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Businesses The Almighty Buck Verizon Wireless Networking

Verizon Backtracks On $2 Convenience Fee 281

Velcroman1 writes with a followup to yesterday's news that Verizon would be implementing a $2 'convenience fee' for certain online and phone-based bill payments. In addition to dealing with outrage from customers, Verizon also felt resistance from the Federal Communications Commission, who decided they would investigate the matter. Today, in a brief press release, Verizon announced that they've canceled their plans for the new fee in response to customer feedback.
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Verizon Backtracks On $2 Convenience Fee

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  • by Anonymous Coward on Friday December 30, 2011 @04:44PM (#38542644)

    That charge you for the privilege of paying your damn bill! GAHHHH!!!!!

    • by Anonymous Coward on Friday December 30, 2011 @04:46PM (#38542664)

      Really it was just a thinly veiled attempt to force customers onto their auto-pay system because if you switched to auto-pay they waived the fee.

      • That what my Gas company does, they go though a 3rd party to pay online, but if you auto-pay you don't get charged the 3rd party fee....
        • Re: (Score:3, Informative)

          by Anonymous Coward

          For all the furor over Verizon, there are multitudes of companies (Kentucky Utilities, BOA, my local water company, etc.) that do this.

          Worse, they frequently don't give a sufficient grace period to pay the bill without accruing late fees (especially if you travel on short notice a lot), so you are left with either paying that or for the honor of paying by phone.

          Of course, they don't offer automatic bill pay through your credit card (only complete access to your bank account will do), and have even been told

          • and have even been told by a Bank of America representative that it is illegal to pay a debt with a credit card (WTF!?) as the reason they don't offer automatic bill pay with a credit card, but will happily charge you $25 for paying by phone.

            If we had a decent government, any time something like this happened, there'd be a giant penalty for a company representative giving false legal advice (i.e., $100k fine for company, 1 year in jail for employee).

            For all the furor over Verizon, there are multitudes of co

      • by antifoidulus ( 807088 ) on Friday December 30, 2011 @06:20PM (#38543590) Homepage Journal
        Yeah, which gives them plenty of opportunities to gouge you with either erroneous fees or overages that they hope you will not notice. That was the real motivation.
      • by Renraku ( 518261 ) on Friday December 30, 2011 @11:10PM (#38545670) Homepage

        Auto-pay is hilarious. All my friends have had trouble with it but continue to use it. "Oops, my mistake!" they say after they plunder your bank account for $500 because they billed it multiple times. "Here's your $500 back, less the bill you owed..and you're still in the red because your bank hit you with a couple of overdraft charges!"

    • by jhoegl ( 638955 )
      Yeah, I was going to leave them if they actually did this. Because there are 3 other large providers out there, thanks to Verizon being vocal about reduced competition :)
      • Just a thought, but I was under the impression that charging a fee for accepting a credit card for purchases was illegal. I guess some grinning show off at Verizon found a loop hole. Calling it a "convenience fee?" Go figure.
        • Just a thought, but I was under the impression that charging a fee for accepting a credit card for purchases was illegal.

          From what I understand, you are permitted to charge a fee for a credit transaction but only if it is a flat fee not based on the transaction amount. Around my location it is very common for places to charge $0.35 for a debit/credit transaction.

          • by mysidia ( 191772 ) * on Friday December 30, 2011 @05:59PM (#38543404)

            you are permitted to charge a fee for a credit transaction

            You can charge lots of fees, but you may not charge a fee for using a credit card, or you would be in violation of Visa and Mastercard guidelines, and subject to losing your privilege of processing MC/Visa, if your violation were reported by your customers:

            From Mastercard credit card acceptance guidelines [fivecentnickel.com]

            Charges to cardholders. A merchant may not directly or indirectly require a cardholder to pay a surcharge or any part of the merchant processing fees charged in connection with a transaction. However, fees are allowable if they are charged regardless of the form of the payment, and merchants can provide a cash discount.

            Minimum/maximum transaction amount prohibited. A merchant may not require, or indicate that it requires, a minimum or maximum transaction amount in order to accept a valid and properly presented MasterCard.

            • Umm....you didn't read your quoted section entirely. If I am a vendor and only accept credit and cash, I charge everyone the same amount, and give a cash discount. I have thus just charged a credit fee.
            • It seems you're correct. If that's the case, there are literally hundreds of convenience stores and gas stations around here that are violating their merchant agreements. Maybe I ought to make a weekend event out of reporting as many of them as I can to VISA...
              • by Fnord666 ( 889225 ) on Friday December 30, 2011 @07:09PM (#38543990) Journal

                It seems you're correct. If that's the case, there are literally hundreds of convenience stores and gas stations around here that are violating their merchant agreements. Maybe I ought to make a weekend event out of reporting as many of them as I can to VISA...

                I ask the merchant if they are allowed to charge a % fee for using a credit card. When they say that they can, get them to itemize it on the bill of sale. Once you have that, dispute the fee with your credit card company and get them to reverse that part of the transaction. Worked every time so far.

              • by EdIII ( 1114411 )

                It's a completely illegal practice as far as the contracts are concerned, but wide spread. Ethnic store owners are the biggest violators. Every time I went down to China Town, the Korean markets, Mexican grocery stores, .etc, the signs were (still are) prominently displayed. $10-$15 minimum for credit and $1.50 for the transaction.

                In fact, I view it as a sign of an upcoming bubble that will burst with the credit card debt that more ethnic store owners even accept credit in the first place. 9/10 places I

                • The idea of credit is bullshit to most Chinese people I know and they think it is crazy to rack up debt like that. It's a cultural thing. Why does VISA get 3% of my revenue (not profit) just for being there? Fuck that shit. Cash mother fuckers. Cash. I am paraphrasing a friend who owns a tea shop.

                  Cash is also great when you're trying to hide income from the IRS. Not saying that your friends are trying to cheat the government, but it's certainly much easier when there is no paper trail. A family acquaintance owns a few laundromats and has openly bragged to us about how easy it is to funnel money out of there without anyone knowing anything because it's completely cash-based.

                  Maybe they're bullshitting, maybe not...just repeating what I was told.

                  • by EdIII ( 1114411 )

                    Well it can be easier to hide income from the IRS with cash. However, you have to track your commodities and collect state sales tax too. If you review your consumption of commodities it is not that hard to see a massive discrepancy in cash revenue declared versus what should be received. In a situation like that your margin for profit on undeclared revenue is pretty small if you want to remain reasonably safe against an uncomfortable audit.

                    Laundromats could be easier since customers bring in their own s

              • The new financial reform bill makes it legal to charge up to a $10 fee for any method of payment. They can also do cash/check discounts. Basically, it ensures this is legal such that retailers can set fees/discounts to ensure they aren't losing money on certain low-value transactions. Also, by now being able to set fees for one brand of card differently from another, it fosters some competition. So we might see higher fees on visa/mastercard than debit for example.

            • However, it's perfectly legitimate to charge a "convenience fee". The way a convenience fee works is that Visa/MasterCard/Amex charge the discount fee (usually about 2%) to the cardholder, instead of the merchant. The fee shows up separately on the statement, and it means the merchant gets 100% of what they intended to charge you. Really scummy if you ask me, and only really used by governments and phone companies (the two stingiest classes of business on the planet).

            • The recent financial reform bill explicitly made it legal to charge different fees on different methods. For example, having different fees for visa and american express cards. The financial reform bill overrules whatever you find in the guidelines produced by the credit card companies. That said, I believe your source is dated prior to the new law coming into effect.

          • Yep, I've seen this too. Arco gas stations, for instance, charge you a "convenience fee" if you pay by card, but not if you pay by cash.

        • by jhoegl ( 638955 )
          Yeah, I thought that too when I first heard the story.
          But then realized who actually makes the laws... /sad
        • Why would it be illegal? Provided that the charge is disclosed up front.

          It's been ages since it's been the case, but I recall back in the early '90s where most computer shops around here would give a 3% cash discount for people that paid by cash or check.

          • Why would it be illegal? Provided that the charge is disclosed up front.

            It's been ages since it's been the case, but I recall back in the early '90s where most computer shops around here would give a 3% cash discount for people that paid by cash or check.

            It's not illegal, but it most likely violates the merchant's agreement with Visa. Visa takes this very seriously since they want their card to be exactly the same as cash. They come down on merchants that do this and can even cancel their merchant account number if Visa gets a couple of complaints. Losing the ability to accept credit cards can really hurt a business.

    • by speculatrix ( 678524 ) on Friday December 30, 2011 @06:09PM (#38543490)
      Dear Verizon,
      From 1st January I will be charging you for $2 for reading the bills you send me and making the payments on time, this is a convenience fee to you as it means you will not have to chase me for late payment.

      I am also charging you a fee of $10 for writing this letter to inform you of the change. If you wish to call me and discuss it, I will charge $50 per hour for the discussion, or $30 for reading any letters you send and replying to them.

      love
      a customer
      • You mean your utilities don't give you a 10% discount for paying before the due date? Wow, that is crap!

  • by greyline ( 1052440 ) on Friday December 30, 2011 @04:45PM (#38542656)
    They may have backtracked on this "convenience fee", but Verizon will still get their $2 from their customers, just not as obviously.
  • great (Score:5, Funny)

    by larry bagina ( 561269 ) on Friday December 30, 2011 @04:46PM (#38542660) Journal
    I have not canceled my offer for them to lick my asshole.
  • And... (Score:5, Informative)

    by Pharmboy ( 216950 ) on Friday December 30, 2011 @04:46PM (#38542668) Journal

    ...they will no doubt try to make themselves looks a hero for not screwing us over by adding that charge. Yes, us. I was already looking at other carriers, only for the principle of charging us more for costing them less.

    This is as bad as when the phone company charged $4 a month for "touch tone service" when it actually costs them less to provide it than to deal with pulse dialing.

    • Re:And... (Score:5, Informative)

      by Obfuscant ( 592200 ) on Friday December 30, 2011 @05:11PM (#38542922)

      This is as bad as when the phone company charged $4 a month for "touch tone service" when it actually costs them less to provide it than to deal with pulse dialing.

      Back when this was a regular charge, it did cost more to provide touch tone dialing. They had to add the DTMF-to-pulse decoders to existing systems. About the time that the old step-by-step hardware was replaced by something more modern (crossbar) and the pulse decoding became the more expensive part, the special charge for DTMF was removed.

      • Re:And... (Score:4, Informative)

        by quacking duck ( 607555 ) on Friday December 30, 2011 @06:17PM (#38543562)

        Not in Canada, where Bell still charges about $4 for touchtone service. My parents are grandfathered into a plan without this fee (they dial out pulse, and can then switch to touchtone if they have menus to navigate), but for all new traditional landline connections it's a non-optional fee.

        Just another reason I ditched my landline when I finally got a cell phone.

    • "It seems we lost 100,000 customers after we announced we weren't going to charge the $2. I guess they really wanted to pay us $2 more. Reinstate the fees!"
    • In the 80's as a kid I used to wonder why leaded gas was cheaper than unleaded, when leaded gas was the stuff that had extra processing done to it. Shouldn't the less-processed product be the cheaper product?
      • In the 80's as a kid I used to wonder why leaded gas was cheaper than unleaded, when leaded gas was the stuff that had extra processing done to it.

        The difference is more than just whether tetraethyl lead was added or not. Leading reduced preignition (aka dieseling) so higher compression ratios could be used in engines. Unleaded gas needed either a different additive to reduce this, or a different mix so it had a lower octane rating. If you simply removed lead from the gas you used and kept the rest the same, your engine was likely to run rough or not stop when you turned it off.

        In addition, the economy of scale applied. If everyone is using leaded g

    • This is as bad as when the phone company charged $4 a month for "touch tone service" when it actually costs them less to provide it than to deal with pulse dialing.

      I always thought it was more egregious for them to charge for NOT listing your number, rather than for listing it. When asked, reps always gave some lame excuse, like it costs money to flag to remove the listing entry...

      The modern day equivalent would be getting charged $0.10 or more to send SMS text msgs, which costs the carrier nothing. Or being charged to fetch your voicemail even though M2M calls (within network calls) are free. Or Sprint's lovely policy of forcing you to sign a 2 year contract even if

      • Stop right there... text messages do not cost the carrier nothing. The carrier needs to maintain SMSC infrastructure, carrier interconnect agreements, billing infrastructure, and no doubt government enforced interception infrastructure. None of these things costs $0.00 to maintain, so claiming that it costs the carrier nothing is flat out bullshit. One could (quite rightly) argue that the cost of text messages is way too high, but there's always bundles that reduce the cost of messages down to the less t

  • It seems like the FCC is the only government agency making any decisions/taking any actions that i actually agree with these days =P
  • Saw This Coming (Score:5, Insightful)

    by kaellinn18 ( 707759 ) on Friday December 30, 2011 @04:49PM (#38542694) Homepage Journal
    When are these idiots going to realize that bullshit charges like this aren't going to fly anymore? First Bank of America with their ridiculous ATM card fee and now Verizon with this. Consumers are finally waking up, and they're tired of what basically amounts to theft.
    • Re:Saw This Coming (Score:4, Interesting)

      by AthanasiusKircher ( 1333179 ) on Friday December 30, 2011 @05:32PM (#38543142)

      When are these idiots going to realize that bullshit charges like this aren't going to fly anymore? [snip] Consumers are finally waking up, and they're tired of what basically amounts to theft.

      Sort of. The thing is, most businesses bury such excess charges within general service fees anyway, if they feel like they want to make more money and are confident that enough people will pay for it. The "theft" will often happen anyway: it will just be buried in a general service fee rather than enumerated separately.

      These itemized fees can go both ways. It depends on how many people want or use the itemized fee item. For example, for a long time, credit card companies were happy to charge ridiculous fees for people who were delinquent, along with other random penalty fees, as well as apply huge rate penalties, etc. Thanks to Congress last year, their ability to do this is much more limited. And thus my low fixed-rate credit cards went away, because their profits from me were no longer subsidized by the delinquents. (Not that I ever carried a balance anyway....)

      For another example, people in my town seem, for the most part, to approve of the fact that the city makes over 1/3 of its budget from street-cleaning fines, because it uses an algorithm for setting street-cleaning dates that most people have trouble remembering. They could just bundle the city budget in local taxes instead, but they choose to make it off of forgetful people instead. Personally, I think it's more than a little immoral to charge more for tickets for obstructing a street cleaner than for actual hazardous parking activity (like, for example, parking too close to an intersection, and until a few years ago, parking too close to a fire hydrant), but maybe that's just me. (If there are any street cleaning fanatic defenders out there, be aware that last year due to a change in service, the street cleaners NEVER came by during the appropriate marked ticketing hours for a period of over six months... only later on the appointed days. My neighborhood suffered no unseemly build-up of detritus during this period at all.)

      On the other hand, the change to an itemized fee-based structure for food on airlines seems a reasonable thing to me, particularly for short and mid-length flights where you don't necessarily need to eat a real meal. I'd prefer to have the choice of paying for a $10 crappy meal or not (and bringing my own if necessary), rather than having it bundled into the cost of my flight even if it's terrible. (I'd be even happier if the TSA would let me bring in whatever food and drink I want, rather than being forced to pay the airport premium for a lot of it.)

      Anyhow, my experience is that consumers are actually rather accepting of such miscellaneous fees and fines, as long as they don't tend to apply to them very often. Companies (and governments) therefore often choose them over blanket fee increases. But even though many of them may be evil or immoral, I don't see a grand consumer effort to get rid of most of them... because a lot of people often benefit from them (as I used to benefit in my credit card rates).

      • Since you never carry a balance anyway (good), your interest rate is irrelevant.

        • Irrelevant to me. Not irrelevant to one family member and a friend who did carry (significant) balances on their cards. Their interest rates went up too, and they went from a situation where they could manage their debt and pay it back to one that wasn't really sustainable... all to save money for the folks who were truly delinquent.
    • Seriously.

      Americans are very worried about their income and at the same time prices are going up everywhere. It isn't the time to stick it to your customers with another fee and not risk losing them.

  • Similarities? (Score:2, Informative)

    by nikomen ( 774068 )
    This may be slightly off-topic, but don't some Satellite/Cable companies do similar things? I seem to recall a particular provider charging $5/month if you didn't sign up for auto-pay and/or paperless billing. The reason was that they wanted to save trees. However, the same nameless provider would send mailers at least a couple times a month if you canceled their service, thereby negating the the "tree savings." Seems like Verizon and other companies are just trying to make another buck by taking advanta
    • This may be slightly off-topic, but don't some Satellite/Cable companies do similar things?

      Can't speak for everyone but the local cable company here, MediaCon: It's free to pay online, but whaddayaknow, the online payment system is perpetually broken - so you have to call in anyway, at which point they inform you there's a $5 fee for paying over the phone.

      I've gotten to where I just deliver the payment to their office in person; that way I at least get to bitch to a fellow American instead of "Bob" in Nagpur, India.

  • by kawabago ( 551139 ) on Friday December 30, 2011 @04:56PM (#38542768)
    The entire phone system is wrong. Phone companies should be coming to consumers with ever cheaper prices for more bandwidth. Instead they keep finding ways to charge more for less. It is time for people to take control of their data needs and put cities in charge of data infrastructure just as they are for water and sewage. The phone companies could bid to manage cities data infrastructure within the limits set out by the people. This would put people back in control of their own infrastructure and take away the phone companies ability to over charge for service.
    • This would put people back in control of their own infrastructure and take away the phone companies ability to over charge for service.

      And allow the governments to overcharge for service.

      You mention water and sewage as an example. Where I live, add on a "runoff fee" to deal with that stuff called "rain" that falls from the sky and isn't absorbed by the ground under your house. And a fee to fix the roads. And a fee to trim trees. And a fee to fix sidewalks. And a fee for the bus system.

      Phone bills? The local paper has a story today about a proposal to add a fee to the phone bill to pay for improving passenger rail service. Even if you ne

      • by amiga3D ( 567632 )

        The idiots where I live don't think they pay nearly enough taxes. Every single fucking time there is a tax initiative on the local ballot they run to the poll to vote for it. I don't get it. The last one passed by over 80 percent and yet everyone I talk to bitches about taxes but they still vote for more. "Oh, we need that!" they say and I say well quit bitching about taxes moron since you're the reason for them. But they just look confused. I hate living in an idiocracy.

    • Do you have any idea how much it costs to run a wireless company?

      Just how many campaigns you have to 'contribute' to..
      How many local politicians you have to promise 'jobs' to just to get tax breaks on your call centers.. (for 4 years, when you close up and move to a new location)..
      Don't forget marketing.. Because a really great service and price don't sell themselves...

      Don't forget.. you have to subsidize those phone costs.. and arrange kickbacks (err, agreements) to put certain software on the smartphones

  • From The Washington Post [washingtonpost.com]:

    Payment processors for power companies usually charge “convenience fees” of up to $5 for every payment made by phone or online, but cellphone companies haven’t taken the step yet. The furor against Verizon hints that they may have to wait further.

    So, for now, you can continue to earn airline miles at Verizon's expense.

    • by dgatwood ( 11270 )

      And yet I can't think of anyone else other than government agencies that do this. Accepting electronic transfers is simply part of the cost of doing business in the modern age, and companies that refuse to accept that will get left behind.

      The only reason the power companies and government agencies can get away with it is that no competition is possible. And even they may succumb to public pressure before too much longer.

  • by Nadaka ( 224565 ) on Friday December 30, 2011 @05:00PM (#38542808)

    Netflix, bank of america, Verizon, godaddy, etc. Is 2011 year of the corporate fuck up? Is it that corporations are making more boneheaded mistakes? Or is it that people are not willing to tolerate these boneheaded anti-customer mistakes anymore?

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      You'll find 2012 to be much, much worse for the corporations. To answer your question: it is, of course, a combination of both. Corporate arrogance and greed reached a critical mass where they felt more and more like they could get away with anything. This caused them to make numerous mistakes. The consumer is becoming increasingly aware of how they are getting fucked over and are not tolerating it. There have always been people that are aware, but more and more people are becoming aware, so we have a

    • Be forced as part of basic?

      Under Comcast where I live, it isn't part of "basic". It is part of the lowest tier of digital service, but if you want no-frills cable, you don't get ESPN. You get must-carrys and shopping channels. And, for some reason I cannot fathom, Discovery. And one of the two Spanish channels (but not the other).

      As I recall, ESPN is part of the ABC family of channels, and you aren't going to push ESPN to become a pay service. It's going to be a "if you want any of X you take all of X" offer to the cable company fo

  • by Karmashock ( 2415832 ) on Friday December 30, 2011 @05:05PM (#38542864)

    Whenever you see companies treating customers like garbage it means they don't have enough competition. That's all Verizon is telling us here. They're saying "you've basically allowed telephone companies to operate as local monopolies and so as monopolists we don't have to compete for customers."...

    Simple as that. It's our own fault. If you don't like what they're doing then don't let them monopolize things anymore. Open up their area for more phone companies. Let other companies run telephone lines if they want in parallel. See if Verizon treats their customers poorly then... they'll be too terrified of losing them. As it should be...

    • Open up their area for more phone companies. Let other companies run telephone lines if they want in parallel. See if Verizon treats their customers poorly then... they'll be too terrified of losing them.

      Umm, Verizon is a CELLPHONE company. They have basically the same competition everywhere in the USA - AT&T, Sprint, T-Mobile....

      • That's Verizon Wireless.

        Verizon is a LANDLINE company. They own the phone lines on most of the east coast.

  • Suck it bitches!

    Honestly ANY company that charges for online payments is ran by scumbags. Complete and utter SCUMBAGS.

    It's cheaper for them to process an online payment than to hire someone to open an envelope and handle the check. They were just trying hard to be as evil as possible, A tradition at Verizon.

  • It was a right proper example of increasingly monopolistic corporations levying private taxes, too.
  • by ArchieBunker ( 132337 ) on Friday December 30, 2011 @05:15PM (#38543000)

    Years ago when the FUSF telecom fee expired (to pay for the 1898 Spanish American War) Verizon decided to introduce a new fee that somehow just randomly was the same value as the old federal fee. They backed down pretty quick once the feds got involved but for christ sakes like John Stewart said "BE A PERSON".

  • A la carte pricing is great. It lets me economize simply by changing behaviors. In this case, I can save $2 by using my bank's online bill pay.

    Now that they've changed their minds about this fee, you know they will find another way to charge us. That was never in doubt. But how they charge us might not be so obvious next time, and that means we may not be given the opportunity to save money.

    So are we really better off today than we were yesterday?

    • by dgatwood ( 11270 ) on Friday December 30, 2011 @05:38PM (#38543192) Homepage Journal

      Yes. This fee screws the people who can least afford it. People who pay their bill online or by phone on a one-off basis are usually the people who are struggling to pay that bill at all. By charging those folks an extra fee, Verizon basically said, "Screw the poor." To which I say, "Screw Verizon."

      Sure, those folks pose a higher risk of non-payment. That doesn't mean Verizon has the right to discriminate against them, and it certainly doesn't mean Verizon is justified in charging them extra fees that increase the risk of non-payment. They're basically starting to act like credit card companies, and need to be dealt with in the same way that we dealt with them—with harsh federal regulations that punish such behavior. It's really the only way to deal with companies that are so big that they feel unthreatened by competition.

      • by Ichijo ( 607641 )

        This fee screws the people who can least afford it.

        It also disproportionately benefits the poor. For you and me, $2 may not mean much, but for a person on a fixed income, saving $2 could make a real difference.

        Because you know without this fee, Verizon will find some other way to raise prices. And when they do, they may not be so obvious about it, and that means they may not give the poor that opportunity to save money.

  • From the press release...

    which was designed to improve the efficiency of those transactions.

    The fee was designed to increase the efficiency of the online transaction. I have to give them credit, I would never have the balls to say something like that, which is probably why it is a good thing that I am not in business.

  • Comment removed based on user account deletion
  • Add Verizon to the list of "Corporate Miscalculations of 2011"

    There Verizon will join GoDaddy, Netflix and Bank Of America.

    To all of the people who pull the dodge of saying people can't do anything remember these companies. They were all read to dick Americans over, without lube, until ordinary people stood up for themselves and forced them to backpedal.

    Hey Corporate America:
    In case you haven't figured it out yet Americans are feeling squeezed. On one side everyone is asking for more of their money and on

  • I pay the Verizon bill by having my bank, ESL, mail them a check. No fee from Verizon and all the convenience of on-line bill paying.
  • "I want my two dollars!"

  • Paul Christoforo of OceanMarketing.

  • Pretty soon we'll see $3 Online Service cost recovery fee.

    except named something more obscure.

    Or they could just quietly add a charge an extra $5 a month to everyone logging online to review their call history details, minutes or KBs of data used; waived for the first few months of service, so after your 60 day cool-off period for your new contract is done, the new charge begins to take effect.

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