Phony Charges (this time, it’s personal)

I upgraded my cell phone plan to save money, but discovered phony charges instead. I got all new phones and went from 700 minutes to 900 minutes, and my bill was supposed to drop about $30 a month. Then I opened my next bill, which was the first bill on the new plan. Merry Christmas, it’s $35 more than expected!

Examining the Bill

The extra charges were a result of going over the allotted minutes, which almost never happens, even though my plan has low minutes and multiple phones (heh, I’m cheap and I sail a tight ship). I added up all the minutes that are charged (excluding mobile-to-mobile, weekends, incoming minutes that I don’t get charged for, etc.), and I ended up with some 500-odd minutes.

I called the billing number and spoke to a friendly associate who said she was eager to help me. When I asked her to explain how I went over my threshold of minutes, she added up all the minutes (out loud as she went through my bill) on all the phone numbers on my plan and confirmed I only a little over 500 minutes. So I asked her, “If my former plan had 700 minutes and the plan I upgraded to had 900 minutes, how does using 500 minutes put me over?”

Pro-rated Charges

“Well,” she said, in a voice coated with red licorice, “we pro-rated your minutes between the 2 plans. We took the number of minutes allowed each day under your former plan (700 minutes/30 days = 23 minutes per day) times the days you were on that plan (10 days) to get your allotted minutes under the former plan (23 minutes per day * 10 days = 230 minutes). During those 10 days on your former plan, you used 400 minutes, so you were over your allotted minutes.”

I checked my watch to make sure the date wasn’t April 1. Negative.

As my frown grew deeper, she continued, “We did the same thing with your new plan, but you were fine during that period. You were allotted 500 minutes and only used about 100.”

“Wait a minute,” I interjected, “I still don’t understand why I was charged extra when I only used 500 minutes. Even using new math, 500 is still less than 700. Nowhere in my agreement does it say I’m allotted so many minutes per day; rather, I’m allotted so many minutes per month, correct?”

A Fistful of Dollars

“Yes,” she replied, hesitantly. “I’ll remove the charges.” After a flurry of keyboard strokes echoed in my ear, she said, “I’ve credited your account $32. Is there anything else I can do for you today?

“Yes, please walk me through all the charges you removed on my bill,” I requested. When she finished, I asked, “Shouldn’t you also remove the $3 charge and the associated taxes on page 21 for the phone number ending in 55?”

A moment of awkward silence…

Finally, she said, “Sorry about that. I fixed it. I missed the charge on your last phone number. Thanks for catching that.”

“No problem,” I said with a chuckle, “I’m an auditor.”

Questions for Reflection

As I reflected on this event, I pondered the following…

  • Why is the billing system coded this way? This process makes sense if you’re going from a plan with more minutes to a plan with fewer minutes, but it’s a definitely money maker in instances like mine—who upgrades to a higher plan and does not use the extra minutes (besides me, I mean)?
  • Is the company aware of this issue, and if so, why haven’t they fixed it? Don’t company auditors review the business logic behind their billing systems occasionally? A simple calculation comparing the total minutes of the 2 plans early in the program would apply the pro-rating only to plan changes to which it would apply. Perhaps the company is making too much $ to fix it, or IT funding isn’t available (where’s the payback?).

I googled the issue and found these companies at least mention the issue in their FAQs: U.S. Cellular and Verizon, but that doesn’t make it right or ethical. Also, multiple companies do it, according to these complaints: U.S. Cellular example (2005), Verizon example (2010), AT&T (not dated; warning: offensive gesture).  Exception noted! In other words, it is standard practice to overbill customers. Since some customers don’t review their bill, aren’t brave enough to question some charges, demand to speak to a manager when a credit is refused, or finally, threaten to take their business elsewhere, companies continue the practice and the $ pours in.

  • Regarding the last $3 I caught, was that human error, or are the billing specialists trained to hold out a small carrot and only surrender the whole carrot when challenged? I tend to think it was human error, which is understandable (I made one last year myself).
  • If it was human error, was it caused by data analytics? In other words, most call center staff are rated (or rated as a pro, ahem) according to how fast they resolve issues and end the call–so was the specialist in a hurry to satisfy me and move on, knowing it was a long call already, and her manager would be reviewing the statistics at the end of the week? Based on our conversation, I didn’t get this impression that she was in a hurry. But again, I always wonder about those “mean-time-to-resolution” statistics affect customer service.

Why am I so suspicious? Because I catch these types of errors (billing and human) several times a year, and it usually adds up to at least $500/yr.  Medical bills are the worst, in my opinion.

Your Turn

Let me know if you’ve had a similar experience, think businesses bill customers excessively or make “errors” on purpose, think I’m too cynical, or don’t think reviewing all your bills, bank statements, 401K statements, etc., are worth your while.

Read about another strange account statement I received:

High Cost of 401K Accounts

401K Woes Resolved

3 Comments

Filed under Audit

3 responses to “Phony Charges (this time, it’s personal)

  1. coffeeking

    I would think it is too profitable for companies to take out this practice, honestly, how many people would have caught this? most people wouldn’t even question beyond the statement “you went over your minutes”, they would assume that they actually did, you were able to catch it because, like you told the lady on phone “I’m an auditor”, it is in your blood to pay attention to things and questions.

    Off course something like this is totally unethical as it isn’t mentioned in the contract and the customer is not aware of it, not sure how something like this could even be in practice from a legal point of view.

    It is definitely worth checking out your bills and docs, I hadn’t started doing it until recently and hope to adopt the practice and practice the way you are doing it, like you said, it saves hundreds of $s a year.

    Like

  2. coffeeking

    I am going to post this in my LinkedIn group to show an auditor’s eye, hope it would be OK with you.

    Like

Leave a Comment

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s