There’s a ton of upside with switching to a hosted PBX provider. We are proud to encourage our readers to make the upgrade to a hosted solution. We think every day about how best to match the right provider with the right customer. But some providers, small and possibly large, are a bad idea before the phones are even plugged in. This article is not going to single out bad providers; if we did, this article would risk being outdated very quickly. So, we are going to tell you about the best practices to spot a bad VoIP provider before you regret it.

Let me get this out of the way up here. It would be encumbering to have to say about every thing I mention below “not all companies who do this are bad,” or “this is standard for some reputable VoIP providers because” of this or that. I’ll be talking about contracts, pricing, fees, and other things.

So, I want to make it clear that this is not a list of gripes, that many VoIP providers have valid reasons for doing the things mentioned below, and doing things like I mention below keeps their systems reliable, or their prices low, as well as provide robust VoIP phone system features. So, for ease of reading, I won’t be constantly dialing it back, and it may seem hyperbolic or denunciatory, but that is not my intention.

1. The Contract Says You Have to Pay Penalties

VoIP is usually a contract-free service these days. But some companies follow a tried-and-true method of locking you in a contract and throwing away the key. There are a number of reasons why it can be expensive to get started in VoIP. You might have to buy equipment, which is usually locked into one provider. There are activation fees, shipping fees for hardware, number porting fees. A typical strategy in retail stores is to mark up the price on the tag so you can cross it off and offer a lower price. Some VoIP providers do a similar thing by waiving large fees, but as soon as you want out, you’re on the hook for all those charges. Also, you had better hang on to your boxes, because if you want to send them back, they had better be in the same condition you received them in.

Read the fine print carefully for your first month. A very highly recommended VoIP provider insists that in order to receive a refund in your first month you must “not [have] used over 50% of the allowed minutes in your metered subscription plan or 500 minutes in an unlimited plan.” The worst-case scenario is when you have to pay a penalty equal to the unused service contract. In other words, if you have a contract for $100/mo for two years, and you cancel six months in, you still owe them $1,800.

2. You Spot The Little Mistakes

If you see a mistake on their web site, it means they are willing to let things slide. If it’s a technical term, it’s all the more important to get it right. A spelling error means they don’t have an eye for detail. VoIP providers, by definition, are Internet companies, and their website should be error-free.

Here are some technical terms you want to get right

  • Asterisk: An open-source hosted PBX platform that many VoIP providers build on. It is not spelled “Asterisks” “Asterix” or “Asteriks”
  • VoIP: Voice over Internet Protocol. First, the “o” is lower case. Second, make sure they call it “Internet Protocol” not “Internet,” because “Internet Protocol” refers the way the sound is encoded and sent to the other phone, not the worldwide system of interconnected computers and servers.
  • Bluetooth: The wireless technology common in headsets and other devices. Not spelled “Blu-Tooth” or “BlueTooth.”

3. They Don’t Ask About Your Network

Here is an actual quote I’ve heard from a major VoIP provider recently:

“Pause any large downloads while on a call. You may experience delays or dropped calls if you’re downloading large files over the same network you use to make calls.”

While that may sound harsh, I actually agree with it. The minimum recommended speed to make ten concurrent calls is 5 MBps, but that is half the story. You need to have a QoS router. QoS stands for “Quality of Service” which is a technical way of saying that the router detects VoIP packets and puts them ahead of non-real time traffic (like loading websites).

If they don’t make sure that your own network is capable of handling VoIP, you’re setting yourself up for a bad experience. If they don’t work with you to make sure you’re capable of using their service, they don’t have your best interests at heart. If they do recommend you get a new router, be sure it’s one that comes highly recommended for VoIP, and that they aren’t gouging you on the price. A bad router can leave you vulnerable and slow down your traffic.

4. You Can Catch Them in a Lie

Any service or product looking to get your business is going to make a lot of promises. Sometimes, you can see if they’ll make good on those promises before you sign on the line. All you have to do is pick up the phone.

If they say they have US-based support, give them a call. If you hear a non-American accent, that’s an early clue to whether they are as good as their word. If the do offshore their support, they have to be honest about it. A long hold time is also a sign that they can’t live up to their promises. They may promise 24/7 support, but a closer look at their web site may reveal that they have 24/7 only for emergencies or for the highest paying customers only.

You can also find out how often they have service issues, either on their web site or on watchdog sites. A 99.99% uptime means only 8 seconds of downtime per day, or 1 full minute every week. You can crunch those numbers yourself and decide if they are telling the truth about their predicted high availability. An SLA means they will give you a partial refund for lost service. If they don’t have an SLA, they’ll give you a sincere apology.

5. The Reviews Are Suspicious

Fake reviews are a scourge of review sites. They cheapen the value of real reviews by misleading shoppers into buying a bad product or service. Review sites are crowd sourced. They rely on the honor system. A real company is going to have consistent results. They could be consistently good, bad, or in the middle. But if you see a lot of 1-star reviews mixed in with the highest rating, you should be suspicious that they are phony.

Another type of positive review entirely is the many companies that exist solely, or at least primarily, to give awards of recognitions that are meaningless. One of the biggest names in bogus awards is “Consumers Digest.” Many people will make the mistake of confusing it with Consumer’s Union, which is the not-for-profit publisher of the review magazine Consumer Reports and the watchdog web site Consumerist.com (not .org). Consumers Digest is a total scam that doesn’t even review products, and is paid to give “best buy” awards. Again, no relation to the big box retailer Best Buy.

6. They Don’t Provide E-911 Service

The E-911 surcharge is required by the government. If a provider ever tells you it can waive that fee, or not give you E-911 service, they are not saving you $1.75/month, they are breaking the law. Any VoIP provider that interconnects with the PSTN must have E911. Because VoIP is not location-based the way old fashioned phones were, traditional 911 service is incompatible with VoIP. Unless you are doing all of your business through Google, Skype, WhatsApp, or some other personal service, you need E-911, and any provider that tells you differently is dangerously wrong.

7.  They are the Cable Company

You know your local cable company. You know how horrible their customer service is. So why would you trust your business phone to them? Cable companies’ business model is based largely on your inability to bargain shop. You might be a little hesitant to make the break to a new provider because you don’t know what’s out there, or you’re uncomfortable with change. I’m here to tell you to get past that stage, because your cable company has little incentive to make your day better, they only have to work well enough for you to not cancel on them. I can assure you that being a little uncomfortable now will save you from being unhappy with your inferior service later.

No cable or major phone provider can really compete on features with cutting edge companies that can integrate with other major services like social media and CRM providers. Smaller, more nimble companies will innovate in ways that big cable companies are just too slow for.

8. They Swear Up and Down to Be The Best Price—No Matter What!

We all want to get the best deal. Many VoIP providers may negotiate with you if you’re leaning towards another provider with a lower price. But, there comes a point where that breaks down. If you come to them with a quote of $14.99/user, which is by far one of the best deals out there, and they give you $14.98/user, they’re a little desperate. The fact that a company won’t stick to its guns and let the service speak for itself says they aren’t confident in their service. Their goal, in that case, is to get you stuck with them.

I’ll repeat what I said earlier: Not every provider who does one of more of these things is necessarily a bad VoIP provider. But when you get that sinking feeling in your stomach that you’re about to make a big mistake, check against this list and see if maybe it’s more than just a fear of the unknown.