Charles Rex Arbogast/AP

Are You Paying More Than You Think for Your Cell Phone Minutes?

March 09, 2009 06:45 PM
by Denis Cummings
A consumer advocacy group has released a report finding that many cell phone users do not understand their bills and end up paying dollars per minute.

Many Cell Phone Users Pay Over $10 a Minute

The Utility Consumers' Action Network, a consumer advocacy group based in San Diego, released a study Monday revealing that "consumers are paying far more for long-distance service and wireless service than they-and regulators-believe."

The study, TeleTruth Phone Bill Study of UCAN Customers, examined the phone bills of 703 San Diego residents over a four-year period. It found that many users do not choose a plan that is suitable for their usage and end up paying for unused minutes.

The study declares that the average user pays $3.02 a minute, but this number is heavily skewed. The majority of users—51 percent—pay less than a quarter per minute, while 75 percent of users of multiple-person plans pay less than a quarter. However, there is a significant amount of single-line users with high per-minute costs.

On average, single-line users pay $5.33 a minute, over 18 times more per minute than users on multiple-person plans. This number is driven up by the 49 percent of single-line users who pay over a dollar per minute and 21 percent who pay over $10. The high costs are due mostly to the fact that the average single-line customer uses just 21 percent of the allotted minutes.

The study determined that the reason so many people pay such large costs per minute is because they overlook or cannot understand their bills. “Most bills were written and formatted so opaquely that even when customers tried to decipher their statements, they often couldn't make heads or tails out of what they were being charged for,” writes the Los Angeles Times’ David Lazarus.

The study authors blame deregulation for the increased costs and confusing plans and bills. As a solution, they suggest that all bills contain a “‘Unit price box’ ... that gives the customer basic information-the price per minute using the formula-total costs divided by number of minutes of use.”

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