I-Team: Are you paying too much for cell phone service?

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by Dave Fehling/11 News

khou.com

Posted on November 11, 2010 at 11:17 PM

Updated Friday, Nov 12 at 11:35 AM

HOUSTON -- You may be among cell phone customers spending over $300 a year on minutes, messaging and data that you’re not using -- a waste that totals over a billion dollars a year nationwide, according to information uncovered by the 11 News I-Team. 

And it’s not money from those “mystery charges” or penalties for going over usage limits.

"The biggest problem out there is people are on the wrong plans," said David Kolata of the Citizens Utility Board, a Chicago-based consumer advocacy group. 

On its website, it offers a free, online phone bill analyzer it calls the “cell phone saver.”

"We're saving the average Illinois consumer over $500 a year," contends Kolata who said tens of thousands of consumers have now used their service.

The group developed it with the help of a small company in Missouri City called Validas.

   
"We find eight out of 10 people (are over-paying)," said Thomas Pepe, who founded Validas with Todd Dunphy.

"We both worked at Verizon Wireless, “said Dunphy.

Here's how their bill analyzer works: using your electronic billing, it accesses your latest bill and compares your actual usage of talk minutes, text messaging, and Internet data. It then looks at the plans available and suggests which ones would save you money.
 
The 11 News I-Team provided a bill from AT&T for an iPhone .

“We found $25 a month in savings," said Dunphy, looking at a dashboard-like display showing the results on his laptop. He found international messaging that was not being used ($10 savings), as well as too much being spent on an “unlimited” data plan when all that was needed was a smaller, cheaper (200 megabyte) plan ($15 savings.)

"It's an annualized savings of $300," said Todd.    

A few dollars a month can add up to serious money when multiplied by millions of customers.

Case in point: last month, Verizon Wireless agreed to give back $50 million to customers nationwide for mistakenly billing for data services.

"Wireless companies have been running roughshod over for too long, and we think it’s got to stop," said David Butler with Consumers Union, an offshoot of Consumer Reports magazine. 

He said the FCC is proposing that wireless companies text you if you're about to go over usage limits. That would allow you to buy what you need without risk of getting hit with overage charges.
   
What's the cell industry have to say?

One company, Sprint, said it already offers automatic notification to customers about to go over limits.

“Customers can actually go on line through Sprint.com. We have set up in there where they can customize their own bill," said Todd Knudson , director of  Sprint’s operations in Houston. He said companies like his are not intentionally over-selling minutes and data.

 "I think that customers are on the right plans. And think their needs and their daily lives change continually. And we need to continually take a look at their bills," Knudson said.

The Verizon insiders agree that there’s no big conspiracy by the wireless carriers to over-charge customers. Instead, they blame it on a complicated billing system, so confusing, not even company sales people understand it.

"They don't understand it either,” said Dunphy. “So we always say, smart phone, dumb bill."

Whatever, or whoever the cause, consumer advocates said the result is customers spending money they don’t have to spend.

"We estimate that there's a billion dollars a year in potential savings," said consumer advocate Kolata.

Click here for more information from the wireless industry on how to track your minutes and data.

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