If You See These Fees on Your Phone Bill, You’re Being Overcharged
Updated: Aug. 16, 2024
It's time to check your cellphone statement! Unauthorized wireless company charges are common—and have no business being on your bill.
When was the last time you looked at your phone bill? If you’re anything like us, you rely on autopay and don’t scan the bill each time it’s due. But you may want to start reading the fine print—you could spot wireless company charges that are hitting your wallet hard. While some of these fees may seem “accidental,” it’s worth taking a closer to make sure you’re not being overcharged.
Cell phone bills are notoriously hard to read, and it can be easy to misunderstand the words and phrasing, which are intentionally vague. As a result, you may be overcharged because you’re paying for protections or services you don’t want or need. We think of phone scams as coming from shady con artists, but your wireless company can scam you too.
To help you avoid paying more for your phone service, we asked consumer protection experts to break down wireless company charges. Keep reading to learn what these fees are and how the experts advise dealing with them so you can lower your bills.
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Which words on your phone bill are red flags?
When looking over your statement, you may see wireless company charges that are unavoidable—like government-imposed taxes—but you may also see words that are familiar yet ambiguous in their meaning. There are three phrases to watch out for on your mobile phone bill:
- Administrative fee: This is often vague and can be inflated without clear justification.
- Regulatory recovery fee: This is a catchall term that varies and may not reflect actual costs.
- Third-party charges: These can be unauthorized charges for services you didn’t sign up for.
“As someone who has worked in the financial technology sector for a while, I know how these hidden fees on your phone bill fees can be insidious,” says Kevin Shahnazari, a consumer protection expert, data scientist and founder of FinlyWealth.
Shahnazari believes in using technology to democratize financial services and give people the power to make informed financial decisions, and he knows that a lot of wireless company charges aren’t transparent or fair, and they can result in unnecessary money loss.
“One of the most egregious examples I have come across is ‘premium services charges,’ a catchall for unauthorized third-party charges that cost up to $600 annually,” he says. “They often appear under innocuous labels like ‘service fee’ or ‘premium content,’ thereby disguising their true nature. For this reason, I advise consumers to check their bills carefully for any unknown charges, no matter how small.”
How do these charges end up on your bill?
At some point or another, we’ve all said “yes” to charges we later question. Sometimes, you sign up for a service that sounds good … until you realize you don’t need it. That can happen with protection plans and insurance. Other times, you agree to services that double or triple over time because you don’t understand the ambiguous language.
Other reasons these charges may be on your bill: You signed up for an introductory offer that automatically shifted to full price once the trial period ended. Or you enrolled in a wireless service without realizing the sign-up form automatically checked “yes” for several add-ons.
Often you have “cramming” to thank for overstuffed wireless bills. It’s the official term for a scam in which a company adds unauthorized charges to a wireless bill, and the Federal Communications Commission (FCC) estimates that tens of millions of Americans have experienced it. How do you know if you’re dealing with cramming? You may see vague charges (think: “service charge” or “other fees”) or an unexplained “monthly fee.” Or you might notice services on your bill that you didn’t sign up for—or those you unwittingly signed up for because they were included in the fine print or as part of a service bundle.
Are these fees legal?
“These fees aren’t always illegal, even though they are usually unethical and contestable,” Shahnazari says. Cramming, however, is illegal under FCC regulations.
No matter what, the fees on your wireless bill should be transparent and easy to understand. Most important, they should be authorized by you. Charges you didn’t approve may violate consumer protection laws.
What should you do if you notice these charges?
If you notice unusual wireless company charges, try these steps, recommended by Peter Adderton, the founder and CEO of MobileX and Boost Mobile.
- Call your carrier. You have every right to ask for an explanation of the charges.
- File a complaint. If you’re unsatisfied with the company’s explanation of your wireless charges, you can file a complaint with the FCC for wireless service or long-distance calls. Or file a complaint with your state’s phone company regulatory agency for in-state services.
How should you protect yourself from wireless companies overcharging?
“You’re already partially protecting yourself if you turn on all possible billing protections your carrier offers and regularly review statements for suspicious charges,” Shahnazari says.
To avoid hidden fees in the future, take these steps:
- Understand your contract terms. (Yes, actually read them!)
- Review your phone bill each month.
- Stay informed about changes to your service agreement or monthly pricing. Make sure you know what the services and charges are for.
- Reach out to your provider about any questionable fees.
- Negotiate a refund if you have been charged without your consent.
Shahnazari says it’s smart to call your provider and demand an itemized explanation if you notice any charges you don’t recognize. If the problem persists, do not hesitate to send an FCC complaint. “Being proactive and vigilant is your best defense against predatory practices,” he adds. “Consumer complacency feeds the telecommunications industry; don’t let them exploit you.”
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Sources:
- Federal Communications Commission: “Understanding Your Telephone Bill”
- Kevin Shahnazari, data scientist, consumer protection expert and founder of FinlyWealth
- Peter Adderton, founder and CEO of MobileX and founder of Boost Mobile
Originally Published: August 16, 2024
