There’s no such thing as “cost of doing business” any more. Nope, companies now charge you fees out the ying-yang, and try to disguise them to hide the fact that they are making huge profits from nickle-and-diming you to death.
A couple of articles this morning about fees. First, via MSNBC, a missive about the fees masquerading as “taxes” on your phone bill.
Regulatory Programs Fee. It sure sounds like a government tax.
It isn’t. The latest addition to T-Mobile’s monthly bill is merely the latest example of telephone companies passing their own cost of doing business to their customers with an array of surcharges that one might easily mistake for taxes being collected on behalf of the government.
Actually, T-Mobile’s monthly charge of 86 cents is among the more clearly labeled.
At Verizon Communications Inc., monthly bills for high-speed DSL Internet service will now include a surcharge ranging from $2 to $3 a month called “Supplier FUSF Recovery,” while DSL bills at SBC Communications Inc. now show an “FUSF pass-through fee” of $1.86 for new and renewing subscribers.
Cell phone subscribers at Nextel Communications Inc. pay $1.55 a month for “Federal-Programs Cost Recovery.” Other extras include a “Federal TRS Charge” and “State-Gross Receipts Recovery,” though thankfully there’s at least a footnote below owning up to the fees as Nextel’s doing.
With millions of subscribers at each company, these relatively small fees add up to billions of dollars per year in extra revenue from what amounts to an unofficial price increase. And in the case of the cell phone industry, companies are forcing their customers to reimburse them for basic marketing and customer retention costs.
… The companies are legally permitted by the Federal Communications Commission and local regulators to defray many of their regulatory burdens by charging extra.
But nowhere in the rules does it say that the companies should recover their costs through a surcharge to the basic price of service. Unfortunately, the rules also don’t force them to include the fees with the advertised price.
Beyond a general requirement under federal law that such fees be “just and reasonable,” there is no specific cap. Likewise, the FCC does not closely monitor many of the fees or the expenses they purport to recoup. Instead, they have left it up to companies, arguing that consumers will comparison shop and punish those carriers with excessive fees.
Not surprisingly, then, nearly every major wired and wireless phone company has exploited these vagaries to boost their prices without having to raise their advertised rates. And since all the companies have imposed these stealth price hikes, the market forces regulators expected to contain them have proven negligible.
Next, from the Washington Post, complaints about the high fees tacked on to tickets:
When David Guskin got the bill for the Britney Spears concert tickets his daughter, Emily, ordered from Ticketmaster, he was shocked. On top of the $56 price for the July 10 show at Nissan Pavilion was a $3.50 “facility charge,” a $9 “convenience charge” and a $4.10 “order processing fee” for each ticket.
“Where is the bathroom fee? The food availability fee?” complains Guskin via e-mail. “The total of various junk fees is $16.60 [per ticket]! This is almost 30 percent of the ticket price itself and about what the entire cost of attending a concert was not that long ago.”
Guskin, a Potomac resident, thinks the fees are “absurdly large.”
But such objections are nothing new to the world’s biggest provider of automated ticketing services. Ticketmaster has long been a complaint magnet largely because of its seemingly superfluous fees. Consumers like Guskin who are already hot over paying big bucks for concert, show or sports tickets feel they’re getting burned by add-on charges that jack up the advertised ticket price by 20 to 50 percent, depending on the event.
Some consumers have even taken Ticketmaster to court over the fees, though without success. Most cases are dismissed. Or, as with a 1994 New York lawsuit that alleged the fees were excessive, the courts found that the fees are “always disclosed” and didn’t constitute deceptive business practices.
This is becoming a common practice, this picking the pockets. I’ve always tried to avoid doing business with companies that charge the “revenue enhancers,” from banks to phone companies. But it’s getting tough — so many now have found it’s an easy way to boost profits. From $2 ATM fees (there is no possible way that it costs $2 per transaction to operate that ATM) to $5 to use a teller at a bank (suddenly that $2 ATM fee is attractive), this phenomenon is getting out of hand.
Businesses don’t price their products and services at a loss. These additional fees are just padding their pockets in a stealthy way, letting corporations gain higher profits while letting customers think they’re being taxed to the poor house.
