Understanding Your Cell Phone Bill

Source: AARP.org | April 11, 2006

As you check your cell phone statement every month to make sure it is correct, it's not always easy to understand what it means. And if you don't know what all the charges mean, it can be difficult to know whether something is wrong.

Charges You Agreed To
First, check your statement to make sure you are being charged only for services you requested. These charges are frequently called recurring charges because you pay the same cost each month. You may have to refer back to the contract or service agreement to know what services you signed up for. Many plans offer-at an additional cost-text messaging, three way calling, extended hours or additional minutes. You don't want to be charged for a service you didn't order.

Before you sign a wireless service contract get a good explanation of each extra item's cost to you. Ask for a sample statement that includes only the features you ordered so you won't find any surprises when you get your first bill. Your first bill shouldn't be the first time you see all of the charges. After you have signed the contract, you typically will be locked into those fees for the rest of the contract. If you see a charge on your statement that isn't correct, contact your provider.

Charges That Add Up
Next, check your wireless statement to make sure you selected the right service plan. Before you got your cell phone you had to guess how much you would use your cell phone. After you have used your cell phone for a while you can tell by studying your statements if you need to change plans You don't want to pay too much and have a plan with more minutes than you routinely use, but you also don't want to pay a lot extra each month if you go over your minute maximum.

Cell phone costs are calculated differently than regular land lines. You are probably accustomed to paying the flat monthly charge for unlimited local calls and per minute charges for long distance calls you make on your land line. Wireless services charge by the minute for all calls that you make as well as those you receive. Also there's a difference between what's a "local" call and what's "long distance." Depending on your wireless service, you may see "roaming" charges at a higher per minute cost if you make calls outside the service's calling area.

Most cell phone companies offer a trial period, however it is seldom long enough to let you review your first bill before hefty contract termination penalties kick in. Many cell companies allow you to move to a different plan with more—or fewer—minutes. Before you change plans be sure you find out if you will be charged any new fees, or if you will have to extend the length of your contract.

Charges You Don't Understand
You expect to have to pay federal and local taxes. But your cell bill may have several other charges that sound like taxes or government fees. These go by a variety of names like regulatory cost recovery, Federal Universal Service, E-9-1-1, or number portability. The government does not require the companies to collect these fees. They are the business costs to comply with government regulations. If you see a fee you don't understand, ask your carrier to explain.

When You Have a Question or Complaint
First go to your service provider for answers or to resolve your issue. Try to negotiate with the company if you think you have been wrongly charged. If you need to take it up a step to get satisfaction, contact your state public utilities commission or Consumer Council. You can also file complaints with the Federal Communications Commission.

AARP Resources

Stop Phone Cramming
Your bill may have been "crammed" if you see unauthorized charges. Get tips on how to recognize a crammed bill and what you can do to get them removed.

Shopping for Cell Phones
Get tips on how to comparison shop for the right wireless service.

Phone Slamming on Long Distance Calling Plans
If your long distance carrier suddenly changes without your authorization you have been slammed. Find out what steps you can take to get back with the carrier you selected.

Additional Resources

Sample Wireless Phone Bills
See a sample wireless phone bill with explanations of all the possible charges.

Understanding Your "Traditional (Wired) Phone Bill" Charges, Changes and Contacts
The FCC explains what you can do to stop fraud on your landline phone bill.

Charges on Your Traditional (Wired) Phone Bill
Get an explanation of the various charges and items on your monthly landline phone.