One in Five Wireless Contract Cosumer to Switch to Prepaid

It appears that the decline in consumers committing to wireless contracts is still continuing. A study conducted by Infogroup for the New Millennium Research Council indicates that 20 percent of wireless customers (estimated to be about 24.6 million adults in the U.S.) will move to "less expensive unlimited prepaid wireless service with no early-cancellation penalty" at some point within the next six months.

Last year's study estimated the number at almost twenty percent.

The reasons for abandoning mobile phone contract offers? Well, its about cost. Most prepaid plans are cheaper than contract offerings.

Interestingly, 10 percent of respondents said they would switch to a prepaid plan if they weren't "subject to an early-cancellation penalty." his indicates that the infamous early termination fee or ETF for mobile phone contracts are successful in encouraging consumers to be faithful to their agreements.

So what can carriers do to keep their customers from switching to prepaid deals? Well, the study shows that unlimited talk, text, and Web or e-mail access for $50 a month with no penalty will do the trick.

Will this trend continue next year? Stay tuned as we bring you the latest news and updates on wireless contracts and related topics.

AT&T Settles In Class Action Suit Over Fees and Taxes

Here's some good news for Cingular/AT&T customers who paid for mobile internet services between November 1, 2005, and September 7, 2010. The carrier has decided to settle the conflict over collected taxes on mobile data plans.

The carrier was hit with a class action lawsuit filed over the improper collection of some taxes and fees. Apparently, AT&T collected the fees and taxes even after some states and local governments ceased requiring the payment of certain taxes on mobile data plans. Thus, a class action suit was filed.

The U.S. District Court for the Northern District of Illinois granted preliminary approval of the settlement on Aug. 11, 2010, and the carrier has requested the judge to issue a final approval of the settlement.

AT&T denied any wrongdoing in a statement to the folks at Phonescoop,

"AT&T Mobility collected only those taxes that we believed we were required to collect, and turned them over to the appropriate taxing bodies. We strongly deny any wrongdoing, and no court has found that AT&T Mobility committed any wrongdoing. However, we agreed to settle these cases to avoid the burden and cost of further litigation, and to facilitate any tax refunds that we may be able to obtain for our customers."

So what is the result of this settlement?

Well, AT&T will no longer charge some taxes and fees on data plans. The carrier will refund its customers from whatever monies are reimbursed by the state and local governments involved.

Do you think that you deserve a piece of this settlement? Consumers that take Data Connect Plans (wireless Internet on your PC), Smart-phone Data Features bolt-ons, smartphone data plans, iPhone data plans, personal Blackberry plans, or enterprise smartphone plans are all potentially included in the settlement.

That's it for this update. TUne in o more wireless contract related news and updates.

Cell Phone Contracts and Taxes

A cell phone bill contains information that can cause confusion among consumers. The taxes included in your bill are a good example of this especially for consumers who have recently transferred to another state.

Taxes and governmental fees are included in your bill. That's why your residential or business street address is very important because it allows a carrier to determine which jurisdiction's taxes and assessments to collect for you cell phone bill. This information is emphasized in your mobile phone contract.

On average American cell phone consumers are taxed 15.75 percent on every month's cell phone bill. This average percentage includes state and local taxes as well as federal taxes.

Now, calculating the cell phone tax that goes into your bill may not be accurate. This means that a carrier may be overcharging you. Of course, it may also mean that you are being charged less than the amount that you should be charged.

So how do you know that a carrier isn't over charging you with taxes?

Well, you need to know that you are paying for several cell phone taxes. Your bill includes the federal tax, which is about 5.05 percent of your phone bill a and is used to fund the Universal Service Fund.

Then there are state taxes and local taxes and fee. Some states also include a sales tax ands add fees for e911 service. Refer to MyWireless.org to get the average state and local tax rates for your residence.

You may contact your carrier if you feel that you are being overcharged with the taxes on your bill. It's the carrier's responsibility to charge you the correct tax based on your billing address. A refund is justified if a carrier is not applying the appropriate rates.

That's it for this pice of info on cell phone taxes. Tune in next week for more information on cell phone contracts and related topics.