CUB: You're wasting money on some mobile phone plans

If you haven't looked at your wireless phone bill lately, take a good look right now. You just might be spending an average of $359 too much every year.

The Citizens Utility Board, a consumer watchdog group, said Monday that consumers are overpaying on their mobile phone bills due to unnoticed errors or other billing issues.

CUB issued a report called “Dodging The Wireless Industry's Pitfalls to alert consumers to problems that cost users of CUB's free online comparison service an average of $359 extra per year.

Culprits include paying for extras like insurance, directory assistance or even roadside assistance, which CUB Executive Director David Kolata said are a waste.

“And paying for minutes that are not used has become an epidemic, Kolata said during an interview.

CUB's report comes after Verizon Wireless admitted last week that it had erroneously overcharged customers, reportedly by about $90 million, although the company didn't confirm the amount.

Kolata said the study doesn't say if one service provider is worse than another, but instead focuses on educating consumers. For example, downloads of ringtones may show a higher price on the bill compared to the cost originally quoted. Free nights and weekends sometimes aren't, and carrying a high number of rollover minutes is a waste, Kolata said.

The report said these were the biggest money wasters:

Wasted minutes: Cell-phone callers are paying for too many minutes they simply don't use. A free online CUB tool, the Cellphone Saver, analyzes individual consumers' actual usage and can identify better calling plans among the top five carriers. The Cellphone Saver is available at www.citizensutilityboard.org/cellphonesaver.html.

Billing errors: Consumers should scan their bills for any fees that have been erroneously added, or intentionally added through a growing scam called “cramming.

Insurance: Out of 11,921 lines that were analyzed, 19 percent had insurance at a cost of $5.49 per month, or $66 a year. Such protection is often so limited that unless a customer has a very expensive phone with all the bells and whistles, it's not worth the price tag, CUB said.

Directory assistance: More than 1,000 Cellphone Saver users paid an average of $3.88 per month each for directory assistance even though free services are readily available, including (800) GOOG-411, (800) Info-Fast, and (800) FREE-411.

Roadside assistance: CUB's Cellphone Saver found that hundreds of people were paying for roadside assistance charges, at a cost of about $3 per line. Many people may be surprised to learn that the wireless industry has peddled emergency assistance for car problems.

Verizon spokeswoman Carolyn Schamberger said the company appreciates CUB's effort to educate consumers about wireless usage. “Verizon Wireless has a long, pro-consumer track record and offers several tools to help customers manage their wireless usage and avoid unexpected higher bills, she said.

Kolata believes service providers should offer rewards programs to provide consumers a chance to recoup some rollover minutes. He said a U.S. Cellular rewards program, introduced last week, was encouraging.

The CUB report is useful to consumers because most people don't know how to estimate how many minutes they might use in the future, said Greg Brewster, associate professor of telecommunications at DePaul University in Chicago. So once they sign a two-year contract, they feel it's impossible to do anything about it.

“It becomes a fixed cost, Brewster said. “I agree with CUB. Consumers need to examine their bills each month, because most people don't take that very basic step.

The report analyzed results from August 2009 through July 2010 through the CUB Cellphone Saver.

The service allows consumers to upload an online copy of their wireless bills from AT&T, Verizon, Sprint, T-Mobile and U.S. Cellular and within seconds see a report showing them how to cut their costs.