Report: #275248

Complaint Review: OnStar - General Motors

  • Submitted: Tue, September 18, 2007
  • Updated: Thu, September 20, 2007
  • Reported By: Los Angeles California
  • OnStar - General Motors
    Troy, Michigan

OnStar - General Motors Onstar scam to "upgrade" phone service but will no longer allows you transfer of service! Troy Michigan

*Author of original report: Comments appreciated but there are two important points

*Consumer Comment: just to counter the statement mentioned

Show customers why they should trust your business over your competitors...

Since I bought my 2004 Cadillac new in 05' I complained to On-Star (owned and operated by General Motors) about the poor phone service, static, and dropped calls when using the factory installed On-Star phone service. Not only is the service unreliable as I have had numerous dropped calls (even when calling 911 or calling On-Star during an emergency) but they charge ridiculously high rates for phone service. On-Star has been installing analog phones up until recently. My complaints resulted in nothing tangible from On-Star. Now because th FCC is compelling cellular phone providers to provide only digital service, On-Star needs to replace phone equipment on all GM vehicles. They are not doing this because of all of the complaints they have had from consumers, but because of an FCC ruling

I received a letter from On-Star telling me I need to upgrade my phone equipment on my Cadillac for a small sum ($15.00) so it will be analog, but they also say that I need to renew my service. It's $400 a year if you want directions, phone, and emergency service. But they will no longer allow you to transfer this service to a new GM vehicle.

What this means is that if I buya new GM vehicle in 2008, the $400.00 I pay On-Star doesn't transfer to the new vehicle, AS IT USED TO! To me this is a rip-off. Only if you read the fine print on the back of the letter do you learn of this little trap which unsuspecting consumers could end up getting scammed.

Essentially I was told by Brian, a "supervisor" (after talking to three reps--three because two of my calls using the GM installed phone were dropped mid call) that if you pay to have the upgrade and renew your service you cannot transfer what you pay for to a new GM car you might buy in 2008.

On-Star uses a terrible carrier for phone service and they have known this for years but did nothing about it because they were making money as a third party vendor for the minutes which are prepaid. But when the FCC made its ruling that all cell services must be digital, this was a way for On-Star to essentially charge you to renew at full price (between $200 to $400 per year), but unlike in previous years, you cannot transfer the services to your new car. So if you renew with On-Star right now and need to have the phone equipment upgraded to digital, and then decide to get a new car in 08, General Motors/On-Star benefits, but you receive no service. then when you gt your new GM car you get three months free, but then have to pay again anywhere from $200-400 a year to have On-Star.

General Motors has been in serious financial trouble for sometime, and they own On-Star, but they have created no incentive for me to renew my service by refusing to allow consumer to transfer the service I would pay for to any new GM vehicle I might buy next year. To me this is bad business and the fact that they do not clearly and overtly disclose that the services you pay for are NO LONGER transferable then many buyers will be ripped off if they decide to renew and buy a new car sometime next year.

I buy a new car every three years since I drive so much because of my work. I doubt I will buy another GM product and it is highly unlikely I will renew with On-Star. If you plan to keep your GM car for several years then by all means pay the money for the upgrade on the equipment ($15.00) and renew, but if you plan to puchase a new GM vehicle or any vehicle equipped with On-Star, be warned that they will charge you for the service, but they will not allow you to transfer it to another GM car as they did up until recently.

No wonder GM is in the tank. These little things all add up and sooner or later, it will catch up. On-Star has known for years that the phone services was marginal at best and did nothing to resolve it. They charge a premium price for poor service and they make money because most consumers don't read the hidden or fine print.

I will buy a Thomas Guide or another road map for $30.00 rather then pay these people $400.00 which they will not let me transfer to a new car....which is really stupid since they should do whatever they can to keep current customers happy so they will keep buying GM and On-Star services.

Beware of On-Star because they charge too much for phone minutes, the communication equipment is unreliable, and they will charge you money for services you cannot transfer to another On-Star equipped vehicle. That was a promise made to me by the salesman and by On-Star, but I guess since they are broke they cannot afford to keep their promises anymore.

I will look at another car company perhaps because you cannot depend on GM or On-Star--especially when your calls get dropped when calling for help. I guess I will never do one of those stupid radio commercials I hear all the time when the lady locks her baby in the car. She was lucky...her call got through.

Los Angeles, California

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#1 Author of original report

Comments appreciated but there are two important points

AUTHOR: Scott - (U.S.A.)

1. I use the on-star phone to make and take calls while driving. It is much safer than using a handheld device and more comfortable than wearing an ear piece. The phone service is NOT intended exclusively for emergency purposes. Hands free calling is mentioned in the original promotional materials as a benefit of having On-Star. On-Star has received numerous complaints according to their own tech people going back several years regarding problems with static and dropped calls. As previously stated, two emergency calls were dropped and did not get through. On-Star could and should have switched carriers for its phone service. They never would disclose who the carrier was, but several of my colleagues who have the same issue with On-Star believe that GM switched from ATT Wireless to Verizon, however when they switched, this did not improve the sound quality since GM did not want to undertake the expense to upgrade its equipment until the FCC ruling.

2. Previously, and when I entered into a two year contract, On-Star would allow you to transfer your service to another GM vehicle. For some reason they changed this rule no doubt to recover the cost of converting from the analog device under the hood to a digital device.

I appreciate the well thought out response from the writer, but I continue to believe that consumers should be leary of paying to renew with on-star if they intend to buy a new 08 vehicle since whatever you pay for your service will not transfer to your new vehicle. GM benefits, but provides no service to earn that revenue should you purchase a new GM vehicle. To me, this is bad public relations and shows absolutely nil goodwill to current customers. I do not work for On-Star or GM and perhaps the poster does since they are keenly aware of On-Star's pricing, issues, and candidly--much of what was written read like an ad for On-Star. By the way, my service writer at my dealership tells me that GM is kicking money back to each dealership on top of what you pay out of pocket so I am sure that the installer at the dealership will be paid his regular salary and dealership will recieve a percentage of the base On-Star service, or so I am told.

The fact remains that unless you read the fine print hidden on the back of the letter fromOn-Star, you will lose all of your money if you purchase a new GM product in the future as they will no longer transfer your service agreement.
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#2 Consumer Comment

just to counter the statement mentioned

AUTHOR: Curapikt - (U.S.A.)

there are 11 paragraphs on this complaint. and ill counter each one of them to prove that onstar provides great service and does not mislead people.

paragraph 1
first of all, you shouldn't call it "OnStar Phone Service". you should call it "OnStar Emergency Phone Service". take note of the word 'emergency'. OnStar is not a telephone company. they are providers of roadside assistance and emergency services. Of course its reasonable to charge high rates on using the phone part, your paying for your life here. you're expected to use that service for emergency use at a life threatening situation 'only', and not to make unnecessary phone calls that would last all day like what you normally do in a regular cellphone. if you are in a life threatening situation, would you care if the line is static, or would you rather care about at least speaking to someone and tell them you need help? Now, it is true that FCC is the one that compelled the companies who uses analog systems to discontinue usage or support analog phones. going back again, it is not onstar's fault that this came up. they're not a phone company.

paragraph 2
you received this letter that you mentioned 'letting you know' that these are your options, not 'have to do's. it is still up to you if you want to do it. if you still want to rely on their service or not. if you still want to be dependent on someone that is giving you new conditions. the $15 is a service charge that you will pay your dealership for the repair man to fix your car. it doesnt go to onstar. of course their will be a human being that would go beyond his way to do his job and do the upgrade. and since he eats like what most people do, he needs to be paid for his job. that's what the $15 is for. the $400 is for the expensive package which is what they call 'Directions and Connections' which comes with all the basic emergency services and roadside assistance and all that. on top of that it allows you to get 'unlimited' direction assistance so you'll know where to turn or go to without using a paper map. the basic package already includes the 'activation' of the phone on the car. meaning it pays for having the phone on the car turned on. but in order to use it and make calls, you need to load it up with minutes or airtime at least once a year. you can choose 30 minutes for $15 which you can consume or keep for the whole year. now i dont think reporting an emergency situation or trying to call someone and giving out your location under an emergency or life threatening situation wouldn't last 30 minutes, right?

paragraph 3
today, we are already in September 2007. and it was mentioned 'what if he buys a car in 2008' so meaning the soon to be bought car is brand new. if a car is brand new, it normally comes with 1 year complementary subscription with OnStar. meaning they dont have to pay for the emergency sign up for the first year. Ok, going back to the old car, he said he was informed that he can keep onstar but he needs to pay their dealership either the lower package which is $199 or the higher package $399. again, the letter is to 'let you know that these are your options'. its not a letter that states you 'should' pay for this. meaning, it is up to the consumer if he will still continue and bear with the company due to the fcc ruling. now again, its the fcc's command and not onstar's. onstar is just following rules, since they are not a phone company and that they are only using the technology.

paragraph 4
your calls can only be possibly dropped if you are either driving or inconsistent fluctuation of cellphone signal on your area. and again don't blame it to onstar since they dont govern the phone signal, since they are not a phone company. and yes. the right words were used by the supervisor 'if you pay'. meaning if you decide to. if you yourself decided to go with the flow, that is the consequence that you have to bear because of the fcc ruling, not onstar's command, they're only following what they were told, and what they are giving is the only solution they can give, since its a business. if dont agree with it then dont pay for it.

paragraph 5
yes. finally. the right words were used. onstar is a phone service carrier. so meaning there is someone higher than onstar when it comes with the phone service, reasoning for onstar not to be blamed of the quality of the signal. if you think that there is a third party vendor, and they are the ones servicing onstar, and you think their service is awful, why not tell the third party provider to make their service better so that onstar could provide the better signal?

paragraph 6
3 months free of which package? if you say its a new car, it comes with either 1 year of the basic package or 'Safe and Sound' or 1 year 'Directions and Connections' package. and if you get the basic package, sometimes they toss in 3 free months of 'upgrade' to the directions and connections package, to try it out. again, its your choice if you want to stick with onstar or not, pay for the upgrade or not. bear with the company that assures your life's safety during this point of change or not. it-is-your-choice.

paragraph 7
i agree. be aware. read the fine print before you decide whether you want to take it or leave it. deal or no deal.

paragraph 8
its business strategy. if you live in the business world, things like this happens. specially here in america. and you have to open your eyes because these things are real. and they are legal. you may think its illegal and the wrong thing to do but as what they did, they mentioned 'everything' on the fine print. you can only consider it illegal 'if' the fine print is missing or not available. but the thing with onstar, they have it all written down. most people dont know about it because as what is mentioned, they dont bother reading it. have they asked themselves 'why not?' if they are speaking about the safety of their lives, shouldn't it be mandatory to know everything and be knowledgeable about everything necessary?

paragraph 9
he can buy the map. it is still considerably reliable since maps had been trusted and used for thousands of years. so you're sure it won't fail you. not unless your eyes do while looking at it.

paragraph 10
like most electronic equipments, the onstar system on each GM car is an electronic device. meaning, it can be damaged. like what you do in your car engine or your tires or your brakes, you have it checked and see if there's anything wrong. when was the last time you had your onstar checked? havent you thought that it might have been damaged sometime reasoning for it becoming faulty or not functioning properly? you'll only get fooled or scammed by anyone if you always agree immediately on something that sounds too good to be true. but if youre vigilant enough and bothers to ask at least the basic or necessary thing you should know, no one can twist your head.

paragraph 11
what i can suggest to this person? I believe you need to study by yourself more on what is wrong with this picture. what you could me missing out on reasoning for these things to happen. if its not sounding right, you should ask where you got it from, and from the very start, you should already know what you're taking before you take it. the nitty-gritty and all. it might come with the fine print. and you may say who reads the fine print. my answer is 'those who doesnt want to be scammed'. if you see anything malicious or wrong on their fine print, that's when you start going on to these kinds of site to complain about it.
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