Think you’re getting a deal when you upgrade your cell phone? There are hidden fees you may be paying without knowing it. The Red Tape Chronicles did some investigating and discovered cell phone retail salespeople mocking their customers, describing how they mislead the unsuspecting:
* “If someone asks me why upgrade fees are charged, I simply tell them that it is so I can get a paycheck. Most people just laugh and end up signing up.”
* “(I) wait until it pops up on their bill. Never when selling the phone.”
The biggest offender according to the article is Cingular, while my phone company, Verizon Wireless, seems to be absolved. Verizon has a long-standing “New Every Two” promotion in which customers on two-year contracts are automatically given a $100 discount on a phone every two years. If the chosen phone is less than $100, it is free. It certainly helps with keeping customers loyal year after year, but we must be paying for it somewhere else.
Updated February 6, 2012 and originally published August 7, 2006. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @flexo on Twitter and visit our Facebook page for more updates.
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{ 4 comments… read them below or add one }
Blah. My phone died this weekend. Let’s see what Verizon charges me today.
Nice template change. I like the lighter colors, but you can tell I’m already partial to pastels.
Upgrade fees are actually justified. All companies do them, and it’s to go towards discounts in other areas and support other free services. At least, that’s how it is with the company I work for. We offer lots of different free services from the phones and the website, and the only way we can keep these services free and easy is to charge upgrade fees. It all makes sense when you hear the business explanation from someone who knows what they’re talking about. It’s easy to think it’s bogus when you have no idea how cell phone services work.
I never had a problem with verizon wireless. i have had them for a solid 4 yrs now. Changed phones many of times. even got out of some of the $35 connection feels when registering a new handset. I have a family plan with 4 lines, and every 18months i get the free phone or early upgrade. NO MONEY out of my pocket, nothing changed on my bill either.
I also just go directly through the VZW DIRECT store, or call customer service. Sorry everyone is having a problem. I guess i just got lucky so far.
Jawsche,
Please tell me HOW a company that charges me $200 for a phone has to charge me to use it? Shouldn’t that be included in the fee when I buy the phone in the first place? Had I know that the charge for using this phone would be $218, I would probably have gone much cheaper. The salesperson at the AT&T store never mentioned this fee ONCE. This is misleading. I refused to pay it the first time I saw it conveniently “show up” on my bill. I tried to call AT&T but it was after business hours. So surely they aren’t using these fees to pay for round-the-clock customer service.
When the fee showed up on my second bill, I called AT&T during hours and the customer service rep was happy to waive the fee. If this fee is necessary, why was it waived so quickly and easily?
I don’t enjoy free ANYTHING with my phone service, so I cannot see how charging me this hidden fee AFTER the fact is justifiable.
I think the cell phone companies sell us garbage equipment at prices that create enormous profits to begin with–now they want to nickel and dime us claiming they have to spend time and money to “switch” lines to better phones? Sorry…I don’t buy it. Please outline the reasoning in detail so that you can actually back your claim that this fee is necessary.