Americans Overpay $336 a Year on Wireless Bills Due to Plan Confusion

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A surprising new study from BillShrink reveals that users pay an extra $79 million each year due to people choosing the wrong plans because they don’t accurately assess voice, text and data usage

BillShrink, the popular money-saving search engine, today announces the result of a survey of more than a quarter of a million wireless users that shows that on average, people waste $336 per year by miscalculating their use of voice minutes, texts and data.

BillShrink’s study found that people are more likely to overestimate their anytime minutes and texts, but underestimate their data usage. Consumers are therefore purchasing wireless plans that don’t actually fit their needs and in doing so, are giving an estimated extra $79 million to wireless companies each year.

This discrepancy likely stems from opaque bills, where vague fees get buried within utilization breakdowns. In an effort to give consumers more choices, national wireless carriers like AT&T, T-Mobile and Verizon recently rolled out tiered-pricing based on usage. However, as data usage continues to grow, so do the amount of plan options, making it increasingly important for cell phone users to know how much they actually use their phones.

“Despite the best efforts from the FCC and the carriers to create transparency in wireless fees, we’ve found that people are becoming even more confused about how to right-size their cell phone plans,” said Schwark Satyavolu, co-founder and CEO of BillShrink. “While tiered pricing creates more choice, it makes it paramount for people to accurately assess their phone usage. Even though data usage is surging, the majority of wireless customers are still throwing away money by getting plans with too much data capacity.”

From December 2009 to December 2010, BillShrink studied more than 230,000 individuals seeking advice on wireless plans. BillShrink compared actual wireless usage analyzed from actual bills versus people’s estimated cell phone use to reveal the following key findings:

Wireless utilization is on the rise; data use soars (analysis of 24,000 actual wireless bills)

  •     Anytime minutes increased by 229% over the last year (from 193 minutes in 2009 to 634 minutes in 2010)
  •     Text message usage increased by 170% over the last year (from 660 messages in 2009 to 1782 messages in 2010)
  •     Data usage increased by 94% over the last year (from 64 MB in 2009 to 124 MB in 2010)

People waste hundreds each year due to incorrect wireless usage estimates

Overestimate Voice and Text

  •     People estimate that they need 711 wireless anytime minutes per month, but in actuality, the average person uses 651 anytime minutes per month.
  •     People estimate that they use an average of 2,566 text messages a month. However, the average person uses 1,555 text messages a month.

Underestimate Data

  •     People assume that they need 54MB of data per month, but they are actually using 81MB, which is still considerably less than current tiered data options which start at 150 MB.

About BillShrink
Since BillShrink’s launch in 2008, the company has helped 1.5 million Americans save more than $1 billion by delivering personalized money-saving recommendations on their most common household bills.

In an era when eight out of ten people overpay on their everyday bills, BillShrink sorts through millions of products and services – a billion cable and satellite packages, 10 million cell phone plan combinations and 150,000 gas stations – to provide unbiased recommendations so users can get exactly what they need at the best price.

With the launch of StatementRewards℠, BillShrink brings the power and breadth of its money-saving platform directly to users within their online bank statements. BillShrink is working with the country’s leading merchants and financial institutions so that users can now receive and customize money-saving offers from their favorite merchants and service providers directly within their credit card statement.
BillShrink was listed among the “Top 20 Best Money Websites” by Money Magazine and named one of the “Best Web Sites” by Kiplinger’s. The company has been featured in the country’s leading news sources including The Wall Street Journal, The New York Times, American Banker, Consumer Reports, Fortune, The Dr. Oz Show, The Today Show, CNN, ABC and CBS. The company publishes the popular “Shrinkage is Good” blog, which features commentary on the latest economic news and savings tips.

BillShrink is headquartered in Redwood City, California. For more information, please visit http://www.billshrink.com/corp.

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Matt Mirandi

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