A common complaint among consumers is that wireless bills seem to always be rising, even though carriers claim their rates aren’t going up.
How is this possible? An underhanded way of assessing fees, called “nickel-and-diming,” can cause customers to pay more on their overall bills even though the base rates stay the same.
Time Magazine reports that AT&T recently instituted a new 61-cent “administrative fee.” The magazine calls it “pocket change,” but it can certainly add up for customers.
Time reports customers also pay a “regulatory cost recovery charge” that ranges from 16 cents to $1.61, a “federal universal service fee,” and a “gross receipts” charge.
And it’s not just AT&T—Verizon, Sprint and T-Mobile also tack on these “below-the-line” charges, which are notorious for vague explanations and have no recourse against paying them.
Wireless companies tend to charge these fees per-line rather than per-plan, so a family with multiple lines may pay these fees several times over.
Although the fees look and sound like taxes, they often go towards padding the companies’ bottom line. The Wall Street Journal reports that AT&T could earn $350 million this year from the new administrative fee alone.
So what can you do? Be aware of the fees your carrier charges by reading your bills carefully, and when it comes time to renew, consider a carrier with more transparent pricing, or a prepaid cellphone plan.