Do I Have to Pay the Surcharges on My Cell Phone Bill?

Cell phones provide convenience and security for users, but at a price. Besides the standard usage charges on cell phone bill, most cell phone service providers also add surcharges. Tax Foundation reports that in 2020, taxes, fees and surcharges jumped to an all-time high of ​22.6 percent​ of a customer's total cell phone bill, and unless there's been a mistake on the part of the cell phone company, you must pay them.

When you sign up for a cell phone agreement, you likely sign a service contract that explains the service provider's terms. Even if you select a contract-free service provider, a sales representative might require you to sign a service agreement that indicates your understanding of the service terms, including billing terms, before starting your service. These documents include important information about cell phone rates and surcharges. They also create a legal requirement for you to pay the charges you incur when using the phone.

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Cell phone surcharges take several forms. Some are for exceeding your plan limits, such as talk minutes, data limits for browsing the mobile Internet and text message allotments. Other surcharges include state, local and federal taxes. Local municipalities also place surcharges on cell phone bills to support the 911 emergency service in your home area. Your initial cell phone bill might also include one-time surcharges, such as an activation fee.

Check your cell phone carrier's website for a list of all possible surcharges. For example, Sprint's list of possible surcharges includes an administrative charge, regulatory charge, gross receipts recovery tax, state and local taxes, 911 charges, federal and state Universal Service Fund assessment and certain state-specific charges, such as an electronic waste recycling fee.

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In some cases, a cell phone service provider will add incorrect surcharges to a customer's bill. This can occur, for example, if the provider charges you taxes and fees from a different location than where you currently live and use the phone. You must report any moves to the cell phone service provider.

If you change your account type or port an existing number to a new account, an administrative error might result in the wrong surcharges on your bill. If this occurs, you are not responsible for the surcharges, but you'll need to resolve the issue with your service provider before your payment due date passes and you incur a late-payment fee or have your service suspended.

Except for cases of administrative error, you are responsible for paying the surcharges that come with your cell phone, just as you're responsible for the basic cost of service. If you refuse to pay your bill in full, your service provider can assess a late fee, cancel your service, charge an early-termination fee (if you have a long-term contract) and send your account to a collections agency.

If you have trouble paying your bill or don't understand a surcharge, contact your cell phone service provider's customer service department to get an explanation. Before signing up for a cell phone, read the service agreement carefully and know your local tax rates to predict your monthly surcharges.

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