Are Carriers Making Their Phone Plans Intentionally Confusing?

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Cell phone carriers have a history of being perceived as a little... shady.

They've been known to inject hidden fees in the billing statements, confuse the consumer with specific terminology, and ensure that the fine print is incredibly fine. And for what reason?

Money.

Like all businesses out there, cell phone carriers are after your dollar in order to make a profit. It's what businesses do, but again, they are profiting off the consumer's confusion.

So we're here to clear some matters up.

We want to bring these shady tactics to light, not so you'll avoid carriers, but because you should be aware of what happens in the wireless industry.

We want you to be aware of the information carriers try to obscure and hide.

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We're going to be talking about unlimited data, technology terminology, hidden fees and bills, service contracts, upgrade programs and more.

Hopefully, by the time you finish reading this comprehensive guide, you'll be armed with proper knowledge when selecting your carrier.

Confusing Practices

According to the New York Times in late 2014, T-Mobile USA chief marketing officer Mike Siever admitted to the confusion:

"We're in a state of the industry where the carriers have sown a massive amount of confusion. Can you even decipher what's going on with the carriers anymore?"

Not really, and the answer hasn't changed since. In fact, it seems as if the carriers' terms, conditions, and practices have only become more confusing.

AT&T Mobility CEO Glenn Lurie also pointed out during that time period:

"I think we're propagating some confusion in the marketplace - us as an industry. There's been so much noise that customers are getting confused."

However, it's not the noise so much as the intentionally confusing practices and terminology that are employed, which can cause many wireless consumers to flock to other cell phone carriers. For instance, on many official carrier websites, you'll find the plan prices in a large and bold font, but if you notice the fine print, you'll see that the auto-pay discount has been applied to the price. However, people can confuse the plan price as the base price - without the auto-pay discount applied.

There are plenty more tactics that the wireless carriers employ, and unfortunately, it's all in the name of profit. So let's detail these practices, beginning with unlimited data.

Are Carriers Making Their Phone Plans Intentionally Confusing?

Unlimited Data - Not So Limited?

You have companies, including MVNOs, claiming that they have unlimited data plans when in reality, they're only referencing unlimited 2G data. This is incredibly confusing when you're looking for "truly" unlimited data plans.

MVNOs may offer plans with any number of gigs of data for you can use. For example, if you sign up for a 5GB data plan, you may enjoy 5GB of high-speed, 4G LTE data, but then get throttled down to 2G or slower speeds for the rest of the month. You might even be charged an overage fee, or be locked out of more data. Unlimited plans, which are rare on MVNOs, will either throttle you down from 4G speeds after you exceed a certain threshold, or you'll simply start at 3G or slower speeds, to begin with.

I'm sure the current unlimited plans from both MVNOs and the major carriers are tempting, but again, they aren't as fully unlimited as you think. An unlimited data plan, whether you get it from Verizon or US Cellular, will throttle you after a certain amount of data has been consumed.

In fact, if you read the fine print, you'll notice something along the lines of, "Your data speeds may be deprioritized during periods of congestion after X amount of data is used."

When you're deprioritized your speeds will be throttled. As in you're dealing with 64kbps or 128kbps speeds - up to 2G speeds, in other words. You'll thus be unfortunately limited to possibly checking your email and perform some light web browsing, but nothing else. That's not "true" unlimited data. Not in the slightest.

Related: Do you really need unlimited data?

Mobile Hotspots

You're also limited in terms of mobile hotspot usage. If you want to transform your device into a mobile hotspot or employ tethering, then you'll typically be able to use up to only 10GB of your data amount. So if you're hoping to use all of your data for mobile hotspot usage, then you'll be a little disappointed.

So when you're opting for an unlimited data pack, you will technically have unlimited data, but with wireless carriers, only so much of said data will be high-speed 4G.

Speaking of 4G technology...

Technology Terminology

Unfortunately, wireless carriers tend to advertise technology that isn't exactly offered. Even worse is the fact that the terminology is adopted by everyone in the wireless industry because the International Telecommunication Union has simplified the definition of said technology terminology.

4G or No?

Let's take, for example, 4G networks.

Several years ago, T-Mobile, AT&T, and Sprint advertised their 4G networks that didn't have close to 4G speeds. In 2010, T-Mobile stated that their 3G HSPA+ service was the "largest 4G network." Sprint and AT&T both claimed that Mobile WiMax and HSPA+ networks were 4G.

This isn't an isolated issue. It certainly appears that cell phone companies adopt new terms even if they can't deliver on those services, simply because the average person might not understand what 4G actually is. Rogers Communications in Canada admitted that their LTE network wasn't going to be deployed nationally for awhile - this was back in 2011. However, Rogers still slapped the "4G" label onto their HSPA+ network. Why?

Rogers placed the blame on competitors, who confused customers with the definition of "4G." So of course, Rogers joined the ranks and decided to also call everything 4G.

Even today, it's been pointed out that the current 4G network isn't a true "4G network," due to the speeds. 4G has maximum theoretical speeds of up to 100Mbps, and many countries offer 4G speeds that surpass 40Mbps. Most internet service providers don't even reach true 4G speeds, so don't doubt for a moment that your phone is faster than your computer.

During March 2017, one source has stated that the minimum and maximum speeds between all four carriers range between 3Mbps and 12Mbps (depending on the carrier), meaning that the wireless carriers are instead running on a 3.5G network. Tom's Guide, released a speed test among several major carriers and MVNOs in March of 2017.

Apparently, Verizon was the fastest, featuring download speeds of up to 36Mbps. AT&T was in second place, featuring average download speeds of 25.6Mbps. So does this mean that the carriers are finally on a 4G network? If we rely on Tom's Guide and the knowledge that the maximum theoretical speed of a 3.5G network (or HSPA+) is 21.6Mbps, then AT&T, T-Mobile, and Verizon Wireless networks have been running at 4G speeds. However, Sprint, with 17.7Mbps speeds, has not.

The wireless industry has also managed to shut down the introduction of the Next Generation Wireless Disclosure Act, which would have forced carriers to reveal a list of details about their network. With this bill, they would have disclosed the minimum data speeds, network reliability and coverage, and what technology was being used for 4G service.

Beware of Misleading 5G Statements

5G is the upcoming advanced network that will feature impressive speeds. Apparently, 5G will be so fast that you'll be downloading 4K movies, games, and more in just a fraction of the current time. In fact, according to Phone Arena, 5G will reach theoretical speeds of up to 10,000Mbps. Wow.

During April of 2017, AT&T advertised a "5G Evolution" service that gives Samsung Galaxy S8 and Samsung Galaxy S8+ owners in select locations of Austin, Texas faster mobile data speeds. Apparently, users will be able to take advantage of twice the 4G LTE speeds. Furthermore, the service will be available in over 20 major metro areas by the end of 2017. This sounds all fine and dandy, but this is misleading.

How so?

Well, for one, 5G is still in development. 3GPP, the central standards body of the wireless industry, has already stated that 5G technology won't be ready until the end of 2017. Furthermore, the complete standard won't be ready to launch until 2019. On top of that, AT&T doesn't detail what makes up the "5G Evolution" service. However, it does mention carrier aggregation, 4x4 MIMO, and 256 QAM. The funny thing? While you may not recognize these technological terms, they are advanced forms of 4G LTE technology. In fact, T-Mobile has been using the technologies since September of 2016.

While 5G Evolution isn't exactly the same as 5G, consumers can very well be confused, because 5G inherently sounds more impressive than 4G. So beware of anything that mentions the term 5G in its service for awhile. And even then, some carriers may take advantage of the term in order to draw in consumers, even when the carriers aren't utilizing 5G technology.

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Cramming Tactics Infect Bills

Let's talk about cramming for a moment. This is a practice that was devouring cell phone bills for some time now. T-Mobile, Verizon, AT&T, and Sprint have been allegedly involved with cramming tactics for a few years. Cramming refers to wireless carriers signing up customers to a service without the consumer's consent.

Oh, and the service would cost a monthly fee. The carrier would then attempt to hide the charges on the bill, confusing the customer. Furthermore, they would dodge or refuse to remove the unauthorized charge when confronted with said charge.

Fortunately, the FCC has been stopping the carriers in their tracks, slapping fines onto the wireless providers. For instance, AT&T paid a $105 million fine for cramming, T-Mobile paid a $112.5 million fine for cramming, and Verizon and Sprint paid a hefty amount of $158 million.

cell phones are intentionally confusing 1

Service Contracts

Wireless carriers are incredibly sneaky when it comes to contracts.

Misleading Claims Regarding "No Contract"

T-Mobile, just like the other carriers, has dropped the contract. All carriers claim that there are "no contracts" or "no annual contracts," but the unfortunate fact is that you're still tied to these companies in other ways. Contracts have been replaced with monthly payment plans for your phone.

Related Guide: Are No Contract Plans Actually Better Than 2 Year Contract Plans?

That's right. If you purchase a device as a lease or on a monthly payment program, you're technically bound to the company. When you attempt to leave for another carrier, you're responsible for the outstanding balance for any phones and equipment, which are due immediately. Unfortunately, that tends to be higher than the typical "early termination fee."

So, why not just have a provider buy you out?

Well...It's not always that simple.

Service Contract Buyouts

All four major carriers now offer to buy out service contracts and equipment, usually up to $650 or more.

T-Mobile, Verizon Wireless, Sprint, and AT&T will indeed buy out your contract, but not immediately. In reality, you will end up paying upfront and be reimbursed with a prepaid Visa card down the line. We do explain this process further in our guide to switching carriers.

Sometimes, you may end up with the card far longer than what's stated in the fine print. For example, T-Mobile customers may receive their prepaid Visa cards after the eight-week period that the company claims within the fine print.

There have even been customer complaints that suggest that T-Mobile may be denying complaints, even after the customer follow procedure correctly.

In other cases, that prepaid Visa card can only be used to purchase a new mobile phone or to use toward your monthly bill.

Rising Activation Fees

It was reported on January 20, 2017, that AT&T increased activation and upgrade fees for the second time within nine months. Ouch. The fees, which jumped from $20 to $25 for each device, applied to new customers when they activate a smartphone or existing customers when they upgraded to a new smartphone.

What about nine months ago? The activation and upgrade fees went from $15 to $20. However, these were "quiet" changes, which could completely blindside customers if they don't keep up with particular news coverage.

(Sometimes when you ask nicely, the carrier will simply waive the activation or upgrade fee - this has been my experience with Verizon, anyway).

"Just Because" Fees and Convenience Fees

Carriers tend to pack in fees that have no reason to exist. Many carriers charge convenience fees or "just because" fees.

Are they sneaky? You bet!

As an example, the Verge pointed out that AT&T added a "Mobility Administrative Fee" to its postpaid contracts in 2013. It's a $0.61 monthly fee, meaning that you would have to pay $7.32 per year. It's such a small charge, but it adds up. Because AT&T has millions upon millions of subscribers (at the time, over 70 million), it would net hundreds of millions of dollars. Of course, Verizon and Sprint have higher administrative line charges (perhaps T-Mobile too, but it bundles the administrative charges with regulatory charges), so it's not just AT&T. Verizon charged $0.99 per line for the administration fee, for instance.

cell phones are intentionally confusing

Upgrading Is Expensive

Over time, Verizon, T-Mobile, AT&T, and Sprint have been changing their upgrade programs. Again, if you, the consumer, are not on top of the news, you may find yourself confused and even "ripped off."

For example, I purchased a Samsung Galaxy Note 5 a couple of years ago, which I thought would be part of the Verizon Edge program. What confused me was the fact that someone, who had a Samsung Galaxy S7 Edge, was able to upgrade to the Samsung Galaxy S8. However, I wasn't able to take part in the early upgrade program.

I was forced to pay off my entire phone. How come? Well, it turned out that the Verizon Edge early upgrade program was canned and the Annual Upgrade Program was introduced... for certain phones.

No, the Galaxy Note 5 was not on the list.

It sucked, but hey, at least I was able to keep my phone after paying it off. Of course, you can also take advantage of the regular upgrade program from Verizon, which means no early upgrade option. Do keep in mind that you will be facing upgrade fees.

Related Guide: Why is Buying a Cell Phone so Confusing?

But this is how upgrade programs change. Sometimes you're left completely in the dark. No e-mail is sent notifying you of the change. You just end up... confused.

In the Past...

There were only four upgrade programs a few years ago. There were Verizon Edge, AT&T Next, T-Mobile Jump!, and Sprint One Up. Initially, these programs were intentionally confusing to the reader.

In fact, customers weren't saving anything with these upgrade plans. Overall, customers were initially paying far more over the short and long term. After all, you can take a look at Lifehacker's math to see how AT&T ripped customers off with the AT&T Next program. Nevertheless, why were the prices so high?

Because wireless providers have admitted to raising the costs in response to increased handset subsidies. So when the upgrade plans were unveiled - which eliminated said subsidies - what happened? The prices didn't decrease. Overall, upgrade programs were simply pricey and confusing.

However, since then, carriers have been working to improve these programs. And they have improved... sort of.

And Now...

Nowadays, the programs have only become more befuddling. For instance, T-Mobile now has three Jump programs - I kid you not.

T-Mobile has what is known as Jump, Jump Plus, and Jump On Demand. While Jump and Jump Plus sounds rather typical - Jump Plus features McAfee Security for T-Mobile and customer support for any tech product, whereas Jump original only sports Lookout Mobile Security. Jump On Demand features zero upfront and you'll never have to pay for the upgrade. However, you must be a well-qualified buyer. But you see how these three programs are confusing off the bat?

Sprint now has the following upgrade programs: Sprint Lease, iPhone, and Samsung Forever, Sprint installment agreement, a two-year commitment, or an early upgrade option. Yeah, One Up no longer exists.

Recap

As you have noticed with these tactics above, both MVNOs and major carriers companies will go out of their way to confuse the consumer. After all, they are businesses, and they want to make the highest amount of profit possible. Your best bet to combat these tactics is to keep up with the wireless industry news, review your cell phone bill constantly, and be thorough in your research.

We do provide many guides that are clearcut, so you'll be able to decide whether or not the carrier is right for you. Additionally, if you wish to save more on your cell phone bill then you should refer to our cell phone savings calculator. With the cell phone savings calculator, you can calculate how much you can save by selecting and switching to a different provider.

You should also head on over to our cell phone plan comparison tool, as you can explore the plans and prices you can afford with select carriers, so you can decide which carrier would be most suited for you.

The effects of confusing cell phone plans have risen prices in America for years. Users in the UK, however, pay significantly less each month. In this post, we investigate why.

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