Dialing For Savings
It sounds like an easy way to lower your long distance bill. Do an end-run around your regular long distance carrier. Just dial a few extra digits and start counting the savings. But is it worth the effort? How can you tell?
CBS This Morning Consumer Correspondent Herb Weisbaum has some answers.
The ads are mighty impressive. But will dialing seven more numbers really lower your long distance bill? The fact is, there's no guarantee that a dial around means a discount.
How can that be? - the ads promise such enormous savings.
Just because an ad promises a low rate doesn't mean that's what you'll wind up paying. Dial around companies compare their charges to the basic rates of the big long distance carriers. And basic rates are the highest rates. If you're on any kind of special calling plan, you're already paying less than the basic rate. So, your dial around savings would be less than what's shown in the ads. You might even wind up paying more than you currently pay.
How will I know for sure what I'll pay if I use one of these dial around services?
To figure out the true cost, you have to read the fine print. For example:
- The Lucky Dog Phone Company promises calls for just ten cents a minute, but there's a connection fee of ten cents a call. That means a one minute call isn't ten cents - it's double that.
- Use the Dime Line and you might expect to pay 10 cents a minute. But the Dime Line has a 3-minute minimum. So all your calls don't cost a dime a minute - the one and two minute calls are thirty cents.
- In its ads, America One offers nine cents a minute. But once again, there's a catch. To get that low rate you'll need to talk for at least 223 minutes a month. That's more than three and a half hours! Talk less than that and the rate jumps to 15 cents a minute. When you do the math, here's how it breaks down:
Talk for 223 minutes and you'll get the 9 cents a minute rate: total bill $20.07. Talk for just 1 minute less, and you'll pay 15 cents a minute for a total of $33.30 That's a $13 penalty.
Are there any other catches I should know about?
A few other potential pitfalls to watch for include the following:
- In some cases, the low advertised rate doesn't start until you've been on the phone for ten minutes.
- Some companies charge a monthly access fee. You'll pay that $4 or $5 fee even if you only make one call that month.
Is all this confusing? You bet it is, which is why people are complaining and the feds are starting to investigate. The Federal Trade Commission and the Federal Communications Commission want to know if some of these ads are deceptive. The dial around services insist they are not.
What do the regular long distance companies like AT&T and MCI think about this competition?
AT&T and MCI have responded by starting their own dial arounds. ThLucky Dog Phone Company, for instance, is owned by AT&T. 10-10-321 is part of MCI, although you wouldn't know that from the ads.
So after all your research, what's the bottom line - to dial around or not to dial around?
The first thing you should do is make sure you're on a good calling plan based on the type and amount of long distance calls you make. Believe it or not, most American families are still on the basic rate plan with its higher prices. Once you're sure you're getting the best deal you can from your regular provider, you can comparison shop the dial arounds. But be sure to read all of that fine print! Odds are you'll find the extra dialing won't save you much, if anything.
By Herb Weisbaum
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