Bundled bills may contain costly traps

SAN FRANCISCO (10/8/07)—If you're trying to save money by bundling your phone, Internet, and cable all in one bill, be on the lookout for costly traps (Consumer Action News Fall 2007).

Despite the convenience of having one bill for all three services, Consumer Action, a nonprofit advocacy and education organization based in San Francisco, recommends caution before you sign a contract for this type of bundled service:

• Watch for time-limited offers. If the package lasts only for three months to one year, the advertised low price may jump 20% or more after the promotion ends. Ask what the price will be when the initial pricing ends.
• Find out if the advertised price is good where you live. If the high-speed Internet service isn't accessible in your neighborhood, don't sign up.
• Find out what happens if you terminate the contract early. Some companies charge an early termination fee up to $250.
• Ask about limitations on long-distance minutes. Some companies offer packages that limit direct-dial calls from your home to 100 minutes a month. Know your calling pattern before signing up for any bundled package that has limitations on minutes. Ask what the rate will be if you go over the limit.
• Read the fine print. Are there restrictions in the contract? For example, if you need to switch just one service in the bundle, will you lose the deal on all the other accompanying services? Also, make sure you understand all the fees and equipment charges on top of the bundle's advertised price.
• Know your customer service options. If you have problems with more than one service in the bundle, will you need to call more than one repair person—and make more than one appointment?
• Be on the lookout for "change of terms" notices. For example, a company may send you a notice telling you that in return for service you need to settle disputes using binding mandatory arbitration instead of the courts. That notice may include a 30-day window for you to opt out of arbitration agreements. If you don't opt out, you give up your right to sue the company in court for any claim of negligence, fraud, or intentional wrongdoing.

For more information, read "State Consumer Protection Agencies Look Out for Your Best Interest" and "Arbitration Clause Denies You Your Day in Court" in Home & Family Finance Resource Center.

courtesy of cuna.org