Wireless Carriers Finally Cave On Overage Fees; Reluctantly Agree To Stop Treating Customers Like ATMs

from the it'd-be-a-great-racket-if-it-wasn't-for-these-stupid-customers dept

About a year ago, various wireless service providers found themselves under investigation by the FCC for sky-high overage fees. Of course, they protested this charge in the form of hilarious statements, expressing “concern” that their customers might be “confused” if they were warned about impending overage charges. Some even went so far as to claim that customers obviously wanted overage charges because (get this) customers racked up overage charges.To wit:

“For accounts that repeatedly go into overage, it is reasonable to infer that it is a matter of consumer choice. These customers are either indifferent to overages or are making the deliberate decision to incur overages because it is the most cost-efficient solution for their usage patterns.”

Or maybe, just maybe, customers wanted to be informed of these possible overage charges but no cell phone company was interested in telling them. While tools are available for consumers to track their own usage, this is not something that’s promoted very heavily (or indeed, at all) by most phone companies.

Well, the FCC has finally stared down the wireless carriers, who have decided to voluntarily (through gritted teeth) implement many of the rules suggested by the FCC, rather than deal with being regulated by the government.

Customers will receive free text alerts in real-time when they’re about to exceed their limits, CNET reports. The move is supposed to cut down on the “bill shock” people may feel when hit with sky-high rates for extra usage. Wireless carriers will also warn customers who travel overseas about the additional fees they may incur.

Of course, this being a government-related decision (and one performed under presumable duress), don’t expect to be notified any time soon.

Under the volunteer measures, wireless carriers have 18 months to put their warning systems in place.

Not only that, but your months-away warnings may not be timely enough, especially for those of you with notorious text-fiends (read: teenage children) on your mobile plans.

Some providers, including AT&T and Verizon Wireless, already warn their customers as their data use approaches the limit. However, these warnings may be delayed. AT&T, for example, takes 24 hours.

24 hours?!? That’s like 3 years of texting for normal users! The good news is that sometime within the next two years, your mobile carrier may have to speed up its notification system to something approaching “real time.”

Until then, you may want to consider switching to an unlimited plan or putting your kids up for adoption, whichever is cheaper.

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Companies: at&t, verizon wireless

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Comments on “Wireless Carriers Finally Cave On Overage Fees; Reluctantly Agree To Stop Treating Customers Like ATMs”

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Mike Raffety (profile) says:

Overage charges?

One thing I completely fail to understand. The per-minute or per-megabyte charges when you exceed your plan are usually FAR higher than the same rate within your plan. For almost anything I can think of, the cost per unit FALLS when you buy in larger quantities.

What is the economic driver behind this thinking, other than monopolistic practices that all the other post-pay carriers do the same thing? Why wouldn’t carriers welcome these heavy users with unit costs that match or are somewhat lower than the plan unit costs?

Certainly, carriers would shun heavy users when the plan is unlimited, with no unit costs! But if a carrier offered a plan with decreasing charges as you bought more, the sting of not having “unlimited” (which never really is) would surely be lessened, with much happier and more loyal customers.

And if you say that there’s only limited total radio bandwidth, then why do those same carriers offer you lower per-unit rates when you buy a bigger plan?

S (user link) says:

Re: Overage charges?

If you think economic drivers and such have anything to do with cell companies’ pricing structures, you need to look a little more carefully at the world around you.

Remember, if one includes the entire TCO of the US Space Shuttle program, the price of data to/from the space shuttle is STILL lower than the price of text messages, per kb.

Anonymous Coward says:

“Until then, you may want to consider switching to an unlimited plan or putting your kids up for adoption, whichever is cheaper.”

Of course, you could actually teach them a little responsibility, and perhaps take responsibility for them. I realize, however, that this is not the American way, because our failings are always someone else’s fault (preferable a large corporation).

S (user link) says:

Re: Re: Or rather.

“Hey kid, you want a phone? Cool. Best get a job so you can pay for it.”

“When I was your age, we had to walk uphill — wait, what was I complaining about? I’m too bitter and stupid to be sure.”

Unless there was something VERY wrong with your family, your mom didn’t charge you a monthly fee of $80/month (plus overage fees) when you were a teenager to spend all evening chatting with your girlfriend.

Texting now is exactly the same as doing that — only texting has an arbitrary, capricious, and utterly INSANE premium associated with it, due to the utterly monopolistic stranglehold a tiny number of companies have on the American cell phone market.

Since the US government hasn’t the guts to do something about the monopolies, they’re making the token gesture of making the phone companies warn people before raping them — but this has nothing to do with you having a small penis, a smaller brain, and masses of self loathing you feel the need to project onto every random article you read.

Anonymous Coward says:

Re: Re: Re: Or rather.

“Unless there was something VERY wrong with your family, your mom didn’t charge you a monthly fee of $80/month (plus overage fees) when you were a teenager to spend all evening chatting with your girlfriend.”

No my parents expected me to use either: AIM or email, the house phone (local calls) all for the low price of ZERO additional dollars to their existing monthly bills (parents had broadband internet (1-way cable) before I was in high school). When I got my cell phone (High School) I paid the “add-a-line” charge of $20/month AND any additional fees I caused… very reasonable. A cell phone is not an entitlement, its a privilege.

Anonymous Coward says:

Re: Re: Re:

This is only a warning system. Actual usage is general available online – plus anyone with half a brain can figure out about how many text messages they have sent in a day anyway.

So what you are suggesting is that because the corporations don’t send you a reminder every 5 messages, effectively the consumer has no way to know what they are doing?

S (user link) says:

Re: Re: Re: Re:

If you had a family (that is, if you could manage to have sex with anything other than your own hand without sneaking up on it), you might have had some exposure to the idea of “family plans” and in the larger picture, the idea of having to account for and interact with OTHER HUMAN BEINGS.

I’ll try to explain this in small words so you don’t get confused:

When OTHER PEOPLE (those fleshy things you sometimes see when going out to collect your wellfare cheque) and YOU are living together, sometimes there is a thing called BABIES which happen when YOU and OTHER PEOPLE like each other enough.

Before many years have past, those BABIES have become CHILDREN, which are kind of like OTHER PEOPLE, except for smaller, and no constitutional rights. After they’ve figured out how to move their limbs without falling over too much, they usually have a developmentally-driven need to interact with OTHER CHILDREN — this is called “socialisation” and is considered a healthy thing by most psychologists who aren’t on too many drugs themselves.

Now remember, this isn’t like that scary scary guy I read about in some whore’s memoirs who narrated HER actions as well as his: “now you do this, and I do that, and you do the other thing . . .” — these OTHER PEOPLE and CHILDREN are not figments of one’s imagination; they don’t just do and act exactly how you want them to.

If this isn’t too confusing for you, you’ve probably realised by now that all of this means that in a FAMILY (a collection of OTHER PEOPLE you are related to) you don’t know exactly what every single other person is doing at every single moment.

Since you and these OTHER PEOPLE probably all want/need cell phones, there are things called FAMILY PLANS which give multiple people access to a common pool of minutes/texts at a discount, compared to buying plans individually.

However, this is the problem, and I know this may be hard, but read slowly and get your social worker to help you if you get scared: when YOU and OTHER PEOPLE are using RESOURCES at the same time, and YOU don’t know exactly what those OTHER PEOPLE are doing at a given moment, you can’t account for what they’re doing!

What they’re doing might include making calls; it might include texting! You can’t count their minutes used, or their texts sent/received, without wasting MORE minutes and MORE texts, making them continually report to YOU what they are doing! Exactly like this:

So what you are suggesting is that because the corporations don’t send you a reminder every 5 messages, effectively the consumer has no way to know what they are doing?

Now do you understand? Or do I need to start over from the beginning?

Anonymous Coward says:

Re: Re: Re:2 Re:

S, first off, keep your personal insults to yourself. You may have experience with welfare checks, but I don’t.

Those “OTHER PEOPLE” you refer to are your responsiblity until they come of age. You cannot pawn off their well being or bahavior training to a corporation because you don’t feel the need or the justification to care about what your children are doing.

The rest your capital letter ranting makes me pine for the days of RD when he was off his meds. Are you two related?

S (user link) says:

Re: Re: Re:3 Re:

So you’re saying that a man owns his wife?

How old fashioned of you.

Remember, CHILDREN are not the only kind of OTHER PEOPLE which occur in a family dynamic.

Also, I neglected to mention this detail, but CHILDREN can only be influenced — not controlled. In other words, even in households with a relatively high degree of discipline, CHILDREN do not always do what they’re told.

Further more, none of your yammering addresses the issue of parents who continue to maintain a family plan for their CHILDREN (above the legal age) in college, etc.

But I guess maybe you’re the kind of creature which drops all association with its offspring the second it’s no longer legally obligated to feed them.

By the way, want to know why nobody’s jumped in to your defence? It’s because you’re a corporate apologist with the morals of a snake, and nobody cares if I rip you to pieces.

The Devil's Coachman (profile) says:

Re: Re: Re:4 Re:

Please don’t insult the douche bag. It is not capable of actually thinking, and it only makes them madder. Too bad it wasn’t the good old old days, where you could simply bitch-slap the shit out of them, and walk away satisfied that you had done all you could to rectify the situation, and it was now up to them to learn, or not.

Travis says:

Re: Re:

Even if you teach them responsibility, you still run into the problem that texts received count against you. My parents ran into this problem with my brother. All of his friends would text him even when he told them not to. After a month of that, they cut off his ability to send or receive texts completely. This effected him severely socially as texts are the primary method of non-face to face communication for teenagers these days.

iamtheky (profile) says:

Re: Re:

I concur with the AC.

I believe it is the only writing style Cush is capable of based of his current body of techdirt posts.

Many (if not all) of my comments on his early posts were to point this out, and that it was very much being force fed rather than just laying out the facts from with which to draw an opinion.

cjstg says:

Re: Re: Re:

i find it entertaining in addition to being informative. if you don’t like the hyperbole, then move on to the next article. mike usually keeps things a little more serious.

by the way, most humorous writing (of which this was obviously an example) involves some kind of exaggeration. it’s simply a writing style. you may want to also refer to the writings of mark twain, douglas adams, charles dickens for examples where it is actually good (sorry tim).

John Doe says:

What about when you leave the country?

I rode my motorcycle to Canada last month and got a flat tire a few hours across the border. I turned on my Droid and immediately got a text message that I may get fees for being out of the country. I did end up paying about $20 more on my next bill for the phone calls I made. I couldn’t get my data plan to work for some reason; which was probably a good thing.

The really sad thing here is, when you see articles about people running up a $200,000 bill for using their phone in Canada, half the commenters on the article think the customer is stupid and deserves it. WTH? How can any sane person think that a few MB or even GB is worth $200 much less $200,000?

Anonymous Coward says:

Re: What about when you leave the country?

You get the same effect any time you cross a border. It’s not news. Anyone who thinks just because there is roaming service offered that they should just go for it without consideration is a fool.

The $200,000 bill was one of the guys from Mythbusters, who used data extensively without consideration for what it would cost him out of country. He may be a very smart man in some ways, but that was an incredibly foolish assumption on his behalf.

I travel extensively, and always pick up a disposible sim-card with a local number (and more often now local data plans) at a reasonable cost. In most places, the costs are lower than the US carriers.

:Lobo Santo (profile) says:

Re: Re: What about when you leave the country?

If you’re familiar with the story–he first called and confirmed the ‘out of country’ rate for where he was traveling to. He then used a sane and typical amount of data while out of the country.

And then, the lying scumhole cellular company claimed he owed an outrageous fee.

(Troll harder.)

John Doe says:

Re: Re: Re: What about when you leave the country?

Actually, the story I was referring to was a lady who had a family plan with her 2 deaf brothers. The brothers went to visit someone in Canada and ran up a $200,000 bill. The fact that this is apparently a common occurrence tells you that it is extremely unreasonable to try to charge this kind of fee.

I don’t understand the mentality that people have that they can check their conscience at the door when they go to work. They somehow feel it isn’t them personally screwing someone, it is the company. The thing is, companies are intangible objects and all decisions are made by people.

TheStupidOne says:

Re: What about when you leave the country?

I live in San Diego, and a few times, when I’ve gotten close to the border, I was sent a friendly “Welcome to Mexico” text that was all the warning I would have gotten before being raped by international fees without ever leaving the country. A friend of mine lives away from the city and she always has to check her phone to make sure it isn’t claiming she is in Mexico before she uses it.

This. Is. Wrong.

ComputerAddict says:

Re: Re: What about when you leave the country?

We have a camp near the Canadian border and this has happened a few times, Called AT&T, and ‘somehow’ they took a deeper look at the calls in question (assuming they can see secondary cell towers that assisted the calls? or signal strength direction based on each transmitter) and took the international fees off the bill. Kinda creepy that they can do that rough location triangulation a month after the call, but nice that they also can fix your bill.

Travis says:

Re: What about when you leave the country?

You were lucky that they didn’t push an update. One of my co-workers went to the Bahamas recently for her wedding. While there she had the phone on for a short time (She knew about roaming charges) and it racked up a $150 bill. Even with data roaming disabled (she had asked me to check it since I’m a net admin), the phone downloaded a system update and she never received any warning.

Anonymous Coward says:

Re: What about when you leave the country?

“How can any sane person think that a few MB or even GB is worth $200 much less $200,000?”

Because you agreed to it in your contract, duh!

What do you mean you didn’t comb over all 20 pages of fine print? What sane person signs a contract they didn’t read and understand in its entirety?

/sarc (or is it?)

Ron Rezendes (profile) says:

Wishful thinking...

My take on this: phone companies that do have unlimited accounts (such as Sprint where I currently have my service) should NEVER be able to charge you more than the price of the unlimited plan for normal usage charges. International rates and things of that nature, obviously could be charged over and beyond the unlimited plan rate.

This kind of price structure would tell me that the company believes customer is the priority and not seeing how much money they can get the customer to part with on a monthly basis, which is how it appears now.

I know it all seems so simple – the great part, it REALLY is!

Anonymous Coward says:

A better solution

There should be an option on wireless accounts to not allow any overage – once I hit my 200 messages or 2GB or 750 minutes, any attempt to go farther would be met by a notification – “You’ve exceeded your plan limits; contact customer service.”

At that point, if I want to, I can log on to my account or call customer service to override the block for the remainder of the month.

E. Zachary Knight (profile) says:

Re: A better solution

This reminds me of banks and their inability to block transactions for insufficient funds. The banks’ justification was that people don’t like to be embarrassed by a card rejection. They would much rather get caught with multiple $35 overage fees.

It doesn’t matter how badly a money making scheme harms a customer. As long as the bank/phone company can spin it to be a service for the customer all is fine and dandy.

Personally I am fine with being denied. Sure I may get frustrated that my Little Debbie craving will not be satiated every once and a while, or that I may not be able to call home if I am going to be late towards the end of the month. I would much rather be denied than hit with obscene expenses.

New Mexico Mark says:

Re: A better solution

This is the primary reason I switched to StraightTalk. (This is faint praise as StraightTalk has its own problems with customer service, having to use their phones, etc.)

However, I pay a flat $30 for 1,000 minutes, 1,000 texts, and 50 MB of data per month. Period. If I exceed one of these limits, that part stops working. If I want unlimited for all three, it is $15 more, but I’m sure if I were in a location where service would incur ridiculous charges it just wouldn’t work there, either.

For all they’ve done to screw this up, WalMart correctly read popular desire for a flat fee for phones. Prior to changing over, our last bill from AT&T was eight pages long. Maybe AT&T thought that by explaining all their “death by a thousand cuts” charges, I’ll be happier with them?


Jeffrey Nonken (profile) says:

“We assume it was a deliberate decision on the customer’s part to accrue the overage charges because we went out of our way to hide the fact they were accruing until 3 years after the fact, at which point we sent a couple guys named Bruno and Luigi to collect on the charges and the 243% APR added interest. We think this is fair and obvious.”

Let’s not forget telling the customer that their out-of-country charges are 1/100th of what they really are because they don’t understand the difference between cents and dollars. (And again.)

So they’re used to either hiding information from the customer or lying to them, and getting away with it. This new-fangled idea of being transparent, honest, and responsible? It could bankrupt the phone companies!

I’m surprised they didn’t try to stall further by claiming that the technology isn’t up to automating the notification feature. Though there’s still time for that. Next they’ll be splitting hairs about what “sufficient notice” is.

Matthew Stinar (profile) says:

Forget fees, the advertized pricing shocks me!

Am I the only person who gets bill shock just watching the carrier’s commercials? Seriously, Maybe I’m just cheap, but I can’t justify $100 (plus unmentioned regulatory and because-we-can fees) a month for two phones in an age when the costs of hardware and wholesale connectivity are plummeting. I think parents should be able to give their kids phones (for safety, checking in, etc.) without worrying about forgoing saving for college, let alone worrying about overages. Maybe paying engineers to lock and cripple good phones and then stuff their limited onboard storage with crapware is expensive. I just feel that complaining about overage fees while allowing them to gouge us on the rest of the bill is short sighted.

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