Abolish-OveragesFollowing a number of new initiatives launched last week including its new Simple Starter plan and new perks for tablet users, T-Mobile issued a press release today calling for an end to overages and urging consumers to sign a petition for AT&T, Sprint and Verizon to do the same.

Traditional wireless plans start with a low monthly fee for a fixed amount of domestic minutes, texts or data.  Once consumers go over those limits – even by a little – they’re hit with dramatically higher rates and extreme penalties.  These plans seem purpose-built to drive customers over that invisible line into massive overage charges.

In the press release, the carrier noted it will end all domestic overages in starting in May for the June billing cycle (something we thought it was doing since the beginning of Uncarrier?). The wording also sounds a lot like it could continue to charge overages for international use.  T-Mobile’s new Simple Starter plan does not include the free international perks it unveiled for other plans last year, so it looks like the carrier is giving itself some room to continue charging overages for international use in some cases.

T-Mobile has been doing a lot of talking about ending overages, and its approach might be slightly more transparent than the other guys, but at the end of the day an overage is an overage and even T-Mobile charges some customers for more data. It’s new Simple Starter plan for example which caps at 500MB for LTE data, will force users to purchase $5/day or $10/week “additional data sessions.”

The company’s full press release is below.

T-Mobile Abolishes Consumer Overages,

Challenges Other Wireless Providers to Follow Suit

Legere Starts Petition for Consumers to Call on AT&T, Verizon and Sprint to End Overages 

BELLEVUE, Wash. – April 14, 2014 – T-Mobile US, Inc. (NYSE: TMUS) today shifted the national conversation on wireless to a new level, unveiling its latest Un-carrier move – a campaign to eliminate overage penalties, one of the most reviled wireless industry practices. While abolishing overages for all customers on T-Mobile consumer plans, its CEO has also laid down a challenge to the nation’s largest carriers, AT&T, Verizon and Sprint, to do the same.

More than 20 million Americans were hit with punitive overage charges in 2013. And these penalties from the three largest U.S. carriers take more than an incredible $1 billion out of consumers’ pockets every year.

“Today I’m laying down a challenge to AT&T, Verizon and Sprint to join T-Mobile in ending these outrageous overage penalties for all consumers – because it’s the right thing to do,” said John Legere, president and CEO of T-Mobile. “Overage fees are flat out wrong. Agree with me? Join me in putting this challenge to all the major national carriers by signing my petition on Change.org. Right here. Take one minute to be a part of this consumer movement.”

Last year, T-Mobile banished annual service contracts and began phasing out overage charges with the launch of Simple Choice.  T-Mobile’s stance against annual service contracts is now well known by consumers, and today it’s taking on the even more unpopular and unjustified practice of slamming consumers with surprise bills in the form of overages charges.

“Charging overage fees is a greedy, predatory practice that needs to go,” continued Legere. “Starting in May for bills arriving in June – regardless of whether you’re on Simple Choice, Simple Starter or an older plan, we’re abolishing overages for good. Period.”

Traditional carriers’ entry-level plans lure customers in with a low monthly fee for a fixed amount of domestic minutes, texts or data. Once consumers go over those limits – even by a little – they’re hit with much higher rates, often dramatically higher.  These plans are purpose-built to drive customers over that invisible line into massive overage charges. The result has been a culture of fear, worry and surprise every time the wireless bill arrives. For example, an individual on AT&Ts entry-level plan, advertised at $45 per month, will pay $125 if he uses just the average amount of data for a U.S. smartphone user (1.5 GB per person).

“The worst thing about these overage fees is that they’re often inflicted on those who can least afford them,” added Legere. “As an advocate for consumers, we’re putting a stop to that. I personally won’t be satisfied until we obliterate this shameful practice from the entire wireless industry.”

To give a voice to U.S. wireless consumers, Legere has started an online petition at Change.org/AbolishOverages calling on AT&T, Verizon and Sprint to end overages. You are invited to sign the petition and add your voice to the growing movement to rid the wireless industry of domestic overages once and for all.

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11 Responses to “T-Mobile says it will end domestic overages in May, petitions AT&T, Sprint, & Verizon to do the same”

  1. Good move by Mr Legere, he is well-wishers of all consumers.

  2. wait … maybe i misread that.. did they say “It’s new Simple Starter plan for example which caps at 500MB for LTE data, will force users to purchase $5/day or $10/week “additional data sessions.””

    i would rather pay $10 extra a month for 1 gig then $10 a week… what is 500MB a song, a tweet and some googling?

  3. Winski says:

    Rock on John… MORE shaking up the clunky approach to how carriers treat their customers is a welcome thing…

  4. mikhailt says:

    I don’t think the author here knows what overage means.

    > but at the end of the day an overage is an overage and even T-Mobile charges some customers for more data. It’s new Simple Starter plan for example which caps at 500MB for LTE data, will force users to purchase $5/day or $10/week “additional data sessions.”

    Yes, but that’s not an overage fee, please learn the difference before going off on a rant.

    Overage fees kicks in when you go over the limit without any hard lock-out. In other words, if you’re still using data after you used up the 2GB limit.

    It is not an overage fee when you hit the limit and cannot do anything more. In other words, you hit 2GB, you cannot use anymore.

    The latter is the right way to approach this in the industry, the former is just a greedy practice intended to get money.

  5. I find it curious that T-Mobile, the “Uncarrier”, decided to fire a shot across AT&T’s bow when AT&T’s prepay no-contract service AIO Wireless offers a 500MB plan with NO cutoff for $40, instead falling back to “up to 2G speeds” (whatever that means) for the remainder of the 30-day period and allowing the customer to buy a 1GB up-to-30-day “block” for $10. http://www.aiowireless.com/shop/plans.html

    So T-Mobile is already getting outmaneuvered by AT&T.

    And the Simple Choice plan just doesn’t make much financial sense, doing the math; the $5/$10 data blocks are just ridiculously priced considering customers can simply go up to the $50 plan which then supports “unlimited” throttled data beyond 1GB. I don’t think someone was thinking clearly when devising this plan. A misstep on T-mobile’s part, IMHO…unfortunate.

    • mikhailt says:

      Not a misstep, just smart marketing on T-Mobile. They’re not any less shady than the big three carriers.

      They still need to make money off this and one of the best ways is to have more people. So, by bashing on the big three carriers, T-Mobile can pick up more folks, even though the savings are not that big of a deal for many people.

  6. If I read this correctly, it says that Tmobiles currently charging the 5 dollars a day, 10 a week as of now. It’s going to change in a few months when they end the over charges. So how will they end the over charges? They stop your service until the next pay period. They do it now with there Hotspot data. Once you go over, you have to wait to use it again or update your plan. There’s even a button to press on the hotspot limit message that takes you straight to a page where you can update.

  7. fredhstein says:

    Slightly off topic, but dang. Apple gets hauled into court for eBook and for kids in-App purchases. (Re in-App, Apple had already started their own aggressive reimbursement program). Both cases combined (one time events) were less than 1/2 the $1B mentioned above.

    But real whammy is that the penalties are there to up-sell the higher cap plans. This incremental cost likely exceeds the $1B annually in penalties. (Just my guess)

  8. RK Soni says:

    AT&T, Verizon and Sprint customer are victims of overage charges, If all carriers agrees to T-Mo’s appeal, AT&T customer will be more beneficial………………………telecomvibe(dot)com

  9. RK Soni says:

    Overages of two major carriers are very high, If all carriers agrees to T-Mo’s appeal, AT&T customer will be more beneficial………………………www.telecomvibe.com