Deciphering Your Phone Bill

Woman talks on cell phone
So as it turns out, talk isn't cheap.

Not only that, it's certainly more expensive than advertised. Phone companies consistently make claims such as, "You can make as many calls as you want for one low monthly price, starting at $24.99."

But as CBS News Correspondent Mark Strassmann reports, these ads never mention all the added fees and taxes, which pile up one after the other. They can jack up your monthly bill as much as 20 percent.

"It ends up being fifteen or twenty dollars more with all these taxes and surcharges, and this and that," said Brandy Brown, a cellular phone user.

Consumer groups complain these companies often unfairly pass on routine business expenses by calling them a "tax" or a "fee".

"Someone might assume that carrier costs recovery fees are related to government surcharges, when in fact they're an invention of the carrier," said Rich Sayers, a Consumer Advocate.

Now a group representing 42 state consumer advocates has petitioned the FCC to ban the surcharges, calling them "deceptive and misleading".

CBS's Strassman asked an industry spokesman if such charges are fair to consumers. The response: "Oh, absolutely."

John Walls speaks for the wireless industry, which maintains the fees are a necessary evil.

"The carriers certainly don't like them, they don't like being the collection agency for the government," Walls said.

In fact, some of these charges are legitimate taxes, and do go to the government. But others are fees these companies charge simply because they can.

Look at your bill. You'd have to be a genius to figure it out. Or, so you'd think. Strassman asked Mike Siegler of Mensa, the "brainiac" club with a minimum-IQ requirement to join.

But even he says: "I haven't got a clue."

The "regulatory recovery fees," for example, range from 99 cents to almost $3 dollars. The companies say that's to recover costs of interstate access charges, regulatory compliance, even to pay for property taxes.

And as far as taxes go, the "Federal Excise Tax," 3 percent of your phone bill, went into effect in 1898 to help pay for the Spanish-American War.

Teddy Rosevelt would tell you that war's bills were paid in full a long time ago.

But the tax goes on, as just one fee among many that leaves phone customers at a loss for words every month.