CHICAGO–(ENEWSPF)–Oct. 11, 2010—On the heels of Verizon Wireless’ admission that it had slapped customers with up to $90 million in erroneous charges, the Citizens Utility Board (CUB) on Monday issued a report showing that such unnecessary fees, coupled with outsized calling plans, have sparked an epidemic of bloated cell-phone bills that could be costing Illinois callers nearly $1 billion a year.Warning that it’s buyer beware for cell-phone users, CUB issued the new report, “Dodging The Wireless Industry’s Pitfalls,” to alert consumers to the five most dangerous pitfalls in the wireless market.
The report analyzes a year of results, August 2009 through July 2010, gathered by the The CUB Cellphone Saver, a free online service developed by CUB and Validas, a Houston, Texas-based technology company that specializes in analyzing wireless bills. The service allows consumers to upload an online copy of their wireless bills—AT&T, Verizon, Sprint, T-Mobile, and U.S. Cellular—and within seconds see a report showing them how to cut their costs. According to the report, most users of the tool are paying too much for service—by a whopping average of more than $359 a year.
“CUB’s report along with Verizon’s recent admission should be a warning to all Illinois cell-phone users: Most of you are overpaying,” CUB Executive Director David Kolata said. “Getting good information is nearly impossible from the big cell-phone companies, but there are ways to save.”
The Cellphone Saver’s analysis revealed that Illinois callers:
*Overpaid on 66 percent of the 4,400 bills studied and were gouged by $359.64 a year, on average. Applying those numbers statewide means Illinois could be overpaying by an estimated total of $905,719,933 a year.
*Were left holding the bill for an average of more than six hours of wasted calling time each month. *Forked over nearly $8 per month, or nearly $100 per year, in “extras,” including potentially useless services such as insurance, directory assistance, and roadside assistance.
For the first time, the Cellphone Saver put single-plan bills—as opposed to “family” or “share” plans—under a magnifying glass, showing just how poorly fitted typical calling plans are to their owners. Out of 859 individual plans, consumers paid for 450 minutes or more in 93 percent of them. Yet, two-thirds of those callers never used more than 300 minutes a month—and 30 percent, used less than 100 minutes.
“If anything, the Verizon controversy should spur Illinois consumers to take a good, hard look at their cell-phone bills,” Kolata said. “It’s buyer beware in the wireless market, so it’s up to you to spot the pitfalls before you, and your wallet, plunge into them.”
CUB’s report identifies five top pitfalls:
Wasted Minutes: Cell-phone callers are paying for too many minutes they simply don’t use. The Cellphone Saver analyzes individual consumers’ actual usage and can identify better calling plans among the top five carriers.
Billing Errors: Consumers should scan their bills for any fees that have been erroneously added, as in the Verizon controversy, or intentionally added, through a growing scam called “cramming.” They should be on the lookout for strange fees and make sure they’re not being charged for supposedly “free” night and weekend minutes.
Insurance: Out of 11,921 lines that were analyzed, 19 percent had insurance at a cost of $5.49 per month, or $66 a year. Such protection is often so limited that unless a customer has a very expensive phone with all the bells and whistles, it’s not worth the price tag.
Directory Assistance: More than 1,000 Cellphone Saver users paid $3,898.91, or $3.88 per month, for directory assistance—even though there are free services readily available, including 1-800-GOOG-411, 1-800-Info-Fast, and 1-800-FREE-411.
Roadside Assistance: The Cellphone Saver found that hundreds of people were paying for Roadside Assistance charges, at a cost of about $3 per line. Many people may be surprised to learn that the wireless industry has peddled emergency assistance for car problems.
CUB’s report included a “call to action” for the cell-phone industry, recommending reforms such as more flexible minute offerings, “frequent flyer-like” rewards for unused minutes, and allowing consumers to add on to their minutes for a small fee in months when they’re in danger of paying “overage” charges of 25 cents per minute and up.
CUB is Illinois’ leading nonprofit utility watchdog organization. It was created by the Illinois legislature in 1983 to represent the interests of residential and small-business utility customers. Since then, CUB has saved consumers more than $10 billion by helping to block rate hikes and secure refunds. For more information, call CUB’s Consumer Hotline at 1-800-669-5556.