Some ‘Free’ Downloads Can Cost a Pretty Penny

That Soulja Boy "Tell Em" ringtone you just added to your phone lets your friends know you’re cool. And because the Internet site where you found it said it was a free download, you may think it shows that you’re thrifty, too.

But was it really free? Or is Dad going to tan your hide when he finds a $9.99 charge on the family cellular bill?

Ads on TV, radio and the Internet regularly tout no-charge downloads of some of the hottest ringtones. However, as some wireless customers — many of them parents of teenagers — have found, some of those "free" downloads are anything but.

A wide array of third-party providers offer ringtones and other content to cellular customers, relying on wireless carriers such as AT&T Inc., Verizon Wireless and SprintNextel Corp. to do the billing. While some are legitimate, experts warn that others lure customers with free offers, then sock them with recurring monthly charges of $10 or more for services ranging from ringtones and wallpapers to horoscopes and news alerts.

"What you can do with your wireless handset is becoming a lot more like what you can do with your computer on the Internet," said Roger Entner, senior vice president for IAG Research’s communications sector. "But that also means it’s becoming more like the bad side of the Internet. You have to be careful what you download."

Florida Attorney General Bill McCollum last week announced it had reached a multimillion-dollar settlement with San Antonio-based AT&T after investigating complaints about third-party providers for which the phone giant does billing. AT&T agreed to issue customer refunds, to pay $3 million to fund a fraud task force and to pay for a consumer education campaign.

McCollum’s office confirmed that it also has opened similar investigations into Verizon, Sprint, Alltel Corp. and T-Mobile USA.

AT&T spokesman Marty Richter said the company already has implemented numerous safeguards to protect consumers from unauthorized charges. The company, for example, gives two separate prompts letting a customer know they could be billed for content before they can start a download. It also allows parents to switch off download capabilities on their kids’ phones.

"Our advice always has been to treat this stuff the way you would treat anything you download from the Internet," Richter added. "Be cautious." Verizon said it also has taken precautions to protect customers. Among other measures, it places a cap on what third-party providers can charge monthly, and it has terminated relationships with companies that used deceptive advertising.

"It’s clear that plenty of our customers want content other than what we offer," said Jeffrey Nelson, a Verizon spokesman. "You want to make those customers happy by letting them access a broader range of things. At the same time, you also have to be able to protect them from shady stuff. You don’t want them to get hosed out of $20 a month just because they downloaded a single ringtone." The carriers’ improved safeguards have taken a dent out of the abuse, analysts said.

Two years ago, customers disputed as many as 40 percent of third-party charges with their cell phone companies, said Vikrant Gandhi, wireless analyst for Frost & Sullivan. Thanks in large part to better monitoring by the carriers, he said, that number has dropped to the single digits.

But analysts said cellular content is poised to boom as carriers open their handsets to more services and as more consumers feel comfortable downloading audio, video and games to their phones.

"The carriers are doing a better job of monitoring, but there will be some pressure as we see this explosion of content," Gandhi said.

So, what do you do if you find a charge on your bill for content you thought was free?

Richter said AT&T usually removes disputed charges from third-party content providers if it receives a customer complaint. As part of its Florida settlement, the company also agreed to make third-party charges more clearly identifiable on its bills.

"Frankly, the way we usually find out about these problems is from our customers," Verizon’s Nelson said. "If you think there’s something wrong, we want to know about it."

HOW TO AVOID UNEXPECTED CHARGES:

–Be wary of content not provided directly by your carrier.

–Read the fine print. Some services tout free ringtones but have a monthly subscription rate.

–Use your cellular provider’s parental controls to limit kids’ access to content.

–Monitor your bill for third-party charges.

–If you end up with a third-party charge you think is erroneous, bring it up with your carrier.

Source: Wireless carriers, wireless analysts