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Thousands in phone bills shock family

Verizon says the rules were clear, but the FCC is looking into the 'unpleasant surprises' that customers sometimes face.

By Teresa Mears May 12, 2010 3:52PM

When the St. Germains of Massachusetts got their cell phone bill, they thought surely there had been a mistake. The bill that month for the family, normally about $100, was more than $12,000. When Bob St. Germain called Verizon Wireless to inquire, he was told that the next month's bill would be nearly $6,000.

 

Verizon explained that when the family had renewed its two-year contract, a free data download promotion had ended. Not realizing the service had changed, Bryan St. Germain, then a college student, downloaded 816,000 kilobytes of data the first month and 375,000 the second. Thus, their total bill for two months was nearly $18,000.

 

I downloaded 1.19 million kilobytes last month. It cost $29.99. That's Verizon's monthly charge for an unlimited data plan for my smart phone. Two months would be $59.98.

 

We don't know what a data plan cost in 2006, but if it was free for two years, it must not have cost the company $12,000 a month. Even if the St. Germains were 100% at fault, should making a mistake with your cell phone plan cost more than a new car?

 

"Even though it's correct, it's incomprehensible, even to me," Srinivasan Keshav, a professor of computer science at the University of Waterloo in Ontario, told The Boston Globe, which reported on the dispute between the St. Germains and Verizon.

 

Verizon argues that the charges were clearly spelled out in the family's contract. "We go to great lengths to educate our customers on their products and services so that they avoid any unintended bills," two Verizon spokesmen wrote in an e-mailed statement to the Globe.

After the story was published, Howard Waterman, the executive director of public relations for Verizon Wireless Northeast Area, wrote to The Globe: "This story paints an inaccurate picture about the clear disclosure of calling plan information we provide and neglects to include any of the many tools available to our customers to help manage their accounts."

 

The Federal Communications Commission isn't sure that's enough. Partly in response to the Globe report, the FCC launched an initiative on "bill shock" this week, asking for public comment. (The .pdf documents are listed under "Headlines" and include a list of tips for avoiding surprise charges.)

"We are hearing from consumers about unpleasant surprises on their bills," Joel Gurin, the chief of the FCC's Consumer and Governmental Affairs Bureau, said in a news release. "We've gotten hundreds of complaints about bill shock. But this is an avoidable problem."

 

He noted that carriers in the European Union are required by law to send text messages to consumers when they incur roaming charges or get close to a set data roaming limit. "We're issuing a public notice to see if there's any reason that American carriers can't use similar automatic alerts to inform consumers when they are at risk of running up a high bill," he said.

 

The St. Germains' situation is not the first case of a wireless costumer unwittingly running up an enormous bill, with Verizon and competing carriers. One man reported being charged $62,000 for downloading a movie while traveling in Mexico, reports Ars Technica. Many families have stories of unexpected bills in the hundreds of dollars for in some way going outside the parameters of their plans.

 

We Americans love our cell phones, but we hate our cell phone companies. The complexity of plans, the ever-changing nature of the rules and technology and what passes for customer service seem to make us all victims of the worst of "gotcha" capitalism.

 

Cell phone plans and contracts are full of treacherous and expensive pitfalls. Use more than your allotted amount of minutes, data or text messages, and you can run up a big bill in no time. Have a kid who doesn't realize that Canada is not part of an unlimited U.S. long-distance calling plan? There's a bill for $3,500. (We won't mention which of my young relatives is still paying her parents back for that one.) Many customers  have complained about mysterious data charges for services they didn't use.

 

If you get mad as hell and decide you don't want to take it anymore? That's $350 to cancel the contract.

 

The St. Germains, with the support of some Massachusetts officials, have been contesting their $18,000 Verizon bill for four years. The company has offered to cut the bill in half but refused to budge further and sent the bill to a collection agency.

 

The Wall Street Journal's Law Blog asked its readers to decide on the case:

 

"IronMike" wrote:

The St. Germains should pay the bill. They entered into the contract. If the rates were disclosed, why shouldn't they pay what they contracted for? This after-the-fact negotiation of duties after performance has been done by one party is what is destroying the country. This is no different than someone buying a house, paying too much for it, and then blaming the bank. Did the bank make you buy the house? Did Verizon make you download all this stuff? Did they not adequately disclose the charges? Did they in any way not keep their end of the deal? No, you say? Then pay the damn bill.

But "CWYoung" wrote:

Because the customer had just spent two years doing this activity for FREE, Verizon should have a higher duty than normal to inform him that the promotional period was over, and that means a VERY SIGNIFICANT change was occurring to his plan, as opposed to simply including it in the fine print, which nobody ever reads or can understand. And . . . if they can include unlimited downloads in a plan for $30, how can they possibly justify over $12,000 in a la carte charges?

What do you think? Should Verizon back down? Should the St. Germains pay up? Should the FCC make new rules?

 

More from MSN Money:

915Comments
Feb 13, 2012 7:12PM
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update: my cricket unlimted package now only costs me about 48.00 a month with all taxes and fees included
Dec 4, 2010 9:07AM
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For anyone to say they should not be responsible for signing a contract since "no one ever reads the fine print or understands it" is the main reason we find ourselves in the situation we're in with credit and housing. If you sign a contract and then try to say no one reads the fine print, that does not make the contract void. As consumers, we have to read, and understand BEFORE we sign a contract and stop blaming everyone else!!

Oct 18, 2010 9:29AM
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Verizon: "Sign Your Name On The Dotted Line And Now Your Mine!!"

Please read before sign it helps. if you dont understand ASK!! pleasy pleasy with a cherry on top....
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