Ripoff Alert #3 – Cell Phone Cramming Edition

The Ripoff Alert is a new series appearing once each week on Fridays. It alerts you to the latest scams and ripoffs trying to get between you and your money, and gives you information you need to stay safe.

Cramming

According to the FCC, cramming is “the practice of placing unauthorized, misleading or deceptive charges on your telephone bill.” Providers of cell phone service, traditional land line service, and business line service cooperate with third-party marketing organizations to put unauthorized charges on your account.

For individuals the charge typically ranges from $3-$5 a month, and for businesses it’s more like $20-$30 a month. The phone companies are hoping you won’t notice such a small amount. Multiplied over thousands of accounts, this is real money for service providers and third-party marketers, who split the spoils. (Doesn’t this get your blood boiling?)

A little over a year ago as I was going through our family cell phone bill, I noticed a suspicious charge for $10 on my sister’s line. It had a vague description like “membership fee”, so I called them up and asked what it was for. Apparently she had signed up for a monthly ringtone service via text and was being billed $10 a month for it. However, my sister said she hadn’t signed up for anything. So I asked them for a credit on my bill, and I was surprised when they offered to credit the entire total of charges going back 6 months.

Most consumers and small business owners, however, don’t go through their cell phone bills every month to see what they’re being charged for. Be suspicious of items like “monthly usage fee”, “service fee”, or “membership”.

Cramming can occur even if you’ve authorized a service but were misled about how much it would cost. And next time you get a spam text, don’t ignore it because it could be a warning sign that your phone company is about to rip you off.

There’s a federal law that requires phone providers to clearly explain each charge on your monthly bill, but this doesn’t mean they always follow the law. You need to go through your bill each month and check for phony charges. Basically, you should call your provider and question anything that is unclear. In most cases you’ll be offered a 2-month credit on your bill.

Has your phone company tried to rip you off with one of these charges?

17 thoughts on “Ripoff Alert #3 – Cell Phone Cramming Edition

  1. My phone company always charges my boyfriend roaming fees even though he hasn’t left the country in two years. They refuse to just stop charging them, so we have to call every single billing period and argue with 4 people for them to go away. It’s ridiculous!

    • That’s really annoying. I thought roaming wasn’t an issue anymore since most providers now use a national network. If you have other options in your area you should consider switching to one with better customer service.

  2. Daisy it sounds like your boyfriend really needs to switch phone companies. The problem is I’m sure he’s locked into a 3 year contract that he would have to pay a hefty fee to get out of. That makes it even easier for phone companies to abuse their customers. That’s why I’ve been so hesitant to upgrade to a smart phone and sign some long term contract. I know that would just make me too tempting a target.

    • Locking you into a contract does make it easier for companies to treat you like dirt. The only thing they care about is that they get their money each month. Since you’re locked in, they have no incentive to offer better and innovative service. Here in the US we have several no-contract options…you should consider those if they’re available where you live. With some of these you can even get a smartphone.

    • Yeah, you have to watch out for those mysterious fees. Normally it’s just the cell phone company charging you fees and hoping you won’t notice. They think we’re idiots!

  3. I have actually had that happen to me as well! I am also on a family plan with my parents and siblings. I recently gave the carrier a call to order a new phone and asked why my bill was so high all the time. The operator actually told me it was because my father signed up for a program to ensure he did not receive any promotional text messages. I immediately knew that he would never sign up for anything like that because I am the only person who calls the carrier and deals with customer service. Also they had no record of him calling in to turn on that service.

    It just goes to show that you have to be very careful and make sure you are staying on top of your bill each month. Great post! Very informative!

    • That’s funny…you have to pay the cell phone company to stop them from sending you spam texts. It’s amazing the nerve of some providers. They have no problem squeezing every penny they can out of us, only to provide inferior products and customer service. It’s outrageous!

  4. Last year I suddenly got charged for voice mail that I didn’t even have on my landline phone. I caught it the first month they charged it, called them and they charged me again the next month. It was an outside company that was charging me. I eventually got credits applied to my bills.

    • That’s great you were able to catch it the first month. So many people never look at the details of their bills and just pay it every month. It’s outrageous that phone companies allow third-party organizations to put unauthorized charges on our bills. It’s unethical and we shouldn’t tolerate it.

  5. This is so true! Boyfriend used to sell cell phones and he related that you wouldn’t believe the number of customers that come in with this complaint. We have to call in every month, too. It’s so ridiculous. I have yet to find a company that doesn’t do it.

    • Think of how many fewer calls the customer service departments would get if this wasn’t going on. The phone providers could probably eliminate hundreds of employees and save a ton of money. Instead, they are in cahoots with third-party marketers trying to rip us off. Not a good way to treat your customers!

  6. I always knew that Cell Phones try to hide somewhat “legitimate” charges and fees on your phone, but not anything like this. This is just wrong. I’m going to need to double check my past bills.

    • I’m glad I’ve inspired you to check your bills closely, MMD! It’s a good thing to do every month, or at the very least quarterly. It gives me peace of mind knowing I’m not getting ripped off.

  7. The big one for us was the insurance for new phones. I have to make sure that’s taken off nearly every new phone I buy.

    • Hi, AverageJoe! Yes, cell phone companies love to add insurance automatically when you sign up for a new contract. Some offer their own insurance, while others contract it out to a third party. Either way it’s not a good buy because after the $6 monthly fee, $50 deductible and all the limitations you’re better off looking for a used phone on eBay or Craigslist if something happens to your phone.

  8. Pingback: My Money Design » Weekend Wind Down 5/26/2012

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