by Mike Masnick

Consumers Getting Pissed Off Over Hidden Calling Plan Fees

from the bad-news dept

I use MCI's "The Neighborhood" flat-rate plan for my home phone line. When I first called them to sign up, I told them I knew there would be extra fees, but I wanted them to detail out each and every fee, so I knew the total price I would be paying (this way I could judge if it was worth it compared to my current phone bill). The woman I spoke to obliged, and listed out each fee, until the bill ended up at $57.42 - slightly less than my usual bill. I signed up. The first bill came and it was slightly over $64. They included a random extra $5 charge (which I got them to remove) and then told me that the fees the original operator had told me about - and which I had based my decision on - could not have been explained to me. They said that the woman I spoke to had simply made them up, and that they couldn't guarantee what the fees would be each month. Since then, every month, the fees have crept up, so I'm now paying over $62/month for the service that is still listed at a flat-rate of $49 - and which was promised to me at $57.42. When SBC called me to offer a similar plan, I asked them to detail the extra fees, and I was told there were none whatsoever - which is simply not true. It appears that I'm not the only person getting fed up with these fees. The NY Times has found that many consumers are increasingly angry about being lied to in advertised rates and "fake" fees that aren't "fees" at all, but simply the cost of doing business for the company. As it stands, in my case, all MCI has done is created a very disloyal customer, who is constantly looking for a better deal. Unfortunately, right now, I haven't been able to find one - since all the other phone companies are pulling the same scam. VoIP plans like Vonage are increasingly looking appealing, but so far still have a few problems that I don't want to bother with (such as not working if the cable modem goes down - which it does constantly). The phone companies claim they need to do this to stay competitive, but I'd be willing to pay a fair price for a company that was honest and treated me right. Maybe I'm the only one.

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  • identicon
    LittleW0lf, 8 Sep 2003 @ 5:06pm

    Truth in advertising...

    Eric Rabe, a spokesman for Verizon, said that practice was standard and that if Verizon added the charge into its flat rate, it could not compete. "If we did it, and MCI didn't do it, we'd look more expensive," Mr. Rabe said.

    Seems to me what should happen is an FTC or SEC audit on the phone companies for Truth in Advertising, since everyone else has to live by those rules. Why did best buy and some other retailers lose for exactly the same advertising when they weren't including the rebate information in the price of items they were selling?

    Now-a-days, if a company is pricing a product to be $239, and you go into the store and find out that the price is really $289 with a $50 mail-in-rebate, the company could be shut down because they were incorrectly advertising their products. Thus, Best Buy et. al. have to specifically state the price, and then print the reductions in that price because of rebates, in order to keep from getting in trouble.

    How come the phone companies don't have to live by the same rules? Just because they have a quasi-monopoly doesn't mean that they should be protected, in many ways they should be much more rigerously enforced than the other vendors because they have a reason to deceive users.

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

  • identicon
    Greg, 8 Sep 2003 @ 10:54pm

    No Subject Given

    I picked which company I was going to sign up by testing wich one would tell me the truth about the real cost with the fees.

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

  • identicon
    mike, 9 Sep 2003 @ 7:26am

    phone bills

    I understand your frustration. I work for Qwest in small business sales. The fact is, we don't have all of the fees that show up on your bill. We do have a list of the services and also of most of the Federal charges. We do not have a list of all of the state and local charges.

    I don't know how it works in the other companies, but we've had people fired for not disclosing all of the costs we know of. Believe it or not, the majority of our people actually try to be honest. The system is of pricing is just obscene. Every state is different. In some states, every locale is different.

    If you're really interested, I'd be glad to give you a trasparent view from the front lines (seems like maybe the 'enemy' front lines?)

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

  • identicon
    aNonMooseCowherd, 9 Sep 2003 @ 7:55am

    prepaid calling cards

    I use a prepaid calling card now even when calling from home because it costs a fraction of what my long-distance carrier charges.

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

  • identicon
    Frederick Heald, 9 Sep 2003 @ 10:45am


    I understand the frustration here - I create the invoices for a small long distance phone company (reseller).
    The big thing that people seem to be missing here, is that most of these extra fees are TAXES. Federal, state, county, local - they've learned that one place they (the government) can slap on extra fees and people can't complain, is on phone bills. Customers blame the fees on the phone companies, not on the government! These taxes are also variable depending upon where you call, so we can't tell you for sure how much they are going to be. I'm not even able to use formulas for calculating these taxes - we have to send our data out to a tax calculation company, who then sends it to a regulatory compliance company, and so on.
    On our invoices, we detail exactly who's getting the money, and let me assure you, it isn't us. There are even plenty of taxes we pay that we aren't allowed to "pass on to the consumer".
    The one variable is the "Universal Service Fund" which should be about 8% - but companies are sometimes allowed to tack on extra fees there which are rationalized as "cost of collecting the tax". I disagree with adding these fees but my company does anyway.
    That said, prepaid phone services are normally a rip-off compared to discount per-minute services. If you use less than the max amount, they make a killer profit - if you consistently use more than the max amount they find a way to charge you or cancel you.

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

  • identicon
    VonageAdvocate, 9 Sep 2003 @ 12:35pm

    No Subject Given


    Go with Vonage. You won't regret it. I've been using Vonage for almost a year now and even with my cable modem outages, it's been worth it. I pay $27 a month and have never used all my minutes. If the cable modem goes out, Vonage automatically forwards to my cell phone. They now have 911 dialing also (however no enhanced 911).

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

  • identicon
    Anonymous Coward, 9 Sep 2003 @ 2:28pm

    No Subject Given

    What a stupid waste of time.
    Get BASIC service.
    Buy prepaid long distance cards.
    Problem solved.

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

  • identicon
    Mike Schneider, 29 Aug 2007 @ 1:58pm

    Google Vonage + "worst company" for an eyefull.

    You've been warned.

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

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