Smart SpendingSmart Spending

Verizon cancels huge phone bill

No apology, and a credit blot from collection remains. Will our cell phone companies ever change and let us trust them?

By Teresa Mears May 19, 2010 1:21PM

The St. Germain family of Dover, Mass., got some good news this week: Verizon will no longer try to collect the $18,000 phone bill the family has been fighting since 2006.

 

The wireless company stopped short of forgiving the bill. The collection effort will remain a black mark on Bob St. Germain's credit report.

 

But the family is off the hook for the $18,000 in data-download charges Brian St. Germain, then a college student, ran up when he tethered his laptop to his cell phone after a two-year promotional period offering free data had ended, The Boston Globe reported. When Bob St. Germain called to complain, the company offered to reduce the bill to $9,000, and sent that amount to collections when he refused to pay.

 

"Nice to see Verizon dismiss all the charges," Bob St. Germain told The Globe. "But it's still on my credit report. Someone has to take the next step."

 

We're not sure Verizon will do that. Nor, at this point, is the company likely to apologize to the family for not offering what it and other wireless companies often suggest when a customer exceeds his minutes -- a retroactive change to a plan that includes those services, say a $29.99-a-month unlimited data plan.

That's right. Verizon charged the St. Germains $18,000 for six weeks of data downloads in 2006, a service that today would cost $59.98 for two months of unlimited data. We don't know what the charge was for data plans four years ago, but we're assuming it was not in the four figures.

 

Verizon's written statement to The Globe didn't include any admission of error.

Despite making a substantial adjustment to the customer's bill in 2006, we concluded last week the remaining balance was uncollectible, wrote it off and consider the matter closed. Bills of this nature are exceptionally rare given our policy of clear disclosure of price plan details at the point of sale and through confirmation letters, the customer's ability to change price plans at any time without fees or extensions, and the many customer tools available for monitoring and managing voice and data usage via the Internet, from handsets, and by text or email notification.

The statement said that in March 2010, 97% of customers did not exceed their voice minutes. The company also said its parental controls allow customers to set voice and text limits for individual users, with alerts when they near their limits. The company says it also alerts customers via e-mail and text message when they reach 50%, 75%, 90% and 100% of their data limits.

Verizon's forgiveness of the bill may have been partly motivated by a Federal Communications Commission initiative, launched last week, to collect public comments on "bill shock" -- large, unexpected wireless bills such as the one the St. Germains received. The FCC is considering whether to mandate a system like one used in Europe, where carriers are required by law to send text messages to consumers when they incur roaming charges or get close to a set data roaming limit.

 

Susana Schwartz at Connected Planet, which is aimed at telecommunications marketing professionals, talks about the pull between reputation and maximizing revenue when it comes to "bill shock" and related issues. She quotes Graham Cobb, director of product marketing for Telcordia:

We see two schools of thought in marketing departments: the more traditional one of not wanting people to have real visibility into what they are paying for because if they knew what it was costing them, maybe they'd stop spending, to one where marketing departments realize customers who grow wary of what they're being charged are more likely to churn, especially if they have been burned once for something they thought was innovative or "cool."

But Cobb believes that, if companies give people the tools, customers will spend a fair amount of money -- as long as they trust the company.

 

Judging by the results of MSN Money's annual customer service satisfaction survey and all the comments from our readers on our original post about the St. Germains' bill, customers don't trust their wireless companies. Verizon actually ranked slightly higher than other cell phone companies, with only 20% of those surveyed ranking its customer service poor, compared with T-Mobile (23%),  AT&T (23.2%) and Sprint Nextel (32.7%).

 

Customers don't trust their other communications providers, either. Cable and satellite companies ranked in the bottom 10 of the 150 large companies surveyed, below most of the wireless carriers.

 

What would your wireless company have to do to earn your trust? How about your cable company or your Internet company? Why do you think those industries draw so many customer complaints? How would you like to see those companies change the way they treat customers?

 

More from MSN Money:

10Comments
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

ABOUT SMART SPENDING

Smart Spending brings you the best money-saving tips from MSN Money and the rest of the Web. Join the conversation on Facebook and follow us on Twitter.

VIDEO ON MSN MONEY

TOOLS

More