Prepaid Reviews Blog » Consumer Issues

Would registering prepaid phone help deter crime?

Joe — Wed, 14 Apr 2010 12:30:09 +0000

In America, prepaid phones are notorious for their freewheeling nature. There are no contracts or credit checks, so customers can pick up one at a retail outlet, activate it, and use it for years with relative anonymity. This makes it convenient for users who might not have credit, but also makes it easy for criminals to abuse the privilege. We’ve seen proposals for how to curb this, but none of them seem close to reality. In Mexico, however, it’s a different story. Last year their government passed a law requiring prepaid phone users to register their accounts. This was a reaction to reports of prepaid phones aiding criminals. Will the U.S. follow?

Dawn Kawamoto at DailyFinance asks the same question in a recent article. She notes that a few states have tried to pass such legislation. It’s not as easy as just voting on a new law, though. There are logistical issues that could make such a system difficult. A number of states have seen this in effect when passing laws requiring prepaid users to pay 911 fees. There is still no mechanism in place to assess that fee for internet purchases.

These logistical issues will probably cause further delay in states adopting prepaid registration measures. Yet this doesn’t address the foremost question. Will registration make a significant impact on crime? I can’t answer that, but state legislators should look deeply into the matter before they consider any legislation. If inconveniencing millions of innocent users produces only a marginal effect, is that really worth it?

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Complaints to the BBB on the rise

Joe — Thu, 11 Mar 2010 13:55:54 +0000

If you look through the user reviews in our pay as you go cell phone pages, you’ll see that many people have had such poor experiences that they’ve taken their case to the Better Business Bureau. It’s tough to gauge a trend from those reviews, of course, because the overwhelming majority of people write them to vent about bad experiences. But it does appear that complaints to the BBB are up from last year. While the banking sector saw the largest increase, the wireless industry also saw more customers submit complaints, up 2.1 percent from 2008. Thankfully, the cell phone industry does solve their complaints, at least to the satisfaction of the BBB, at a 97.4 percent rate. I still think that submitting a complaint to the FCC can be more effective in many cases.

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What to do with your old prepaid phones

Joe — Thu, 18 Feb 2010 13:30:02 +0000

Though I don’t have any hard statistics on the subject, I’m willing to bet that prepaid users change phones far more often than postpaid users. Most prepaid carriers carry a line of cheap phones, and since there is no contract the customer is free to change phones more frequently than the two-year period afforded by postpaid carriers. Additionally, because the phones are typically old and outdated, they might not last as long as newer phones. The problem with frequently changing phones is the disposal process. We know we’re not supposed to toss them in the trash, but the question remains of the best way to rid yourself of that old phone. Here are a couple of options.

Chances are, your old prepaid phone isn’t worth much money. It might not be worth a penny, even. But, just in case, you might want to check out Gazelle.com. They buy used electronics, and you can ship it to them for free. The most common prepaid phone might be the Motorola RAZR. If you have a V3M model that actually works, is free of water damage, is in good condition, and includes the AC adapter and the battery, you can get $6. If you have, say, the Samsung R451C from Net10, they’ll pay you $21, if it’s in the same condition as the RAZR mentioned above.

If your phone has no more value, Gazelle might still take it for recycling purposes. That gets it out of your hands, which is the whole point anyway. Unfortunately, you might have to pay them a bit for this service. Per their FAQ: “Shipping is always free, as long as you are sending at least one item that we are paying you for.” Since they’re not paying you for the recycled item, you’ll probably have to put up the shipping cost — though that might be worth it for some in order to get rid of old phones.

There are other recycling services, however, that might pay the shipping bill for you. Cell Phones for Soldiers allows you to print out a pre-paid postage label, though they do note that donators can help even more by paying their own shipping. The company then sells the phones in bulk to recyclers, using the proceeds to purchase calling cards for soldiers overseas. Cell Phone Bank helps provide 911-enabled phones to law enforcement agencies. They also provide a pre-paid shipping label.

Those are just a few ways to get rid of your phone. All are better than letting them sit in a draw, or worse, in a landfill.

This post originated at PrepaidReviews.com - The number one resource for Tracfone Prepaid information on the web!

States moving to charge 911 fees for prepaid users

Joe — Mon, 15 Feb 2010 13:30:54 +0000

At the start of this year, Louisiana began imposing a new tax on prepaid card purchases to cover 911 fees. This has been a topic of debate among state legislatures for the past few years. As the number of prepaid cell phone users grows, they more concerned they are with collecting proper 911 fees. Louisiana’s implementation has its flaws — for one, it doesn’t cover online purchases. These logistical issues aren’t stopping lawmakers in other states from trying to impose them as well. Recently, we heard of two more states, one of which ruled on the issue late last week.

The Nebraska Supreme Court ruled that Tracfone just collect 911 fees from their users, according to the AP. Apparently Nebraska allows for three methods of collection, though the article does not state them specifically. It doesn’t sound like it will be along the same lines as Louisiana, though. The language of the article suggests that Tracfone itself will have to collect the fees, while in Louisiana retailers bear the burden.

In Virginia, lawmakers are currently debating how to implement 911 fee collection. The carriers themselves are currently responsible, but because most prepaid phone transactions take place outside a corporate cell phone store — usually a convenience store or big box retailer — the carriers feel that they should not be the ones collecting. As in Louisiana, they want the burden to be on the retailers. The Virginia Retail Merchants Association, of course, opposes this shift in responsibility.

Again, all of these implementations ignore online purchases, which are currently 911-fee-free. It is the trickiest, of course, because websites would then have to charge different fees for different states. And then there’s the whole issue of enforcing the fee from third-party online retailers. This is no easy issue, but there seems to be some momentum behind the cause.

This post originated at PrepaidReviews.com - The number one resource for Tracfone Prepaid information on the web!

Buy virtual goods with your STi prepaid top-up card

Joe — Thu, 11 Feb 2010 16:00:35 +0000

We’re seeing more and more e-commerce these days, which many consider a universal good. But what about for people who can’t get a credit card? Despite its growing popularity in the general population, prepaid wireless is still the only alternative for people with poor credit. How can they buy goods online, then, without a credit card? Zeus Research might have the answer. They’re going to use STi Mobile prepaid cards to power these purchases. Customers can find STi prepaid refill cards at over 200,000 U.S. retail oulets, and they can purchase them with cash. If implemented at the right sites — ones that don’t offer cards of their own — it could be a big advancement for e-commerce.

This post originated at PrepaidReviews.com - The number one resource for Tracfone Prepaid information on the web!

Prepaid users receive more calls than they make

Joe — Wed, 10 Feb 2010 13:30:57 +0000

When it comes to studies and surveys, I’m always a bit skeptical about the accuracy. People lie, even when they don’t know it. And then there’s the ever-present sampling issue. This particular survey, however, took data straight from cell phone calls, so it would appear a bit more reliable. The claim: postpaid users are more likely to call you back than prepaid users. We know that postpaid, in general, use their phones more heavily. True to that, they call an average of 5.41 people to a prepaid user’s 3.41, and make 10 times as many calls. But the claim about postpaid users being more likely to call back is a new one.

According to the study, prepaid users receive more calls than they make, while with postpaid it’s the other way around — though hedged with “most active postpaid users,” since clearly not all postpaid users can make more calls than they receive. Furthermore, 25 percent of prepaid users have relationships where one party makes more than 80 percent of the calls. Presumably it’s the non-prepaid user of the relationship.

How do we explain this? Prepaid plans that include unlimited incoming calls are a start. The linked article provides a further hypothesis.

So what’s the difference between prepaid and postpaid callers? One of the most important is probably that prepaid users are much more likely to be young people. And sociologists already know that relationships between young people tend not to be equally reciprocated.

A few years ago, the National Longitudinal Study of Adolescent Health asked US students to name up to five of their best friends. Between them, the students named 7,000 individuals but only 35 percent of the nominations were reciprocated. So perhaps it’s not suprising that a similar picture emerges from the study of mobile phone calls.

So…do you receive more calls than you place?

Via Gizmodo.

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MetroPCS accused of violating New York consumer protection laws

Joe — Tue, 15 Dec 2009 13:45:10 +0000

We don’t normally hear about class action lawsuits against wireless carriers. That’s because they stick mandatory arbitration clauses in their contracts. This says that you cannot bring a class action suit against the carrier, but must instead agree to arbitration over disputes. Sometimes a class sneaks through, but it’s not common. MetroPCS now faces on in New York over their unlimited international calling plan. The suit accuses them of using “bait and switch/deceptive trade practices.”

MetroPCS launched their $5 unlimited international calling plan in June, and it seemed too good to be true. Not long afterward, Justin Brennan, business director for Boost Mobile questioned the plan, noting that, “We really have seen some seemingly impossible offers like this come from MetroPCS before and what happens is they disappear very quickly, which make it seem that it is too good to be true.”

In advertising the international plan, the suit alleges, MetroPCS did not make clear its limitations. Certain countries — the United Kingdom and Israel included — do not fall under the plan. Had Metro made this clear, the members of this class supposedly would not have purchased the plan. They seek reimbursement for the international calls they made out of pocket, after having thought they could make the calls under Metro’s program, and to bar MetroPCS from chargin for international calls.

This post originated at PrepaidReviews.com - The number one resource for Tracfone Prepaid information on the web!

Louisiana adds fee to prepaid wireless purchases

Joe — Mon, 07 Dec 2009 13:30:46 +0000

If prepaid wireless users benefit from 911 services, shouldn’t they pay into them? Legislators in many states have debated the issue, and most think that something must be done. Louisiana is the first state to act on the prepaid 911 issue. Starting January first, retailers will collect a 911 fee at the point of sale. This money will then go to local districts as additional 911 revenue.

The fee, which is two percent of refill card purchases, will bring Louisiana an estimated $3.9 million per year in revenue. Postpaid wireless and landline users already pay a version of the fee, but with a dwindling number of landlines, the prepaid 911 tax will help replace some of those funds. It also means that people who use the service also pay into it.

“Basically, you had a segment that was using service but was not helping to pay for it,” said Bill Vincent, director of the Lafayette Parish Communications District. “This law closes that loophole.”

The fee goes into effect on January 1.

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AT&T customers not satisfied with service

Joe — Wed, 02 Dec 2009 14:03:27 +0000

A few times every year we get a Consumer Reports or JD Power and Associates survey regarding consumer satisfaction with the wireless industry. The Consumer Reports one just came out, and ranked AT&T as the worst among carriers. In general, it found that only 54 percent were “completely or very satisfied” with their cell service. Two thirds of respondents had a major complaint about their carrier. This seems like par for the course in the wireless industry.

Browsing through the user reviews of our featured pay as you go cell phone carriers, the lack of customer satisfaction is no surprise. Though the Consumer Reports survey dealt mainly with postpaid service, we know that the poor customer care practices extend into prepaid — and for some companies prepaid is much worse in that regard. Which is strange, because the Consumer Reports crew found mostly happy prepaid customers.

The sampling was small, but Consumer Reports found that Tracfone had the highest satisfaction score. It goes to show the polarizing nature of Tracfone. Some absolutely love it for its convenience, but others hate it for its poor customer support. Because the sample was small, I’m sure that most of the people surveyed never ran into a big problem with their Tracfone service. If they did and had to deal with customer service, perhaps they wouldn’t have been as satisfied.

T-Mobile, Verizon, and Virgin Mobile also graded out well among prepaid carriers.

This post originated at PrepaidReviews.com - The number one resource for Tracfone Prepaid information on the web!

How far should Congress go in stopping prepaid phone traffickers?

Joe — Wed, 28 Oct 2009 12:30:05 +0000

One prevalent issue among prepaid cellular providers is of traffickers. We’ve discussed this at length on Prepaid Reviews, but for a two-sentence re-hash: Many prepaid providers subsidize boxed handsets, like the ones you’d find at Wal-Mart, so more customers can buy the phones. The companies hope to make the money back when the customer purchases minutes, but that plan is thwarted by traffickers who purchase subsidized handsets in bulk, unlock them, and then sell them at a market rate. Prepaid companies lose big, and so they’ve helped propose the Wireless Prepaid Access Enforcement Act of 2009. There’s a lot to it, and Jennifer Granick of Electronic Frontier Foundation has the analysis.

The legislation appears to extend beyond mass traffickers. In other words, while one clause of the legislation would make expressly illegal the purchase of prepaid handsets with the intent to resell or redistribute, another would likely bar any kind of unlocking. Per the bill, it would be illegal for someone who

knowingly purchases and/or handles one or more wireless prepaid access devices for the purpose of, or as part of a scheme involving, modifying, removing, avoiding or overwriting installed software which is designed to cause any such device to operate as a wireless prepaid access device on the wireless network or networks for which such device was sold, unless such purchase or handling is authorized by the wireless service provider or device manufacturer

That describes the process of unlocking. I understand why carriers would want this. While they’re not losing tons of money like they are on mass unlockers, they’re still losing money when someone buys a single handset and then unlocks the phone. For instance, someone can purchase a Virgin Mobile phone from Target for far less than retail value. Virgin expects the customer to make up for the phone subsidy by purchasing minutes, but the customer can instantly go flash the phone to MetroPCS. Virgin is then out the difference between the purchase price and the cost of the phone.

Because the bill would make the act of unlocking a prepaid phone expressly illegal, that would foist the investigation and prosecution costs on government entities (police, FBI, Justice Department). That means a heavier burden on taxpayers. That burden will no longer fall on the shoulders of the prepaid companies. That does seem like one of the less fair aspects of this bill. If companies want to protect their interests, it should be on their dime, not on the taxpayers’.

It would seem that this bill, then would doubly burden American citizens. It would not only prohibit them from unlocking handsets if they are unhappy with a provider’s service, but it would also move the costs of prosecuting these newly defined crimes from the companies to the taxpayers. There might be balance somewhere in this issue, but it appears that it will not be found in the current legislative proposal.

This post originated at PrepaidReviews.com - The number one resource for Tracfone Prepaid information on the web!