New Charge On US Cell Phone Bills This Month, Or Is It Just Me?

[Ed Hansberry]

<p>Has anyone checked their cell phone bill this month? We have four phones on our plan, one for each of us because we don't have a land line in the house. There was a $3.44 "other" charge on the phone bill. I always notice these things in the "other" column because that is usually where international surcharges are that I often get reimbursed from my employer on, or it is where someone in the family has used information instead of Google. It turns out it was $0.86 per phone for "<em>Fee we collect and retain to help cover our costs related to funding and complying with government mandates, programs and obligations."</em> Uhm... yeah. I wish I could charge my customers a fee for complying with the government for things like tax returns, property tax filings, business licenses, etc.<br /><br />It amazes me what phone companies, both cellular and land lines, and cable companies get away with. <img src="http://www.ehansberry.com/ppct/rolleyes.gif" border="0" /><br /></p>

[bystander]

I am so glad that you brought this up...

Federal Universal Service Charge $2.39
Kentucky Lifeline Support $0.16
State Gross Receipts Surcharge $1.04
Utility Surcharge for Schools $2.49
Regulatory Cost Recovery Charge $0.40

Total $6.48

I understand and support Lifeline Support but I am not at all sure of the meaning, reason, or agreement to any others.

I keep thinking of the Boston Tea Party except that this is a relationship between a business and a citizen with Public Utility Commission (Government) approval.


Anybody top these?

[Brad Adrian]

"Fee we collect and retain to help cover our costs related to funding and complying with government mandates, programs and obligations."

Interpretation: "Fee for doing all the things we should be doing anyway..."

[nosmohtac]

I didn't take the time to look up one of my old landline bills, but these types of charges is what made my decision to ditch the land line easy.

Many of the phone companies in my region advertise a monthly fee of 24.99 for a land line. Sounds like a reasonable deal, but when you get the bill and add up all the extras your bill ends up being around 40.00/mo.
That's 15.00/mo in taxes and surcharges!!!

If you go to the stores, you can easily figure out what the tax on your purchases are (if you're shopping in your home area), but when it comes to cable and telephone providers, it's not so easy.

I've even tried to get the providers to tell me what my monthly bill is going to be with all the taxes and surcharges and they refuse to tell you. The best answer I've been able to get from them is that is depends on where you live. I've even asked them to look at any account in my surrounding area to give me an idea of what to expect and they won't do it.

I am not proponent of "big government", but consumer protection is one government task I do believe in! There needs to be legislation that forces these companies to include all charges when advertising their monthly prices for plans.

Sorry for the rant, but this is one thing that can raise my blood pressure.:mad:

[je44]

yeah its nuts, in the beginning of the year I tried to keep track in MS money just how much of my money went to taxes/sales and charges and fees like license plates phone surcharges. I gave up but hell can I claim the government as a dependant on my taxes ….

[ignar]

One of the best "feature" of prepaid phone is there is no tax and other fee section on the statement. I know I'm still paying, but at least I don't need to see them and get pissed off each month. I also got tired of paying $20.20 for my $14.99 Vonage service and switched to Skype. When other fees become more than a third of price, there gotta be something wrong.

[martin_ayton]

You will be paying these charges anyway, this is just the companies' way of trying to say that it isn't their fault (yeah, right!). I don't know which I prefer: Paying a lump sum which has all these included and staying in blissful ignorance, or seeing them separated out.

Personally, when I visit the US and Canada I can never get used to the price on the ticket not being what I pay when I get to the till because your retailers don't include sales tax on the ticket. Over here (UK and Europe) tax is included on the ticket price, but usually (though not always) itemised on the receipt. I prefer our way because I know what I'm paying (and I've grown up with it), but I can see the argument from the other side too.

However, European budget airlines take this to ridiculous extremes: They can advertise a ticket for £0.01 which you actually end up paying £50 for when you've added in the taxes, fuel surcharges, airport handling fees etc. etc.. When the final price is 500 times the advertised one, it's a scam - pure and simple.

[Ed Hansberry]

You will be paying these charges anyway, this is just the companies' way of trying to say that it isn't their fault (yeah, right!). I don't know which I prefer: Paying a lump sum which has all these included and staying in blissful ignorance, or seeing them separated out.
Because by separating them out, they get to make lofty quotes like "Only $59.99 per month for 3,000 minutes" but when you get your bill, it is $69 - yes, some is taxes, but others are these "fees" that should really be part of the marketed service rate. The $3.44 fee on my bill is not a tax, it is a charge for their accounting department and regulatory compliance deparment to do their job, but the law allows them to put it on a different line, letting them keep the marketing slogans and claims that they have not changed their rates.

In fact, that is another point - I have a contract at $xx.xx per month. They cannot change it, but they can slip this crap in and say my basic rate is unchanged. Well, no DUH Mr. Tellephone Comnpany - you are sticking the rate increases in a line called "Other."

Borders on false advertising, but because it is legal, it is just misleading.

[JesterMania]

I am so glad that you brought this up...

Federal Universal Service Charge $2.39
Kentucky Lifeline Support $0.16
State Gross Receipts Surcharge $1.04
Utility Surcharge for Schools $2.49
Regulatory Cost Recovery Charge $0.40

Total $6.48

I understand and support Lifeline Support but I am not at all sure of the meaning, reason, or agreement to any others.

I keep thinking of the Boston Tea Party except that this is a relationship between a business and a citizen with Public Utility Commission (Government) approval.


Anybody top these?

In Canada, the wireless carriers call it SAF (System Access Fee). There are no breakdowns, just one $6.95 CAD SAF. It's simple - if you don't pay the Fee, you cannot Access the System. Easy logic. :rolleyes:

[jadesse]

That is why I switched to Vonage. Every 3 to 4 months my land line would become unusable because of too much noise on the line. Ameritech/SBC/AT&T would have to send someone out & I might be without a phone for a couple of days.

I have the cheap Vonage plan it it averages $22.00 a month compared to $50 or $60 dollars per month I was paying before. Living in the Chicago area 90% of our phone calls were considered long distance too. I finally had enough of being raped & getting crappy service.

[acharn]

That's why I like Skype. I pay about $60 per YEAR. That's about $5 per month when you average it out. That's a 75% savings over Vonage.

[Rocco Augusto]

Uhm... yeah. I wish I could charge my customers a fee for complying with the government for things like tax returns, property tax filings, business licenses, etc.

It amazes me what phone companies, both cellular and land lines, and cable companies get away with. http://www.ehansberry.com/ppct/rolleyes.gif




They only do things such as this because they can get away with it. Imagine how much extra money they're making every month by charging their millions and millions of customers an extras +$0.50.

This reminds me of the virus from the movie Hackers, but more frustrating :D

[Pony99CA]

I wish I could charge my customers a fee for complying with the government for things like tax returns, property tax filings, business licenses, etc.
You probably do; you just don't itemize it out (and you may not consciously do it).

Because by separating them out, they get to make lofty quotes like "Only $59.99 per month for 3,000 minutes" but when you get your bill, it is $69 - yes, some is taxes, but others are these "fees" that should really be part of the marketed service rate. The $3.44 fee on my bill is not a tax, it is a charge for their accounting department and regulatory compliance deparment to do their job, but the law allows them to put it on a different line, letting them keep the marketing slogans and claims that they have not changed their rates.
This isn't anything new, though. Sales tax is basically a fee that companies pass along to consumers. My understanding (from running a very small business back in the day) is that the governments expects the merchant to pay sales tax, but allows them to pass it along to the consumer.

Look at McDonald's, for example. They advertise a mini-meal for $3, but good luck taking $3 in and getting it (unless you live in a state with no sales tax). But McDonald's still advertises that meal for $3.

The problem with phone companies (and similar companies, like cable and Internet) is that there are so many fingers in the pie. My AT&T long distance is a flat rate of $2.00 per month (before calls), but the various fees and taxes add well over $1.00 to that. You can see the same thing with rental cars, hotels, airlines, etc.

I agree that it would be nice if companies gave you a bottom line price (assuming no usage charges), but unless that becomes law (or somebody is sued and loses), I wouldn't count on companies doing that.

Steve

[Pony99CA]

I am so glad that you brought this up...

Federal Universal Service Charge $2.39
Kentucky Lifeline Support $0.16
State Gross Receipts Surcharge $1.04
Utility Surcharge for Schools $2.49
Regulatory Cost Recovery Charge $0.40

Total $6.48

I understand and support Lifeline Support but I am not at all sure of the meaning, reason, or agreement to any others.
I don't live in Kentucky, but I think I understand them.


Federal Universal Service Charge $2.39 -- A standard federal government fee charged for providing universal service
Kentucky Lifeline Support $0.16 -- A Kentucky state fee to pay for basic telephone service for low-income people
State Gross Receipts Surcharge $1.04 -- A tax on gross receipts (why?)
Utility Surcharge for Schools $2.49 -- A government program to help pay for school phones (or maybe just education in general)
Regulatory Cost Recovery Charge $0.40 -- A fee to recover costs of various regulations (or for maintaining the regulatory body)

Yeah, nobody likes them, but at least yours sound fairly obvious. I don't remember the name of one on my cable bill, but I had to call and have it explained.

Steve

[Pony99CA]

Interpretation: "Fee for doing all the things we should be doing anyway..."
Not exactly. "Fee for doing all the things imposed on us by others." Do you really think these companies would be creating this garbage if they didn't have to? ;)

Steve

[Pony99CA]

I am not proponent of "big government", but consumer protection is one government task I do believe in!
If Big Government hadn't passed these various programs, most of these fees wouldn't be there in the first place. :)

Steve

[nosmohtac]

If Big Government hadn't passed these various programs, most of these fees wouldn't be there in the first place. :)

Steve

Good Point;)

[Ed Hansberry]

You probably do; you just don't itemize it out (and you may not consciously do it).
I absolutely do it and it is included in the price. I don't tell the customer it is $1 and then invoice them for $1.50 because I have included the cost to file tax returns and have the building maintained in a different line.

This isn't anything new, though. Sales tax is basically a fee that companies pass along to consumers. My understanding (from running a very small business back in the day) is that the governments expects the merchant to pay sales tax, but allows them to pass it along to the consumer.

Look at McDonald's, for example. They advertise a mini-meal for $3, but good luck taking $3 in and getting it (unless you live in a state with no sales tax). But McDonald's still advertises that meal for $3.
No, totally different. That $3 mean puts $3 into McDonald's registers. The .50 cents of tax is held by McDonalds and remitted to the state. This fee on my phone bill is retained by the phone company.

As to the state's intentions, they don't care if you pass it through as a line item. You can sell an item as $3+tax (which, by the way is how McDonalds advertises - taxes not included), or you can sell it for $3 including tax, which means McDonalds keeps about $2.70 and the state gets .30. But of McDonalds did that, they'd just advertise the $2.70 to make it look like they were cheaper than the compitetion and charge the .30 tax.

What McDonadls doesn't do is advertise it for $3, and then charge additional non-tax fees, like "restroom cleanup fee" or some other nonsense.

Taxes are separate and consumers know it. Other fees are not - they go into the pocket of the company and should be part of the overall price. I effectively got a price hike this month because my cellular carrer decided to put this "fee" in the "Other" column, but they still get to advertise the $59.99.

[Russ Smith]

...or a little more detailed.
If you ask almost any company how they arrive at the price they charge on their goods and/or services and keep drilling down, you'll eventually run into the fact that they're passing on to the consumer every single cost associated with compliance with government mandates. In fact, you could make a case that companies actually don't pay taxes at all. They simply collect the money from you and I and pass that on to the government.

At least the cell phone companies put it out there in black and white so you can see how much extra you're paying because some congress-folk decided that this was an easy way to raise taxes without appearing to have done so.

There are many reasons to cry foul at phone company charges, but this one I place solely on the shoulders of our governments.

[Pony99CA]

No, totally different. That $3 mean puts $3 into McDonald's registers. The .50 cents of tax is held by McDonalds and remitted to the state. This fee on my phone bill is retained by the phone company.
Perhaps, but, unless the company is pulling a fast one, it's not really a difference. With some of the fees, the company probably pays them up front to the appropriate authority, then prorates them across its user base. Other fees may be simply forwarded after the fact, which is exactly how taxes are handled.

Now I suppose you can argue that if the user base grows, they keep those excess fees until the next time payment is due. However, if the user base shrinks, then the company might be eating some of that.

However, it's probably not worth speculating about it. Does anybody know how the fees are calculated and if there's any auditing to ensure the company isn't using them as a profit center? If the companies were making money off of the fees, that would upset me.

As to the state's intentions, they don't care if you pass it through as a line item. You can sell an item as $3+tax (which, by the way is how McDonalds advertises - taxes not included)[....]
I doubt the state cares whether the company passes the fees through as a line item, either; as long as they get their pound of flesh, they're happy. And I bet the carriers also have a disclaimer in their ads saying "taxes and fees not included".

But the main point is the same -- the price you're paying isn't the same as what was advertised. Saying "everybody knows about taxes" isn't really relevant -- or even correct.

When my daughter first went shopping, she didn't know about sales taxes. Of course, she does now. Or when somebody from a state without sales taxes travels to another state, it wouldn't surprise me if being charged sales tax was a bit of a shock. After that first time, though, they probably aren't shocked again.

I bet most consumers who have subscribed to phone services, cable services, etc. also know about added fees after their first bill. :)

What McDonadls doesn't do is advertise it for $3, and then charge additional non-tax fees, like "restroom cleanup fee" or some other nonsense.
True, but conforming to health codes is built into the price.

Yes, itemizing would allow them to advertise the product more cheaply, but it would probably be roughly the same for every other company in that sector, so it's not like you're really losing out.

If Verizon advertises service for $39.99 and T-Mobile advertises service for $29.99, maybe you end up paying $45.66 for Verizon and $35.66 for T-Mobile, but as long as the relative savings are the same, that's the important thing, I think. If T-Mobile ended up being a lot closer to Verizon (or more than Verizon), then I'd be upset.

Taxes are separate and consumers know it. Other fees are not - they go into the pocket of the company and should be part of the overall price. I effectively got a price hike this month because my cellular carrer decided to put this "fee" in the "Other" column, but they still get to advertise the $59.99.
If the company was absorbing the fee before, I agree that amounts to a price increase and should be prevented by your contract. However, if the fee reflects new regulations, I think it's not unreasonable for them to bill for it like this.

Again, though, advertised prices not reflecting what you pay isn't new. Forgetting about sales tax for a minute, look at these examples:


Hotels -- transient occupancy taxes, phone surcharges, parking fees, newspaper fees, etc.
Airlines -- airport fees, excess baggage fees, etc.
Rental cars -- airport fees, fuel fees, etc.
Car dealers -- title, destination charges, dealer prep, dealer markup, etc.
Electronics stores in California -- Recycling fees for TV screens of certain sizes

I'm not saying I like the fees, of course; I'm just not sure whether I'd rather see them included in the price or spelled out. The only benefit of including them in the price is that the advertised price would be closer to the real price -- which is good, of course. But once you're already a customer, it makes no difference at all.

As this new fee has obviously upset you, I'd suggest complaining to your state's regulatory body. They can investigate whether it's justified or violates your contract. And, while I hate to recommend suing, if you think you have a case, there's always a class action lawsuit. I've gotten several settlement notices over the years about utilities, banks and credit card companies.

Steve

[Ed Hansberry]

Steve, all businesses pay fees. It is the cost of business. It is not the same as collecting sales tax, which is a pure passthrough. I pay a fee to the copier cleaning guy, a fee to the lawn maintenance crew, a fee to a dozen state and local authorities. Those are not passed through - I simply must make sure the profit margin covers that, as well as rents, salaries and cost of goods.

I don't advertise my product at $1 and then add fees to that. Virtutally no one else does either, except the phone, cable companies and probably some utiliy companies.

[martin_ayton]

Ed, I do take your point. It makes you want to send your check in for payment, along with a payment advice containing the following lines (or something like them):

$59.99 Monthly contract fee
-$ 5.00 Processing fee
-$ 0.75 Postage and envelope
-$ 25.00 My time for the hour I spent fruitlessly calling your customer service dept
-$ 4.49 Fuel surcharge
$24.75 TOTAL OWED (Please find cheque enclosed)

Hey, two can play at this game, no?

[ignar]

Ed, I do take your point. It makes you want to send your check in for payment, along with a payment advice containing the following lines (or something like them):

$59.99 Monthly contract fee
-$ 5.00 Processing fee
-$ 0.75 Postage and envelope
-$ 25.00 My time for the hour I spent fruitlessly calling your customer service dept
-$ 4.49 Fuel surcharge
$24.75 TOTAL OWED (Please find cheque enclosed)

Hey, two can play at this game, no?

Brilliant!

[Pony99CA]

Steve, all businesses pay fees. It is the cost of business. It is not the same as collecting sales tax, which is a pure passthrough. I pay a fee to the copier cleaning guy, a fee to the lawn maintenance crew, a fee to a dozen state and local authorities. Those are not passed through - I simply must make sure the profit margin covers that, as well as rents, salaries and cost of goods.
I understand there's a difference between fees and taxes, and I understand why you're upset. I don't like seeing my $2 long distance service balloon to over $3 after various taxes and fees, either. I just don't think there's that much difference between passing along a tax and passing along fees. Some are passed along directly, others are spread across the user base, but I don't think that's a huge distinction.

I don't advertise my product at $1 and then add fees to that. Virtutally no one else does either, except the phone, cable companies and probably some utiliy companies.
I cited several non-utility examples in my previous post. If I call a hotel, the room rate they quote me likely won't have transient occupancy tax or any fees included unless I specifically ask about them. Car dealers don't advertise the final price, but include fine print about the various taxes and fees that aren't included.

Oh, and I just thought of two other fees (at least in California). When I go to an oil change company, there's a hazardous waste/recycling fee added that's not in the advertised price. I think buying tires may have the same type of fee for the old tires, plus there are often charges for mounting, balancing, valve stems, etc. that aren't in the advertised price.

There's a joke I heard by some comedian. He was checking out of a hotel and the bill was bigger than he expected. He told the clerk the room rate was supposed to be $100 per night. The clerk said, "Yes, but there's a $15 per night charge added for gym access, continental breakfast and the daily newspaper." The comedian said, "But I didn't use those," to which the clerk said, "But you could have."

The comedian said, "Fine, but I have to deduct $300 for sleeping with my wife." The clerk was shocked, and said, "But, but, I never touched your wife!" The comedian said, "But you could have...."

Fees are added in many places. You don't get them often in retail stores (although see my previous comment about the LCD recycling fee in California). I'm not saying I like them, or that I necessarily agree with how they're shown; I'm just saying that it's not an uncommon practice.

Steve

[Pony99CA]

Ed, I do take your point. It makes you want to send your check in for payment, along with a payment advice containing the following lines (or something like them):

$59.99 Monthly contract fee
-$ 5.00 Processing fee
-$ 0.75 Postage and envelope
-$ 25.00 My time for the hour I spent fruitlessly calling your customer service dept
-$ 4.49 Fuel surcharge
$24.75 TOTAL OWED (Please find cheque enclosed)

Hey, two can play at this game, no?
Try it and see what happens. :D

Steve

[Constant Caffeine]

The one thing I like about Norway is that there is a law that indicates that a company MUST disclose the entire price one will pay for a month, per quarter or year. It is great because you know exactly what you will pay each month. This applies to our cable, cell phone, internet, etc bills. This also applies if I wanted to obtain an entertainment center from a electronics store like Best Buy using their credit system.

When I lived in the U.S., I called Sprint over a $1.97 "miscellaneous fee". The person I spoke to was unable to tell me what exactly it was for, but told me if I did not pay it, I would be disconnected from my service and my account would be turned over for collections. With only five months to go before I moved to Norway, I canceled my service and of course paid the $1.97 in addition to my regular bill. I think these hidden, unjustified fees will eventually bite companies in the rear. Soon, I am sure there will be a class action lawsuit because of it.