How to avoid expensive and unnecessary cell-phone charges

Tech It Up!

While many of us are now willing to pay upwards of $100 per month to connect our smartphones and tablets to cellular networks, there is still the potential for "bill shock" if we don’t read the fine print.

From the man who was charged more than $62,000 for downloading "Wall-E" while traveling to Mexico to the two buddies in Philadelphia who were hit up for $26,300 after attempting to set a world record for text-messaging, there are many cellular horror stories that will motivate us to abide by even the most arcane rules and regulations. There are also more hidden and less outrageous charges found in practices like text-message “cramming” and in-app purchases that can add to your monthly bill.

Here are the five most common and potentially budget-breaking types of cell-phone charges, along with some best practices for avoiding them.

1) Roaming charges when traveling abroad
Even if you pay close to $200 for all the unlimited bells and whistles on your cell-phone plan, you can still incur additional and exorbitant fees if you travel outside of the country without first changing to an international plan. Most carriers will allow you to upgrade to international voice, data, and text plans for an extra $30 or $40 per month (and on a month-to-month basis). While those plans are annoying and inflexible, it is better to shell out $40 rather than $2,500 or even $200,000 in international roaming fees.

Last year, Florida resident Celina Aarons was hit with a $201,000 bill from T-Mobile when her brother – who is legally deaf and on her family plan – spent two weeks in Canada frequently texting and downloading videos from YouTube. Although Aarons did not have a legal case against T-Mobile, she shared her story with the local media. Subsequent public pressure helped motivate T-Mobile to lower the bill to “only” $2,500. Ouch.

Thankfully, the major cell-phone carriers are all pledging to send consumers alerts before they incur international roaming as well as other overage charges. This is scheduled to begin on October 17, and all carriers should be compliant by April 17, 2013. Still, it’s better to get organized ahead of travel than to be notified while traveling (or worse, after the fact). 

Even if you never place a call, send a text, or download an app or game while out of the country, you could still be charged international roaming fees just for having your phone turned on. Your phone may have apps that consume data without you knowing it. You are also subject to extra fees for incoming calls and texts. So if you don’t plan to use your phone at all, make sure to power it off completely. If you want the flexibility to make calls in the countries where you travel, another option is to purchase a prepaid SIM card that is connected to a local number.

2) Consuming extra minutes from checking voicemail
While the chances are extremely low that you will get hit with triple-digit or higher charges for checking your voicemail, you may be paying a few extra bucks per month than necessary for checking your messages. Every time you check your voicemail from your phone, you are using up precious minutes on your plan. A recent study from consumer research service BillShrink shows that Verizon customers on average pay $3.61 per month to get access their voicemail. It’s not much better for AT&T customers, who pay about $2.44 each month to hear who called them.

If you have a plan with unlimited minutes, feel free to check your voicemail as often as you’d like. However, if you are on a plan with a predetermined number of minutes and want to save an extra $30 or $40 per year, than retrieve your messages for free from a landline whenever possible. To do this, simply power off your phone and then dial your number from a landline connection. Once you hear your outgoing message, you will be prompted to enter your password. From there, most carriers will let you retrieve, save, or delete messages from an old-school phone just as you would from your mobile device.

3) Falling prey to cramming scams
Have you ever inadvertently clicked on a spammy text message sent to your cell phone? If you have, you may want to double-check your cell-phone bill, as you might be a victim of a practice known as “cramming.” Some nefarious outfits even cram services like ringtones, horoscope readers, or cheesy quiz games onto your phone by barraging you with text messages until you overtly text back “no” or stop.” Making matters worse, many of these services appear as legitimate-looking names and acronyms on your cell-phone bill. So you can be incurring $10 per month (or more) for these scams and think they are just one added charge from your cell-phone carrier that you do not understand or notice.

The Federal Trade Commission estimates that consumers are losing approximately $2 billion per year in cramming scams. While federal government agencies are paying closer attention and many states are introducing legislation designed to outlaw and eradicate cramming, it’s never too early to investigate if this is already happening to you. The Federal Communications Commission offers tips on how to identify crammers. In addition to analyzing your phone bill for unrecognized charges, the FCC site outlines actions you can take from contacting your cellular carrier to issuing formal complaints against crammers. 

4) Not having control over in-app purchases

Just because there is no download charge for an iPhone or Android game doesn’t mean it is necessarily free. Many smartphone games – among other applications – let users play a session or two for free before charging anything. And while most of us can budget whether or not we want to invest in an extra life or special power in that first-person shooter game, it’s not as easy for younger children to make that determination. Up until last year, it was easy for young children to pay for in-app services without having access to a parental password for Apple’s iTunes App Store. While Apple – responding to legal pressure – has tightened up its restrictions for in-app purchases, it is very possible that your kids know your password (and are paying for expensive games as you are reading this article).

The safer call is to disable in-app purchases altogether for Apple’s iDevices. Here’s how you do it. Just go to the "Settings: app on your home screen and once there scroll to "General." There you will see the option to enable or disable "Restrictions." To enable restrictions for in-app purchases, you can set up a separate passcode from your iTunes account that you can hopefully keep secret. 

5) Too much texting and data
The two texting buddies in Philadelphia we told you about not only set a record for the number of messages sent in a month, but also were able to get out of the $26,300 price tag after it was revealed they both had unlimited texting plans. Even if you text infrequently, it’s worth it to invest in an unlimited domestic plan if you want to put a cap on the potential cost. And while most carriers offer unlimited texting plans (which are standalone or rolled into voice and texting plans), only Sprint offers unlimited data for surfing the Web, downloading videos, and running games and applications. The other major carriers – AT&T, Verizon, and T-Mobile – either charge overage fees once you go beyond your monthly data allocation or, more recently, throttle and slow down data speeds once you reach a certain threshold.

There are several ways to lower your data bill, including accessing wireless Internet connections whenever possible, turning off GPS tools and other apps while not using them, and downloading iPhone and Android applications that help you monitor data usage and consumption. Depending on what type of smartphone and operating system you use, there are also ways to monitor usage already available on your device. If you own an iPhone, tap the "Settings" icon, go to the "General" section, and scroll down to "Usage."

This will provide a stopwatch-like snapshot of how much data you use over the course of time. Newer Android devices that run on the Ice Cream Sandwich operating system also have this functionality. 

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