Phone BillPaid your phone bill lately?

Apparently not enough customers are paying on time, if you ask the phone companies. It turns out three of the top four collection accounts based on the number of bills submitted to third-party collection agencies are from major telephone carriers -- AT&T (T), Sprint (S), and T-Mobile (DT) -- according to the recent Debt Report from Bills.com.

It's easy to see why. According to an iYogi Insights report released this month, 63% of U.S. households surveyed said they spend 35% more on technology bills than utility bills.

The High Cost of Keeping the Phone On

iYogi found mobile phones top the chart on these monthly expenditures. Households spend an average of $94 a month for their mobile services, like data plans for smartphones, and an additional $19 to download games, music, movies, and the like.

Add to that bill another $20 to $180 per month for Internet service provider bills, which usually come by way of a telephone carrier or cable company.

Between the smartphone and ISP expenses, consumers can find themselves owing roughly $300 to their telephone carrier each month to keep the lines of communication open.

In these tough economic times, it's natural that some consumers are skipping phone payments due to a lack of funds. But others are cutting the cord -- to bolt to another carrier before their two-year contract is up or switch to a prepaid disposable phone -- and simply failing to settle the existing bill with the carrier they left, says Brad Stroh, co-founder and chief executive of Bills.com.

"Consumers' attitudes are different with their cell phones," Stroh says. "Many of them don't realize they still owe money if they leave their contract before it's up, or they don't think it'll hurt their credit rating. The telephone companies also report to the credit rating agencies and this can impact [consumers] for a long time." And while the size of a delinquent phone bill is usually much less than a student loan or credit card balance due, it's a black mark on your record, nonetheless.

Phone Business Is Booming for Bill Collectors

Stroh says phone companies are quick to send a delinquent customer's bill to an outside collection agency. "A credit card company is dealing with larger amounts, so it makes sense for them to handle collections in-house for up to a six-month period before outsourcing," says Stroh, whose company tracks bills owed via its free consumer software tool Debt Coach.

Debt collectors, however, have a different view.

"Phone companies are not quicker than anyone else. There is a period of 90 days when debt is still in-house and they're trying to collect on their own," says Mark Schiffman, public affairs director of ACA International, the collections industry's largest trade group. "After 90 days, they begin to work with third-party collection agencies. I don't see anything that phone companies do that is faster than other companies trying to collect from a delinquent debt."

He noted that his organization, which is an association of credit and collection professionals, finds telecom, technology, and utility bills account for roughly 10% of the money represented in uncollected bills.

Don't Wait to Settle Up

Katie Ross, education and development manager for the American Consumer Credit Counseling organization, says phone companies may not be necessarily faster about sending bills to collections -- because they may not need to.

"In most instances, if consumers are late and get late notices, they are quick to make payment since their phones are now tied to much more than a phone service," Ross said in an email interview. "Social networking plays a huge part of this. Many companies now offer bundled services where you can get phone, cable, Internet, etc. Consumers can't resist the social world."

Regardless of how quickly a delinquent account gets sent to collections, she notes, it is wise to pay off the phone bill as quickly as possible.

Motley Fool contributor Dawn Kawamoto does not own any stock in the companies mentioned. However, she does own a smartphone and is among those families whose technology bill is larger than their utility bill.





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104 Comments

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A.G. SESKIS

RESEARCH 1ST !! .......ASK MORE QUESTIONS ,...READ THE " FINE PRINT " ...VIEW YOUR BILL AS SOON AS YOU GET IT, AND BITCH ABOUT IT EARLY , COPY / SEND / AND DEMAND HIGHER MANAGEMENT FOR RESOLUTION,....
Simple as that ,...if you havent researched hard enough ,..and you dont like the outcome ,...who`s fault it it ??????
Also ,..if you couldnt afford it when you signed up ,.....again ,...who`s fault is it ??
Pull your head out 1st , cry 2nd,....think about whether you really needed it , 3rd,......live within your MEANS 4th ,.....and if you lose it ,...you didnt need it , 5th. Just shows your stupid ,....6th !!
Everyone knows how much of a " SCAM " the wireless companies are , and Verizon DOESNT even pay FEDERAL TAXES !! , companies like this are NOT helping our debt problem !! Do you think their high profits care about whether YOU are getting a good deal from them on your plan ???
Point is ,...research 1st ,....weight the pros and cons ,...if you dont like what you see,....DONT BUY INTO IT !! Simple,....there ARE many other choices ,...do some homework, pic the best for you ,...and STAND UP / SPEAK OUT AGAINST THE BS !!! DONT fall to a victim of it !!! Dont get tied into any 1 company, just because you may get a discount through the company you work for ,...dont get hooked on bs,......improper billing practices has been around ALOT longer than any of these internet / cell phone companies have !!
RESEARCH ,. RESEARCH 1ST !!!
thanks for reading

February 01 2012 at 5:38 AM Report abuse rate up rate down Reply
Rae Lynn

In February 2011 we upgraded from AT&T DSL internet & landline to U-Verse. The upgrade included internet, landline &TV. That is ALL that I ordered. The first billing was correct. The fees on the second billing had doubled. When I called for a correction to the billing I was told that I had violated my contract on the FOUR services I had ordered by canceling the cell phone service and returning the phones. I explained that I DID NOT order AT&T cell phone service and never had possession of one of their cell phones. I have had Verizon for 20 years. The customer service rep. insisted that I had canceled the cell phone service (the service that I had never ordered) therefore I lost the promotional pricing on the other 3 services. It took me 3 months to clear up the error and countless hours on the phone.

February 01 2012 at 12:05 AM Report abuse rate up rate down Reply
Rae Lynn

Phone companies are the worst offenders regarding billing errors: line slamming, charges that appear from third-parties that were never ordered, not following through on special promotions, etc. EACH time that I have transferred, renewed, upgraded or cancelled a service with AT&T, I can count on a billing error. I document EVERYTHING with name, date and time; keep all of my notes and keep screen shots of online promotions. Also, when I met my husband, he was in a dispute with Sprint. It had been ongoing for 2 years and they turned him over to collection. I did some research and wrote to the attorney general of our state and of the state where the collection agency did business, with a copy to Sprint. Apparently, there is a code attached to all customer orders and phone activity that those in the business can decipher. Service providers use it when they communicate with one another and all in-house customer logs and service activity on an account will display this code. The more I dug into this, the more apparent it became that I could use this "code" that no one discusses outside the industry, to prove that Sprint had failed to activate a long distance block that my husband had requested on his phone. Once I was armed with this information, Sprint's demand for $400.00 and the collection activity disappeared.

January 31 2012 at 11:31 PM Report abuse +2 rate up rate down Reply
azizalsaqr

I had MCI over 12 years ago for long distance, I canceled my service, and paid what was due, for some reason the service was never removed from my line and since I had never used it, I refused to pay the bill they claimed I still owed. MCI attached the debt to my local phone carrier bill, I still refused to pay it, and told them why, the bill was removed, but, I was "banned" from having long distance attached to my land-line, despite two changes to the ownership of the company, I still cannot get this ban lifted. I override it by having a low minute cell that I use only for long distance calls, but, it still sucks.

January 31 2012 at 10:54 PM Report abuse +2 rate up rate down Reply
hunter1rd

We are an auditing service for business's We audit phone bills, for errors. We FIND THEM ALL THE TIME!!!
The phone company , and electric companies use errors to bouy their botom line.
Check out our web site WWW.NationalUtilitiesRefund.com

January 31 2012 at 10:53 PM Report abuse +1 rate up rate down Reply
chromesst

I could never imagine paying $94/month for a cell phone. I am 27 years old so it's not like I am some old dude who is stuck in the past and doesn't know how to use the current technology. It just baffles me to see these people who can't go more than 10minutes without looking at their phone to check facebook, twitter, e-mail, text some random person to tell them how tired they are, check what time it is in Beijing etc. etc. I also don't understand why young people have land lines at their home and a smart phone. It makes no sense to have a land line if you cell phone is attached to the side of your head anyways. Any who, if you can't afford a $94 a month cell phone bill then you shouldn't be using a $500 phone and bailing on your responsibilities. Use the phone less so you can downgrade you plan and save money, then you can pay your bill every month and not become a government leech who drains hardworking Americans tax dollars because you are scum.

January 31 2012 at 10:29 PM Report abuse -2 rate up rate down Reply
2 replies to chromesst's comment
adam646l

I am some old dude who is NOT stuck in the past. I know well how to use current teccnology. You sound like an idiot when you make such ignorant comments. Not only can "old dudes" use the technology, most of us can well AFFORD to pay for it. You sound like the child of republicans who spew the garbage he hears at home without a thought of your own. People fall on hard times. This does NOT make them scum. I am one of the one percenters. I can well afford anything I fancy. I find you particularly offensive and ignorant.

January 31 2012 at 10:42 PM Report abuse +1 rate up rate down Reply
nuclearboy2020

chromesst, Please don't say anything else every time you do you show how dumb you are

February 01 2012 at 1:44 AM Report abuse +1 rate up rate down Reply
me817

Any company can report a delinquency to the credit reporting agencies and there is nothing you can do about it. It doesn't have to be true or it could be a mistake or maybe they didn't send the bill. Makes no difference. You, my friend are now equal to an indentured servant in the early 1800's. This is America in 2012. You have no real rights.

January 31 2012 at 10:18 PM Report abuse +1 rate up rate down Reply
1 reply to me817's comment
GOODDOC1

You have a right to dispute any claims on your credit report. Even if the information is not changed, at least your side of the story will be available for all who see your credit report to know.

February 01 2012 at 12:03 AM Report abuse +1 rate up rate down Reply
Susan

I tried to have DSL and phone service installed by AT&T for my developmentally disabled sister. They screwed up the installation three times with no-shows and false information, and finally, I cancelled it because they clearly didn't even have service in the neighborhood, and we had a cable service installed in 3 days. 6 months later? They had sent to a collection agency. I've given them proof over and over again, with names, dates, etc. They say ' thank you' and then, a few months later, they hand off to ANOTHER collection agency. These people are nothing but dirtbags - and I 'm talking about AT&T as well as the collection agencies.

I pay AT&T with my business, personal and cell a total of around $600 per month, and yet they are treating me on another account like a dirtbag?????

These people were on the most hated companies in the US list a few weeks ago and I can certainly see why.

January 31 2012 at 8:48 PM Report abuse +2 rate up rate down Reply
2 replies to Susan's comment
adam646l

I personally refuse to do usiness with AT&T. I wouldn't take their services for free. They have zero sense of pride in their product and no customer service skills whatsoever. I would rather pay more to their competitors. Nobody has ever treated me as poorly as AT&T has treated me.

January 31 2012 at 10:46 PM Report abuse +2 rate up rate down Reply
m

I went through a similar situation with those morons after 23 years as a good customer. I had returned a modem that they kept charging me for after closing my account with them, and then sent a bill to a collection agency within 45 days of closing the account. They had repeatedly assured me that the matter was handled. I even had the ups tracking# that they provided! I would not take free service from these lying leeches. I finally paid them just to get them off my back even though I did not owe the money! I despise AT&T. They are the most despicable scum company on earth.

September 06 2012 at 3:45 PM Report abuse rate up rate down Reply
ladysongbird43

This is an outright lie. I moved and shut off my old number on Oct 10, 2011. I got my bill on Dec 11, 2011 stating I had until Jan 10, 2011 to pay. However within one week of receiving the bill I got a letter from a Collection Agency for the $36.66 I owed AT&T. Even after I paid AT&T I still got a letter from the Collection Agency saying I didn't honor committment to pay. I had told hem I was calling AT&T to find out why they reported this so quickly.

Anyways all cleared, but NO WAY did AT&T even wait 90 days before submitting to a Collection Service.

I had cancelled my AT&T servivce and went to Comcast for my Internet and phone.

I had been with AT&T for 15 years with no disconnects - no unpaid bills.

That is how AT&T treats loyal customers.

January 31 2012 at 8:42 PM Report abuse +2 rate up rate down Reply
buykat

We're being haunted by an old Verizon bill that wasn't even OURS. I remember getting a call one day several years ago by a bill collector asking for my husband. They were talking about a Verizon bill and I informed them that we had NEVER had an account with Verizon. Interestingly, they had my husband's SS number...but the address wasn't ours. My thought was that they looked up the name on the credit reporting agencies and assumed it was him so they had his SS number. The conversation ended with them thanking me and going away. Three years later we went to refinance our mortgage and, guess what....a "charge off" from Verizon!!!! It only took one call to get it cleared up (or so I thought, since the refi went thru without a hitch). Fast forward to three months ago. We are purchasing a NEW home post retirement....guess what...the charge off is gone....but the address where we never lived that Verizon reported is STILL there. We were lucky in that our credit rating was high enough and we're old enough to be "trustworthy" so the bank was happy with a letter from me telling them that we never lived at that address....but REALLY?????

January 31 2012 at 7:30 PM Report abuse +3 rate up rate down Reply
1 reply to buykat's comment
xenia1631

interestingly someone did that with sprint to my husband sounds like someone got ahold of your husbands ss number and used it for god knows what. might want to get ahold of his credit reports and make sure nothing else fishy is on them

January 31 2012 at 8:23 PM Report abuse +1 rate up rate down Reply