"Just keep in mind when your first bill arrives, it will include taxes, activation fees and proration."
There's no question that wireless bills are high. For some of us, they're one of the most expensive bills we have to pay each month. The bill for just one of my lines would make for a decent monthly payment on a new car. But sometimes, if we're not careful, we can be just a few text messages, calls or emails away from doubling our bill.
Overages are a carrier's best friend and a customer's worst nightmare. Unlike the monthly rate you pay for each month, if you exceed a certain limit, the per use rate is much higher. For example, my family plan on Verizon is the 1,400 minute plan, which costs $89.98 per month. That equals roughly 6¢ per minute. The overage fee, however, is 40¢ per minute. If I were to use just 200 minutes over 1,400, I would have to pay $80 more on my next bill. On a plan with four or five lines, going over 200 minutes would be relatively easy to do without knowing.
And with the inclusion of data plans, the likeliness of that happening is only greater. Unlike minutes and text messages, data is not easily defined or managed. You can easily keep track of minutes and messages, simply because one minute or one message will always be the same. Data, however, varies with each use. Streaming music can burn through data much faster than simply browsing the Web. Streaming Netflix can (and will) chew through data like candy. And those are only a couple of different uses for a mobile data connection.
Most wireless providers here in the States offer data plans by the gigabyte. AT&T offers 300MB, 3GB and 5GB (hotspot included) data plans for $20, $30 and $50 per month, respectively. Similarly, Verizon offers 2GB, 5GB and 10GB plans for $30, $50, $80 per month, respectively. Unlike T-Mobile who offers similar tiered data plans, Verizon and AT&T charge overage fees for data. If you go over the 2GB, 3GB, 5GB or 10GB plans, you are automatically charged $10 and an additional gigabyte is added to your plan. On AT&T, if you go over the 300MB plan, you are charged $20 and only given another 300MB.
Say you have a family plan with four data lines and everyone goes over their 2GB plans. Automatically, that's another $40. (This is where shared data could really shine.) But it doesn't stop there. There is nothing to stop anyone from going over their allowance more than once, twice or even more. And there is no good way to manage a family of data plans.
It's not difficult to see how quickly things can turn ugly. Thanks to overage fees, your monthly bill could quickly double and, in some cases, triple before you even know it.
In the table above, the existing alerts for nearing overages are represented. T-Mobile, for instance, sends alerts to customers who are nearing their data and voice limits, and for those who will face international fees when using their device abroad. Likewise, AT&T and Verizon alert customers who are nearing their data allowance, and Sprint and Verizon also alert abroad customers.
Coming from the FCC yesterday evening, an improved alert system will be deployed by October 2012, which will assist customers and alleviate bill shock. All of the carriers you see in the chart have agreed to the changes. As the FCC site explains:
"In agreeing to honor the code, the carriers have committed to provide two alerts to subscribers when they are about to incur overage charges: one when they approach, and another when they exceed plan allowances for voice, data and text.
All alerts must be provided without charge and automatically. Subscribers will not need to take any action to receive the alerts.
The carriers must provide their subscribers with at least two of the four types of alerts by Oct. 17, 2012, and all of the alerts by April 17, 2013."
Overages aren't the only form of bill shock, though. It can come as soon as the first bill, without any overages. When I worked as a wireless sales associate, I was told to always inform the customer that their first bill could be pretty steep. "Just keep in mind when your first bill arrives, it will include taxes, activation fees and proration. It will be much higher than your typical monthly bill."
Still, just over a month after signing up for new service through me, customers would come back in my store, angry, that their bill was higher than we had talked about, higher than what they agreed to pay each month. And people were constantly complaining about paying overage fees for data and minutes. At least a few times per week, I remember having to calm someone down over an outrageous bill. And others I would have to soothe after their last bill was $5 more than it had been for the six years.
Trust me, bill shock comes in all shapes and sizes. And people are never in a friendly mood when their wireless bill comes and it's much higher than what they expected.
I can't say that I've ever experienced shock from an abnormally high monthly bill. To date, I've always had unlimited data and text messaging. And I've never been one to place very many voice calls. Of the 500 minutes I pay for each month with T-Mobile, I bet I haven't used more than 100 minutes total in the 16 months I've been with them. That said, I've always been a very heavy data user and I recently switched to a tiered plan on AT&T. I'm counting the days before I lose control and use 20GB in a month. (That would equal about $200 plus tax.) It's bound to happen sooner or later.
It's a great thing that all the major carriers in the U.S. have agreed to adopt a better alert system for overages. It could definitely use some improving, but I imagine this "new" alert system won't be all well and good. And it certainly won't stop people from going over. But at least it will make them well aware that their next bill could be higher if they don't curb their usage.
Tell me, lads and lassies. Have any of you ever had bill shock? What was the culprit? Minutes? Messages? Or data?