Remember all those rantings about extra tacked-on fees I’ve done in the past? (You don’t?! Well, look here and here and here and here. And here.)
Well, The New York Times’ David Pogue exposes yet another sneaky, underhanded technique that companies are using to separate you from your cash: “stealth inflation.” That’s how he describes the steady increase in rates for such corporations as wireless companies, who are getting more and more money from you without an actual rate increase. The sneakiest way is to overcharge you and hope you won’t notice. This method has worked for eons in the form of “rebates” — companies sell you an item at regular price but advertise it at a lower price because of the rebate. They bank on the fact that most people never get the rebate because it’s too much trouble to apply for it.
Much the same thing is happening with the wireless companies:
Phase 1 of this program was the proliferation of miscellaneous fees – for “regulatory assessment,” “handling,” “restocking,” and so on. According to Business Week, newly concocted fees will generate $100 million for hotels this year, $2 billion for banks, $11 billion for credit-card companies – and an average of 20 percent extra on every phone bill.
Recently I may have stumbled upon Phase 2.
Attracted by the superior coverage of Verizon’s wireless network, I signed up for a new cellphone. The $60 package included unlimited night and weekend calling and 800 anytime minutes.
A few days later, a welcome letter congratulated me on my new 700-minute plan. I called customer service. It was supposed to be 800 minutes, yes?
The phone representative explained that what I signed up for was the 700-minute plan, with a 100-minute bonus. The welcome letter didn’t reflect the bonus, but I would see it on my monthly statements.
All right, no problem. All I’d lost was the 25 minutes on the phone with Verizon.
Yet when the first statement arrived, Verizon had charged me 25 cents for every minute over 700.
I called the 800 number again; the representative apologetically credited me the 100 minutes. Cost to me: another 25 minutes.
When the same error cropped up on the next month’s statement, my wife mentioned that she had gone through precisely the same ritual with MCI long distance a few months earlier. In fact, after reviewing our records, we discovered at least seven cases in the last few years when a service company (including at least three phone companies) overbilled us and didn’t correct the mistake until we turned ourselves into human pit bulls.
The article goes on to quote some of the huge numbers of e-mails he received from frustrated consumers:
“My experience with cellphone companies, airlines, and Internet providers has been so overwhelmingly dominated by ‘mistakes’ that I can’t believe that it amounts to anything less than an insidious new business model developed to prey upon busy lives,” said Jeremy Cohen, a 25-year-old music student in Cambridge, Mass.
A posting on nytimes.com offered a similar lament: “They’ve cut to the bone to increase their bottom line. They train their front lines to blow people off, and give them no authority to make amends for problems. In previous eras, this was known as thievery. Now it’s just the way things are done.”
Verizon’s spokeswoman brought up another point, which I call the Theory of Statistical Inevitability. She pointed out that Verizon Wireless has 40 million customers. “Even though we strive to get it right the first time, all the time, there are, unfortunately, times when we fall short,” she said.
But there is a hole in that defense, as one reader wrote: “If these were truly random errors, one would expect that some of them would work in our favor. I know of no one who ever got extra minutes, extra money or extra anything else.”
And sure enough, in 1,200 tales of billing errors, only two people described ever being underbilled. (Of course, most customers who find errors made in their favor are smart enough to keep their mouths shut. Only Abe Lincoln would spend 25 minutes on the phone trying to give his cellphone company its $1.75 back.)
