have NOT been explained clearly in the slightest.

      But, of course, that's only part of the issue. The larger part of the issue is that no matter what the contract says, there is no reason that such actions should EVER cost $18,000. No one would use the service knowing that they were liable for that much for just some internet surfing, and you know it. Verizon knows it too. And there's a simple way of dealing with it: not letting people rack up those kinds of bills.

       

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      Derek Kerton (profile), May 7th, 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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    inc, May 6th, 2010 @ 2:48pm

    Why is it that if you have an unlimited data plan you get cut off when you go over some unknown limit but this case they stick the guy with $18000 in overage. They know they will never be able to collect so why not cut him off when he hits $50 with of data overage?

     

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    Anonymous Coward, May 6th, 2010 @ 2:59pm

    Let's give customers "a deal they can't refuse"

    Looks like the New Jersey Mob struck again.

    It used to be that a consumer would enter into an agreement with a company because it was mutually beneficial. It's difficult to see how this agreement is mutually beneficial.

    Next time verizon decides to pull a stunt like this, they should steal the customer's car instead of demanding $18k. If verizon would have done this, at least the car insurance company would have covered the loss.

     

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    RD, May 6th, 2010 @ 3:01pm

    Ah, yes

    Ah right, its SIA, here to swing in in defense of the Big Corp and Fuck the Little Guy.

    Hey, I am all for personal responsibility, but what about a business's responsibility to its customers? Oh right, they are rich and powerful, and the consumer is only there to consume and be taken advantage of, not considered for anything but being an open wallet to pillage.

     

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      Sam I Am, May 6th, 2010 @ 3:18pm

      Re: Ah, yes

      Oh boo effing hoo. Were it only a hundred who got it right and 10's of millions getting it wrong, we'd properly crucify Verizon together for inscrutable policies.

      But alas, it's not that way. The little guy fucked himself through his own fecklessness. I know..... the truth is hard to handle but I'll bet you can do it.

       

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        DocMenach (profile), May 6th, 2010 @ 3:46pm

        Re: Re: Ah, yes

        SIA, you really are a complete retard. Okay, so the guy didn't realize his contract was up and 1GB of data was downloaded. In what reality is 1GB worth $18,000? I'm sure the guy wouldn't have had any issue paying the overage fee if the fee was somewhere in the realm of reasonable.

        Also, what the heck is "fecklessness"?

         

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          Chargone (profile), May 6th, 2010 @ 5:01pm

          Re: Re: Re: Ah, yes

          an adjective.

          meaning, in this case, 'possessing the trait of being irresponsible, unthinking, feeble or ineffective', to paraphrase the NZ Oxford English dictionary.

           

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        BS meter, May 6th, 2010 @ 3:50pm

        Re: Re: Ah, yes

        Yeah, you are correct, people should be responsible for everything they do - no matter what. For example all those people who invested money with Bernie Madoff should have known that he was running a ponzi scheme. It is their own fault and they deserve to lose their life savings because they were stupid. This is of course sarcasm.

         

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          Sam I Am, May 6th, 2010 @ 4:26pm

          Re: Re: Re: Ah, yes

          Of course, and Verizon is actually running an opaque ponzi scheme with printed documentation that has nothing to do with reality.
          And the winner of the "Retard Analogy of the Day" goes to.....BS meter! (applause)

           

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    lux (profile), May 6th, 2010 @ 3:07pm

    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.

    I'm sure the folks on the Board would absolutely love to see new client functionality that allows customers to become aware of when they'd be giving the company _a lot_ of money. Mike, you know business folks, why even write an article like this? Of course they are going to screw over their customers, capitalism is about the bottom line, always has been, always will be. Is this really that surprising?

     

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      Mike Masnick (profile), May 7th, 2010 @ 12:19am

      Re:

      I'm sure the folks on the Board would absolutely love to see new client functionality that allows customers to become aware of when they'd be giving the company _a lot_ of money.

      Yes, that's what Karl wrote. Not sure why you're repeating it.

      Mike, you know business folks, why even write an article like this?

      I didn't write it. But even if I had, what does knowing business people have to do with writing a blog post?

      Of course they are going to screw over their customers, capitalism is about the bottom line, always has been, always will be. Is this really that surprising?

      You have a rather odd view of capitalism. Yes, capitalism is about the bottom line, but a move like this GOES AGAINST the bottom line. No one's going to pay the $18,000, and this move will anger plenty of Verizon customers. Capitalism is about the LONG TERM bottom line, and that means treating customers with respect so they'll want to keep paying you. Not royally screwing them over so they decide to go elsewhere instead.

       

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      Karl Bode (profile), May 7th, 2010 @ 5:18pm

      Re:

      "I'm sure the folks on the Board would absolutely love to see new client functionality that allows customers to become aware of when they'd be giving the company _a lot_ of money."

      Hmm. We're not talking about just giving "a lot of money."

      We're talking about a retiree being absolutely screwed, and being forced to pay $18,000 for a volume of service worth -- at best -- a few hundred bucks if that.

      "Of course they are going to screw over their customers, capitalism is about the bottom line, always has been, always will be. Is this really that surprising?"

      What does "surprise" have to do with pointing out what is just, and what is not? And we're talking about how the terms of service and pricing are not made clear, which is, at its base, a very practical marketing and billing problem -- NOT just "the American way" (TM). Whether this is surprising is irrelevant.

      And seriously, some of you need to read the byline of articles before assailing poor Mike.

       

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    CCRick, May 6th, 2010 @ 3:13pm

    "I don't want to pay for what I bought, so let's not."

    I also have a friend that sometimes misuses his phone and is surprised at the charges. He also refuses to pay for his behavior. Strangely, he pays his other bills so far as I know. Why not refuse to pay the power bill if the Christmas tree lights drive the price up?

    Seriously - how about having a customer-set limit on charges per month and then simply have the number shut down except for 911 calls. I'd vote for that.

     

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      jjmsan (profile), May 6th, 2010 @ 5:19pm

      Re: "I don't want to pay for what I bought, so let's not."

      If you are just talking about phone calls they already have that. You pay a set amount and when you use it up the phone will no longer accept or receive calls until you pay an additional amount.

       

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    patrick, May 6th, 2010 @ 3:46pm

    This bill is dumb, why would they make it.

     

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    Hephaestus (profile), May 6th, 2010 @ 4:04pm

    Here is my favorite verizon story

     

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    Anonymous Coward, May 6th, 2010 @ 4:26pm

    Re: Re: Ah, yes

    "The little guy fucked himself through his own fecklessness. I know..... the truth is hard to handle but I'll bet you can do it."


    If the bill was 3 or 4 times what the customer expected, I would agree. But by my math, this is a bill that is over 177x the reported average customer revenue reported in 2006, and a little over 356x higher than Verizon's ARPU reported in Feb 2010.

    Verizon's claim seem inflated, disconnected from reality, and shows that there may be a problem with obtaining a member of the board to fix what amounts to an accounting problem, even when properly escalated through a State-level regulatory channels.

     

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    Anonymous Coward, May 6th, 2010 @ 5:05pm

    blah blah big corp bad, screw the little guy over whine whine cry cry

    you agreed to a contract, not their fault you didn't read it, what happened to personal responsibility?? oh that's right you don't have to have any, just cry about big business screwing you, wake up, take responsibility for your own action and inaction

     

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    CA, May 6th, 2010 @ 5:10pm

    It's not a hard concept to understand, if the guy didn't read the fine print his bad.

    Try pulling the "I didn't know I was being charged by the byte/kilobyte/megbyte/bit after I went over my 1Gb cap" in Australia and you'll get laughed out of court.

     

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      Derek Kerton (profile), May 7th, 2010 @ 10:28am

      Re:

      In a separate dumb argument, why don't we write, in very small print on our payment checks, "by cashing this check, Verizon Wireless agrees that, under no circumstances will they ever issue me a bill that is 4x my average annualized bill amount. In such cases, they will notify me as I cross 3x normal usage, and allow me to decide whether to power off my phone, or simply continue calling but apply a lubricant to areas sensitive to chafing from repetitive motions."

      If we put that on our check, and they cashed one, then we could relax. I mean, they agreed, after all. Deal is a deal.

      What else could we put on our checks to trick them into making a "deal"?

       

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    Chronno S. Trigger (profile), May 7th, 2010 @ 5:53am

    1980s

    1G of data hasn't cost $18,000 for decades. Aren't there laws against charging several thousands of times the cost if the item?

     

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