Late fees, billing glitches raise ire of some wireless customers : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread

CONSUMER BEAT Late fees, billing glitches raise ire of some wireless customers

By Bruce Mohl, Globe Staff, 11/19/2000

onsumers have been complaining for years about credit-card companies that jack up their late fees and trim the amount of time customers have to pay their bills.

Now many readers are wondering whether the wireless phone companies are moving in the same direction. Most of the complaints I've received over the last nine months have been anecdotal and difficult to verify, but Jeff Hastings has documented what he sees as a troubling pattern with his carrier.

Hastings, the customer-service manager at Bailey Distributing in Manchester, N.H., noticed several months ago that his company's accounts with Verizon Wireless were always incurring late charges.

The company has 26 phones and three different accounts spread across three states, so the potential for billing confusion existed. But Hastings didn't think the problem was on his end, so he began tracking his bills.

What he discovered was that Verizon's billing practices left little margin for error on his or Verizon's end. He said the system seems designed to generate late fees, which amount to 1.5 percent of the past-due balance on a bill.

One bill he tracked was dated Oct. 7, postmarked Oct. 14, and received at his office Oct. 20. Payment was due Nov. 1, giving him 12 days (eight business days) to process the bill internally and mail it to Verizon in New Jersey.

Even when Hastings sent off his payments quickly, he said they weren't always posted to his company's account promptly. One check mailed on June 16 was posted to his account June 22. Another sent Sept. 1 was posted to his account on the 12th. He said it was not unusual for checks mailed to Verizon to take as many as 10 days to post to his account.

After he complained about the process, Hastings said, Verizon agreed to waive late fees on his company's account, but he said Verizon doesn't appear to be correcting the larger problem.

''I assume there are thousands of people paying late charges because their statements come late,'' he said. ''It's a huge profit maker for them.''

A Verizon spokeswoman, Abra Degbor, said the company's goal is not late fees. She said Verizon has tried to be fair with Hastings, adding that he often failed to fully pay his bill. She said a review of Bailey Distributing's accounts indicated the company had, on average, 15 days to pay its bills from June through October. She said the 15-day window is common at credit-card companies and other businesses.

Degbor said it does appear Verizon's use of the term ''billing date'' on its bills leaves the mistaken impression that that is the date when bills are mailed out. Actually, she said, that's the date when the billing period closes. Bills are received by customers, on average, 10 days after that. She said the term is likely to be changed.

Cellular One, another leading wireless provider in this area, does not assess late fees on corporate accounts, although it does impose a $5 late fee on individual accounts. AT&T charges a 1.5 percent late fee on both corporate and individual accounts. Both companies appear to have billing practices similar to Verizon's.

Tony Holowitz of Airtime Advisors (www.airtimeadvisors

.com), a company that advises consumers on wireless service, said what Hastings is facing is common, particularly in the business world. He said most companies cannot process and send out a bill in less than 30 days, and he says wireless firms know that.

Holowitz said most wireless customers are bound by contracts of at least a year, which gives them little leverage in battling poor service.

''In my mind the wireless companies have no incentive to give good customer service. When they don't, they make a lot of money,'' he said. ''I think it's an issue all over the country.''

Holowitz said late fees are somewhat unfair, since many wireless companies, including Verizon and Cellular One, charge customers their monthly fee in advance.

I've received many complaints from consumers about puzzling recurring late fees on their wireless phone bill, but most of the stories have been hard to document.

Stu Silverman and Ron Boudreau, for example, told me this year that they were regularly slapped with late fees by Cellular One despite paying their bills electronically in advance.

''I get the sense that they deliberately either don't cash my check when they should or give me a late fee for no reason,'' Silverman said.

Both Silverman and Boudreau said they have not incurred late fees in recent months. The Cellular One spokeswoman said the company's billing policies have not changed.

Let's talk turkey

With Thanksgiving just around the corner, the big supermarket chains are vowing they won't be undersold on turkeys.

Stop & Shop, Shaw's, and Star Market are all promising to match any competitor's coupon, clipless coupon, or circular, with a limit of one turkey per customer.

Judging from the supermarket circulars I received last week, it looks like easy pickings. Stop & Shop, Star, and Shaw's are all selling their basic frozen turkey for 58 cents a pound. But Roche Bros., Victory, and Johnny's Foodmaster, none of which is running won't-be-undersold campaigns, all have frozen birds for 49 cents a pound. That's a savings of 9 cents a pound, or $1.80 on a 20-pound bird.

Unfortunately, I didn't find much price variation on fresh birds or Butterballs.

One thing I did find is that customers of the two surviving home delivery grocery companies - HomeRuns and Peapod - are going to pay more than their supermarket counterparts for turkeys this Thanksgiving.

Peapod is charging $1.29 a pound for the same frozen bird that Stop & Shop is selling for 58 cents. The HomeRuns charge is 79 cents. Oddly, the fresh comparison is closer, 78 cents at Stop & Shop vs. 99 cents at Peapod and HomeRuns.

There also is a wide price gap on frozen Butterballs. They cost $1.19 a pound at HomeRuns, $1.29 at Peapod, and 78 cents at Stop & Shop and Star.

Default electric service

A fifth of the state's electricity customers are on so-called default service and slated to see their power rates jump to market levels on Dec. 1, but not everyone on default service belongs there.

First, some definitions. Default customers are those who have signed on as new customers with their utility since deregulation began in March 1998. Standard-offer customers, those who have been with the same utility over that time period, receive a lower rate for power.

Edward Hoffer e-mailed me last week, complaining that both his home in Newton and his medical practice in Framingham are improperly listed as being on default service. He said he has lived continually in Newton since March 1998, although he did move once. He said he and his partner have continuously owned the building that houses their medical practice, although he said there was a period where they were affiliated with Lahey Clinic, to which the bills were addressed.

Hoffer had gotten no response from Boston Edison's customer service. I made a call to Edison and the matter was straightened out in minutes.

The confusion arose apparently because of billing name changes. When Hoffer moved, the bills shifted from his name to his wife's name. Likewise, the billing name at his medical practice switched when he and his partner parted ways with the Lahey Clinic. In both cases, the utility interpreted the name changes as new customers and shifted them to default service.

Mike Monahan, the spokesman for NStar, which owns Boston Edison, said customers should always check the accuracy of their bills. But asked whether he thought a lot of customers might be misclassified, he said, ''I don't think so.''

Bruce Mohl is a member of the Globe Staff. He can be reached at 617-474-2510, by e-mail at, or at The Boston Globe, P.O. Box 2378, Boston, MA 02107-2378.

-- Carl Jenkins (, November 20, 2000

Moderation questions? read the FAQ