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The Almighty Buck Communications

Telecom Carriers Use Deceptive Advertising 285

theodp writes "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 customers with an array of surcharges that one might easily mistake for taxes being collected on behalf of the government. With millions of subscribers at each company, these less-than-forthright fees add billions of dollars per year in extra revenue without raising advertised rates."
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Telecom Carriers Use Deceptive Advertising

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  • by CptChipJew ( 301983 ) <`moc.liamg' `ta' `rellimleahcim'> on Saturday May 15, 2004 @11:02PM (#9164727) Homepage Journal
    Although these tactics could be seen as immoral and lame, it doesn't look like they're actually breaking any laws. From the article, "Actually, T-Mobile's monthly charge of 86 cents is among the more clearly labeled.". As well, "though thankfully there's at least a footnote below owning up to the fees as Nextel's doing."

    Like EULAs, they are taking advantage of the fact that nobody reads them.
    • by LostCluster ( 625375 ) * on Saturday May 15, 2004 @11:07PM (#9164751)
      For the record, the FCC's FAQ on the issue [fcc.gov] states very clearly that the USF is an obligation of the telecom carrier that they're allowed to shift onto their consumers, but they clearly don't have to.

      So, basically, this is just a way for them to itemize it like it's a tax, when really its a tax on the telecom company rather than one on the consumer at the point of sale.

      Just like the IDT ads claim, the big guys even try to pass their own property taxes [fortwayne.com] off to the consumers by a fee.
      • by CptChipJew ( 301983 ) <`moc.liamg' `ta' `rellimleahcim'> on Saturday May 15, 2004 @11:10PM (#9164775) Homepage Journal
        Of course, such is big business. When you buy a car, you pay a "transportation fee" for getting the car from the factory to the dealership.

        When I was a kid I lived near one of Toyota's factories, and the same transportation fees applied at the nearby dealership than at the one near me here in Los Angeles.

        I would hope that eventually the cell industry will become saturated with companies someday to the point of "No hidden fees!" advertising.
        • by Anonymous Coward
          "I would hope that eventually the cell industry will become saturated with companies someday to the point of "No hidden fees!" advertising."

          I remember a Dilbert book that called these things "Confusopolys" - where the only way they make money is confusing the customer so much they pay for unnecesary stuff.

          Scott Addams described it far better than I could. Anyone remember which dilber book this was?

          • I remember hearing about confusopolies on the Dilbert tapes called 'The Dilbert Principle'

            They were funny as hell, made at least one plane ride go by faster. Scott Adams is a seriously funny man.
        • I would hope that eventually the cell industry will become saturated with companies someday to the point of "No hidden fees!" advertising.

          I forget the name of it, but there is a telephone company that's advertising in the Chicagoland area that is doing just that. Don't think they're doing cell phone service yet, but that's how they're trying to lure customers in for regular service.
        • When I was a kid I lived near one of Toyota's factories, and the same transportation fees applied at the nearby dealership than at the one near me here in Los Angeles.

          Did you buy a car from THAT factory, though?

          And did you actually compare rates? Remember that if the dealer's close enough to get its car via truck (rather than ship-then-truck), the only differnece in transportation will be the actual mileage it takes to drive the longer distance.
        • by SagSaw ( 219314 ) <slashdot@mmo[ ]org ['ss.' in gap]> on Sunday May 16, 2004 @01:08AM (#9165164)
          Of course, such is big business. When you buy a car, you pay a "transportation fee" for getting the car from the factory to the dealership.

          As far as I'm concerned, there is nothing wrong with these practices so long as the fees are disclosed to the purcahser before they have to commit to the purchase (or lease, other contract). In the case of the trasportion fee on new cars, it is listed on the sticker, and is a part of the sticker price.

          This would be equivalant to the telco companies simply stating that $17.47 of your $59.99/month plan goes towards regulatory compliance.
        • by Jason1729 ( 561790 ) on Sunday May 16, 2004 @01:40AM (#9165243)
          The "transportation fee" only applies if you're stupid enough to pay it. It's one of the easiest to get waived. The other is "administrative fee" which is basically their advertising budge. Getting those waived is as simple as saying you're not paying them and getting up to leave.
          • by Anonymous Coward
            "The "transportation fee" only applies if you're stupid enough to pay it."

            Actually the transportation fee is not a dealer based fee and represents what the dealer pays to Toyota (or the regional association) to get the car delivered to him.

            When you say that you get it "waived", you're merely being naive. Cars are routinely discounted from the sticker price; in fact except for hot cars every car is available for less than sticker, and sometimes considerably less than sticker.

            Therefore if a car costs $20K
      • by TykeClone ( 668449 ) <TykeClone@gmail.com> on Saturday May 15, 2004 @11:11PM (#9164776) Homepage Journal
        There are no taxes on businesses - All taxes are passed on to their customers. Telecoms just are kind enough to itemize it.
        • by LostCluster ( 625375 ) * on Saturday May 15, 2004 @11:16PM (#9164800)
          The costs of businesses are not always passed on to consumers. Sometimes they come out of the profits... that's taking money from the owners rather than the consumers.

          If music piracy were to go down, do you really think we'd instantly see a price cut?
          • by TykeClone ( 668449 ) <TykeClone@gmail.com> on Saturday May 15, 2004 @11:21PM (#9164817) Homepage Journal
            No I don't, but I also don't think that if corporate taxes go to 0% that we would see price cuts either.

            In the last couple of years, we've been in an environment where most businesses have had no pricing power - near 0% inflation has made it so that no one could raise prices.

            Now that the economy is starting to pick back up, prices will be easier to raise and I suspsect that most companies will be passing on the increased taxes of the last couple of years (you don't think that the states have been sitting idly by, do you?) on to consumers.

            I think that a close to ideal tax structure (at least for businesses) would be a sales tax - that way everyone would be up front about what the government gets.

            • by miu ( 626917 ) on Sunday May 16, 2004 @12:13AM (#9165006) Homepage Journal
              I think that a close to ideal tax structure (at least for businesses) would be a sales tax - that way everyone would be up front about what the government gets.

              Sales tax only works if you have an exemption on food (probably qualified as just those things that can be purchased with food stamps) and a higher rate on luxury consumables. The reality is that every US state (48 of em) that has instituted a sales tax has started out with a 2.0% rate that can never ever ever be raised and an exemption on basic necessities.

              In the majority of cases the rate is 5%+ within 10 years and the exemptions for basic necessities are gone. So sales tax winds up as an unreasonable burden on the poor and middle class.

              • Bah! 5%+ is nothing. Here in the UK sales tax (VAT) is 17.5%, which is charged on top of other taxes. For example, petrol duty is about 50p per litre at the moment, but with VAT that goes up to around 60p, so for the 80p you pay for a 1 litre of petrol (approx $5.25/US gallon) 75% is tax.
            • Speaking as a Canadian, and paying 15 fucking percent sales tax where I live, I can assure you that sales taxes are the LAST thing any reasonable economy should implement. It drives off tourism, makes price-gauging more difficult, and is virtually impossible to eliminate once it's in place.

              I'd happily pay a bunch of extra income tax and deal with higher prices, if it meant eliminating the PST and GST.

      • by nolife ( 233813 ) on Sunday May 16, 2004 @12:03AM (#9164969) Homepage Journal
        I know saying the FCC allows this makes it all sound good but think about that concept big picture. What gives the FCC the right and or power to allow my cellular phone provider to modify the terms of my contract I have with that cellular provider? You can tell this story 100 different ways but bottom line, that is exactly what is happening here. I am paying MORE per month then my original contract states and it is not because of a federal or local tax, that money goes directly to the carrier with little to no oversight on what they can charge and for how long. The cost of doing business is exactly that. A contract is exactly that. The cellular providers WANT long contracts to tie you into the service but also want the ability to raise rates after that contract is signed but masking it as an add on "fee" to cover costs. Here is an idea for them. If they want the ability to adjust the fees based on the cost of doing business, then do not have such long contracts. What if my county raises the taxes they want for each cellular phone, can I deduct that exact amount I pay my cell carrier every month as a "cost of owning a cell phone"? If the government raises the minimum wage and now all CSR's at the cellular company make 25 cents more an hour, would they be allowed to add a few bucks to you bill as a federal minimum wage increase fee? Hell no.
        • What gives the FCC the right and or power to allow my cellular phone provider to modify the terms of my contract I have with that cellular provider? You can tell this story 100 different ways but bottom line, that is exactly what is happening here.

          If your carrier adds a fee (as T-mobile just did) you can cancel your contract without penalty. Of course, they don't exactly advertise this fact, but it has happened with both T-mobile and Sprint in the last year. Check out some of the threads on Fatwallet.com a

    • Car dealers (Score:4, Offtopic)

      by nycsubway ( 79012 ) on Saturday May 15, 2004 @11:31PM (#9164860) Homepage
      My favorite thing at the car dealer is the "conveyance fee" that is pre-printed on the invoice for a car. They say "it's necessary, everyone has to pay it. It's state mandated." Of course none of it is true, but people will pay anyway, because they're not being told the whole truth.

      It's not illegal, but its very sneaky. It's something that most people will miss, and when most people dont know they are being ripped off, then the government can take a closer look at it.

    • by Anonymous Coward on Saturday May 15, 2004 @11:52PM (#9164940)
      So, because it's not breaking any laws, and they're only innocently taking advantage of people not reading the 5,000 page included agreements, we should let this go?

      Don't you get kind of fed up with companies taking advantage of people? Why is this so accepted in this country? Shouldn't we start doing something to companies that blatantly lie to costomers to gain their business? How long are you going to allow people to get screwed over and then point the finger at the individual because it's "their fault" they didn't take time out of their 50 hour workweek to deal with one-of-several-hundred companies bullshit lies?

      • Firstly, what's happening here is more deceptive than fraudulent. In short, it's predation upon consumer ignorance, and government has no responsibility for the contents of your mind.

        Companies that take advantage of people like this should lose their customer base. Nobody needs a cellphone, dipshit. The demand for cellphones is at an appallingly insensible high point and people should right-size their needs. I see poor people walking along with cellphones. They are getting exactly what they deserve.

        So, I blame the consumer. I already know businessmen are scumbags, but they are free to humiliate themselves in public with their slimy business practices. People put up with it since they are sheep. Stop being sheep!

        Businesses that act like trapdoor spiders -- inviting people in with simple slogans them baffling them with conditions and other bullshit -- should lose their customers. A 5000-page "agreement" is an outrageous sign that they want to fuck you over. Learn to identify the signs and then shun them. Power comes from the people, not officials. We The People can shut down any business we chose ... without reliance upon the assholes in the legislature.
  • by 00420 ( 706558 ) on Saturday May 15, 2004 @11:03PM (#9164730)
    Telephone companies have been doing this for many years.

    One of the companies I worked for even listed the surcharges at the end of the taxes so that when people called the first five or so things they asked about would get an answer of "that's a tax, there's nothing we can do about it," that way they usually stopped asking before getting to the surcharges.

    Most companies won't even list them though, they just put "Other taxes and surcharges... $X" on the bill.
  • Where I come from, the consumer protection authority jumps all over companies who don't include fees like this in advertised costs. I bet sleazeballs like this charge a hefty early disconnection fee too...
  • by LostCluster ( 625375 ) * on Saturday May 15, 2004 @11:04PM (#9164736)
    ABtolls.com maintains a database of phone rate planes, and does the consumer the favor of computing the true cost of a plan after all the USF and PICC fees are added in. This particular dial-around plan [abtolls.com] has to go down as one of the worst offenders. While they claim that the first three minutes only costs 5 cents, "regulatory fees" make that three-minute call cost 16.37 cents, more than triple the advertised rate!

    Sure, that's only pennies of difference, but nickeling and diming in volume adds up.
  • by Anonymous Coward
    Personal Telco [personaltelco.net]
  • Big Fat Duh! (Score:4, Interesting)

    by mbrother ( 739193 ) <mbrother@uwy[ ]du ['o.e' in gap]> on Saturday May 15, 2004 @11:08PM (#9164758) Homepage
    Phone companies have been pulling this crap for years, banks too. Doesn't mean they should or that people like it. Tempted to try this on my next government grant budget, but will probably have an attack of integrity. Deceptive but not illegal is still sucky. And that's the technical term.
    • Re:Big Fat Duh! (Score:5, Insightful)

      by tomstdenis ( 446163 ) <tomstdenis.gmail@com> on Saturday May 15, 2004 @11:30PM (#9164857) Homepage
      No, deception but not illegal is called "modern business". It's gotten to the point that to make more money than your competitor you don't make a better product [why? Standards are fairly subjective nowadays]. Instead you trap your customers into useless deadend contracts and then tact on this charge and that charge.

      Banks are by far the most useless institution I've seen. For instance, I get paid via cashier cheques made out to my name. However, if I walk into another branch of the same bank I can't cash the cheque despite the fact every teller has a new-fangled computer with a 17" LCD monitor [which probably cost serious coin].

      Every time I see a teller it costs money. Whenver I cash my cheque it costs me money [2% + fee to change from USD to CDN]. Whenever I take out money from non-branch ABMs it costs me money. etc, etc, etc.

      Then you get into bank hours which are often anywhere starting from 9 to 11am and ending from 3 to 5pm totally useless for students and the employed.

      Then you get into the stupid tellers. Who rarely follow procedure [one teller will cash your cheque without a hold another with a 20 *BUSINESS* days hold].

      Then commercials tell you "you are first, we are here to put you first, if you are not first then we are not doing out job to put you first. You are the first important job we deal with because as our first customer you will get the first attention you firstly deserve" which are just trying to hide the fact that banks don't give a rats ass about customers. If they can find a way to make a buck off a customer [including raping you up the ass when you're not looking] they'll certainly try.

      Personally if I could find another way to turn a cashier cheque into rent+school+bill+food I would do it in a heart beat.

      Back on topic. Phone companies pretty much work on the same M.O. Using stupid commercials to blindside the customer into signing 3yr contracts for plans they don't need, can't use and wouldn't want given the option. 60 "anytime minutes", unlimited weekends, 0.30$/m net access, bullshit bullshit bullshit.

      Personally I'd love to see a plan "you pick up da phone and you can talk", no net, no ring tones no stupid extras. Just a fucking phone. These "value added gourmet quality" additions are just there to cover up the fact that you pay too much for the little coverage/service you get. It's like adding salt to dog shit and calling it steak.

      That's my rant and I'm sticking to it.

      • Re:Big Fat Duh! (Score:4, Informative)

        by mbrother ( 739193 ) <mbrother@uwy[ ]du ['o.e' in gap]> on Saturday May 15, 2004 @11:37PM (#9164886) Homepage
        I have a credit union with direct deposit, very few fees, if any at all most months. I know I'm smart/lucky there. The direct deposit gave me 0.25% off on a car loan, too, at a decent rate already. The phone thing though...do you also get Qwest commercials where you are that intimate that their customers love getting their bills and phone calls?! Unbelievable...
      • I strongly suggest that you talk to a credit union.

        I used to have my business accounts at a bank and when they told me that they intended to deduct 2% from my cash deposits (real cash, not cheques or anything like that) for a "service fee", I told them that I was taking my business elsewhere. I walked down the street and got an account at the local credit union and have never regretted it. That was six years ago.
  • Not with AT&T (Score:4, Interesting)

    by Anonymous Coward on Saturday May 15, 2004 @11:08PM (#9164759)
    I just signed up with AT&T wireless not a week ago. They were very clear and up front about the fact that it is not a tax, but it is used to cover the expenses of follosing the various regulations. I signed up anyway, knowing full well what they were doing.

    They call it a "Regulatory Programs Fee", like Verizon does.

    Maybe some other carriers have problems with this - and maybe AT&T has their own problems, I haven't been signed up long enough to know - but I can't at all fault them for this.

    In all fairness, the article did not single them

    --Russell (not logged in because it's Sat. Night and I'm a lazy f*ck)
    • Re:Not with AT&T (Score:5, Insightful)

      by DAldredge ( 2353 ) <SlashdotEmail@GMail.Com> on Saturday May 15, 2004 @11:39PM (#9164895) Journal
      But they don't include those fees in their TV, radio or print ads, do they?

      THAT is what upsets people.
    • Wow.

      You actually chose to go w/ AT&T. Be prepared to be calling them up on a regular basis to correct your billing. AT&T was rated #1 for customer complaints, incorrect billing, and service. The two people I know with AT&T are itching to get out of their contracts b/c of the crappy service. Click here [cnn.com]

    • I just signed up with AT&T wireless not a week ago.

      Congrats! You're now in bed with the Verisign of wireless; the Microsoft of Telcos. The most expensive wireless company on the planet, with nowhere near the best calling area or plans.

      I researched all the companies over many years. One company I would never deal with is AT&T.
  • So what do you want? If the government mandates things like number portability and location, this makes a change to the company's bottom line. I don't see how this is different than a tax really.

    I'd be more likely to call things like this "unfunded mandates". People groan about getting screwed by companies and then groan again when the companies charge them for services that they mandate.

    Personally, I'm a little ticked by this way of recovering costs. I'm now paying monthly for other people to have number portability. This seems akin to having a monthly charge on my bank account for other people to use non-network ATMs. I don't like paying for non-network ATMs, so I don't use them. Similarly, I don't like paying to move to a new network, so I don't do it.

    But honestly, if services are going to be mandated, we have to expect to pay for them. You can't really complain too much about .86. Have you seen what land lines charge per 'service'?
    • I'm now paying monthly for other people to have number portability. This seems akin to having a monthly charge on my bank account for other people to use non-network ATMs. I don't like paying for non-network ATMs, so I don't use them. Similarly, I don't like paying to move to a new network, so I don't do it.

      Are you sure that you're paying for other people to use non-networked ATM's? Many times the owner of the ATM has a surcharge (to pay for the ATM) and your bank will have a fee for using ATMs out of t

      • No, you misunderstand. The .86 on t-mobile is to pay for number portability and 911 location service, if I understand correctly. I don't use number portability, and I haven't used 911 location service (although I can see paying for this in case). I am sharing T-mobile's cost of other people using this service.

        At my bank, I only pay ATM fees if I use non-network ATMs. If the government passed a law outlawing ATM fees, the administrative costs would probably show up in a similar way. Since they are allo
    • If the government mandates things like number portability and location, this makes a change to the company's bottom line. I don't see how this is different than a tax really.

      It's a tax on people who patronize businesses who built crappy enough infrastructure or business models that number portability was a problem.

      In the same way, of course, that a lottery is a tax on people who are bad at math.
    • Number portablity was actually a break-even proposition for most of the cell phone carriers.

      It turned out to be a knockout blow to AT&T Wireless because they botched an IT upgrade that ended up not allowing them to accept new customers during the critical moments when portability first opened up. All off the other companies, ended up just trading customers [chicagotribune.com] leading to higher customer satisfaction rates.

      In short, this was one of the best advertising boons the cell providers ever had, as unhappy customer
    • by David Jao ( 2759 ) * <djao@dominia.org> on Saturday May 15, 2004 @11:33PM (#9164869) Homepage
      But honestly, if services are going to be mandated, we have to expect to pay for them.

      The complaint is not that we have to pay for them. The complaint is that these fees are not honestly disclosed to the customer until after the customer is already signed up, in many cases to a long term contract.

      Without up front disclosure of the amounts of the fees, it is impossible to make an informed choice of telecom company based on what the service really costs. The practice of hidden fees also unfairly penalizes those companies that satisfy the mandates more efficiently and thus can charge lower fees.

      In short, nobody minds fees. The problem is the way the telecom companies deceptively advertise their prices without the fees.

      • This is okay if the fee exists before I sign up, but if it comes into effect after I sign up, how do they predict that?
        • by Shurhaian ( 743684 ) <veritasNO@SPAMcogeco.ca> on Sunday May 16, 2004 @02:11AM (#9165340) Journal
          AT&T Wireless, I know, did not add the fee onto the services of customers under contract unless they did a rate plan change, at which time reps had a statement that needed to be read about it. Customers out of contract got a notice on their bill prior to it being added(previous invoice or something).

          Other carriers, I don't know.

          As for the grandparent's claim that these fees don't appear until you're locked into contract, I still call BS, at least where AWS is concerned. The RPF is mentioned in calling plan brochures and is listed online(in the footnotes along with other T&Cs, but there). Also, wireless carriers are obligated to give some sort of trial period before the contract is locked in. AWS, for instance, gives you thirty days. Stores that aren't owned by AWS, mind, can have truly draconian return policies for their equipment, but that's another issue altogether.

          If you don't read the contract or the literature until after the fact, it's your own fault. Complain all you want, but there's no recourse for legal action - they did tell you so, you just didn't pay attention.
  • Lawsuit (Score:5, Funny)

    by OneIsNotPrime ( 609963 ) on Saturday May 15, 2004 @11:12PM (#9164780)
    I would encourage a class action lawsuit, but then l would probably just see this on my bill next month-

    Regulatory Consumer Disloyalty Juris Prudence Fee - $14.86
  • by Anonymous Coward
    It's called....

    Drums roll!!!!!!!

    Quarters!!!!!, public phones are vailable everywhere.

    Stop being a snob.

    Save yourself to get beaten to death when your cell phones rings in public events restaurants,movies,concerts you name it.

    Prove your geekiness making free phone calls from your public phone, still possible :).

    and you have to stop your car to make/attend a phone call so what are you waiting for?
  • by acadiel ( 627312 ) on Saturday May 15, 2004 @11:15PM (#9164794) Homepage
    Looking at my last Nextel bill: Wife's phone plan charge was $17.59. "Taxes" were $6.66 to bring the total to $24.25. That's 37% in taxes. The * ones ("Fees Nextel elects to collect to recover its costs of funding and complying with Gov't mandates and initiatives") were $3.11, or a grand total of almost 18% of my wife's bill.

    To break it down, the Federal TRS charge was only 0.073% (0.01). The Univ Serv Assessment was 1.25% (0.27). The Cost program recovery fee was a flat $2.83.

    My account plan rate was $47.54. Taxes were $10.98 to bring the total to $58.52. That's 23% in taxes. The * ones were: TRS Charge: 0.073% (0.04), Univ Serv Assessment 1.25% (0.65) and Cost recovery fee ($2.83). Result? $3.52 in these charges, or only 7% of my bill.

    What makes me sick is this:

    I was paying $65.13 a month to Nextel plus a total of $17.64 in taxes and fees. (A 27% tax rate!!!!).

    Take my last Cingular bill (I just switched). My monthly service charges were $47.97. The fees on the account were $6.52 on the line with a $38.98 charge, and $2.71 on the line with the $8.99 charge. That's only 19%! Cingular charged me 17% on one line and 30% on the other (well, the second one is skewed since it only has a $8.99 plan.)

    Cingular charged me only $1.07 for the Federal USF, and 0.60 for the "Cost Recovery Fee". The rest was a Federal/State and 911 tax. On the other phone, they charged me .25 for the USF and 0.60 for the Regulatory cost fee.

    I find it real sneaky how these providers are doing this.....
  • by Whumpsnatz ( 451594 ) on Saturday May 15, 2004 @11:15PM (#9164795)
    If you can't get the product (phone service) without paying that extra, then as far as I'm concerned, it's a tax, especially if you really do need the service.

    When I add up all those outrageous charges, I calculate that taxes (by my definition) amount to about half the cost - if not more.

    Really makes me want to totally disconnect. But then how would I complain on Slashdot?

    More to the point, those charges only happen when the politicians allow (or encourage) it. Here in Florida, the politicos passed a bill that allows a 70% increase in basic rates. I'm taking names.
  • by Professor D ( 680160 ) on Saturday May 15, 2004 @11:16PM (#9164802)
    Can I deduct my costs from the payment I make to the phone companies?

    Let's see. If I write more than 5 checks a month, it costs me $5 per. I can pass that on to them. Oh, and don't forget the cost of the stamp. How about all the taxes I pay as a result of me making a living? Gas tax, income tax, sales tax, Social security ... I'll just deduct all that from my payment ...

    What? Didn't anyone at the company notice the EULA they accepted by accepting my payment? I included it in the envelope and they accepted it by cashing the check.

    • This kind of thing pisses me off, too. I don't mind THAT much (although I mind) credit card company late fees. I pay some too -- up to $39, because I'm a busy guy. But at least I've agreed to it and can punish that card by putting it in the "do not use" pile for a year, or usually calling to complain and threatening to cancel will eliminate the charge. But when you have different companies (like hospitals, or other companies that prefer to bill you down the line) assigning arbitray late fees and the lik
    • You pay $5 per after 5 checks a month? Whoa.
  • Always scrutinize contracts, get things on tape if you have the time. When stupid charges pop up deny them. If they don't then withdraw absolutely every add-on [call display, voicemail, net access] that you don't need.

    Not like you will "hurt" the company since there's always another moron to take your place but you can make "your" stand and at the very least have a lower bill to show for it [even if it still has a moron-fee] attached to it.

  • by l0ungeb0y ( 442022 ) on Saturday May 15, 2004 @11:25PM (#9164835) Homepage Journal
    There is nothing wrong with what T-Mobile is doing.
    And that's entirely what's wrong with the picture.

    And while this may indeed be Yet Another Reason to Bitch to Government with some requests for some regulation, keep in mind there WILL always be loopholes for accountants (just as crafty as lawyers, just not as loathed (ever seen an accountant on CNN defending high profile clients?), so all it would amount to is a finger in the dyke.

    What you need here is full disclosure... and correct me if I'm wrong, is already mandated THAT IF YOU ASK THEY MUST GIVE. So next time ask the sales rep to outline all the surcharges and taxes BEFORE signing up for service and do the obligatory second opinion from a competing carrier. But chances are they will be roughly the same.

    • Had one thing in mind when I started typing and while thinking it through changed tact. So the subject line is in fact bogus
      • Rating an addendum to my parent post as off-topic?
        Excuse me while I weep for both my lost karma and the sheer stupidity of the mod who wasted one of their precious points.

        *sighs -- prepares for another mod down for typing this post*

        And so now I must give the obligatory Animal House qoute:
        "Thank you sir, give me another!"
  • by hta ( 7593 ) on Saturday May 15, 2004 @11:25PM (#9164836) Homepage Journal
    water has been found to be wet.
  • by profet ( 263203 ) on Saturday May 15, 2004 @11:26PM (#9164838)
    Federal Excise Tax: $1.29
    Federal Universal Service Fund: $0.56
    State Gross Receipts Tax: $0.15
    State Sales Tax: $1.76
    State Telecom Excise: $1.00
    County Surcharge: $0.05
    County Telecom Excise: $0.79
    MCTD Surcharge: $0.24
    Local Sales Tax: $1.81
    State 911: $1.20
    County 911: $0.30
    Regulatory Programs Fee: $0.86
    • I doubt it. If it isn't a tax, why not roll it into the monthly rate? It's very frustrating to see incomprehensible, mandatory fees on a bill you must pay to maintain service. Roll it into the monthly fee and let us eat our Soylent Green like happy cattle. We've got bigger fish to worry about.
      • I doubt it. If it isn't a tax, why not roll it into the monthly rate?

        Because you might argue "Hey! You can't raise the rate! I have a contract!"

        The telecom industry is now nothing more than a way to test out new, duplicitous business models on the pure act of calling your mom.
  • by ctwxman ( 589366 ) <me@@@geofffox...com> on Saturday May 15, 2004 @11:27PM (#9164845) Homepage
    Many cell providers advertise "no charge for roaming nationwide." The plan I'm on from Cingular features that. What is not said is, many of the places you could roam from in the days of paid roaming are now blocked from your phone! At home, on my "no charge for roaming nationwide" plan, I often get a full scale signal. But, when I try to make a call I am admonished, "Emergency use only."
  • uh (Score:3, Insightful)

    by Peyna ( 14792 ) on Saturday May 15, 2004 @11:27PM (#9164848) Homepage
    latest example of telephone companies passing their own cost of doing business to customers

    Isn't that what companies do? You pay them to do some service or deliver some good, and as such you're always paying their cost of doing business plus some for their profit.
    • Re:uh (Score:4, Informative)

      by fermion ( 181285 ) on Sunday May 16, 2004 @12:18AM (#9165020) Homepage Journal
      Most honest companies will estimates all costs and expected profits into a price quote. They will than add taxes to that quote . Most honest companies, like some car dealers, will even estimate the additional taxes and fees up front.

      What the phone companies are doing is making the costs of service look cheaper than it is. They quote you $50, but in fact are charging you $55. The $5 is not going to an government agency. The $5 is revenue. It is what you pay for the private company for the service, which most of us would consider the real cost of the service.

      The problem with this is that limits your ability to compare prices. Many mail order places use this shady tactic to make their inferior products seem less costly. For instance, a music service may list prices for CDs that are, on average, $8. However, after adding the handling fee, a fee that is in fact revenue to the company, the real costs of the CD may be closer to $12. Note that is not the shipping fee that is paid to the carrier, which may be as low as $1.50. By quoting an intentionally deflated price, they deceive consumers. Many of the shady mail order place, like fingerhut, play the same game. I believe UPS paid a fine for doing this with the insurance charge.

      As an example, suppose car insurance companies were allowed to add a statutory loss fee that would pay the expected claims of the year. In this way the insurance company could quote you a price that would only cover their administrative costs, which might be 65%-75% of the real quote, and then add the fee onto that. When you compare prices, you would not be able to find the cheapest quote because of this large percentage that was unknown. The companies that were in fact the cheapest would tell you this missing bit. This might make these companies seem more expensive.

      In the end there is no reason for a telco not to quote the actual money the customer will have to pay everyone month. It is generally going to be the same for all providersin a region.. In fact, them not doing this is costing the major telcos business. The smaller companies are doing one of two things. Everyone knows how much they pay for the land line every month, but not everyone know how much basic service costs. The small telcos are taking advantage of this. Some telcos are targeting the good customer looking to save a few bucks. These are quoting basic service that is one or two dollars cheaper the the major telco, but are doing it in such a way that it looks like this is all the customer will have to pay, therefore making the service appear much cheaper than it is. Other telcos are targeting the customers that don't always pay their bills. These companies set their basic service charge to the average amount the customer would pay at the major telco, and then add taxes on top of that. They advertise in such a way that it looks like the customer would be paying the same as if they went with the major telco.

      Clearly it is deceptive and we should not tolerate it. If Walmart charged a two dollar store use fee on every transaction, fewer people would shop there.

  • by caffeineboy ( 44704 ) <skidmore.22 @ o s u . edu> on Saturday May 15, 2004 @11:36PM (#9164877)
    It seems that the real issue there is that the charges are named strangely. This is certainly nothing new.

    I remember the first AT&T local service bill - charges like 'line charge' and 'access charge'... Why these are itemized on a bill makes no sense to me.

    Even worse are medical bills. I got a bill with 25 different charges that looked like LOCKBOX 54345333453345 - $45.55. Why even break it down? It would be nice if there were some kind of 'transparency in billing' law that required bills to make some kind of dang sense.

  • the latest example of telephone companies passing their own cost of doing business to customers

    Oh good lord. All companies pass their cost of doing business on to the customer. Put down your copy of the Communist Manifesto and step away from it slowly. Companies don't pay for operating expenses, taxes, payroll, or anything else. It all ultimately comes out of the pocket of their customers. Or do you think these companies stole their money from leprechauns?
    • Thank you for a bit of reason.

      Operating expenses, taxes, payroll, raw materials, building and equiptment depreciation, or anything else is actually the cost of putting something "on the shelf" for purchase. This is the operating expense that is deducted from the gross to leave profit.
  • by Anonymous Coward
    In other news:
    • Pope Catholic.
    • Politician lies.
    • Bear shits in woods
    • Frog's ass watertight.
  • Itemized Bills (Score:5, Insightful)

    by Fiz Ocelot ( 642698 ) <baelzharon@gmaiF ... m minus language> on Saturday May 15, 2004 @11:41PM (#9164900)
    Just a thought, I bet if all of our bills for everything we buy were entirely itemized, we'd be quite outraged about these things a lot more often.

    Simple example: What if Starbucks showed the actual cost of making that cup of coffee on the bill seperate from the markup at the register? People already know they're very expensive, but if they "really" saw it things would be different.

    Now there is a lot of information you can get if you do some research into the company financial reports, but your average person is not going to do that.

  • by s.fontinalis ( 580601 ) on Saturday May 15, 2004 @11:42PM (#9164903)
    "New York State has collected $440 million since 1991 in special taxes on cellphones. But only about $30 million of that has gone to the program named on most cellphone bills as the purpose of the tax: enhanced 911 service, which can help police, fire and ambulance dispatchers locate a cellphone caller in need of emergency help"

    http://www.nytimes.com/2004/05/10/nyregion/10pho ne .html
  • by jbs0902 ( 566885 ) on Saturday May 15, 2004 @11:42PM (#9164906)
    companies passing their own cost of doing business to customers

    You have to be kidding me!

    Every company in the entire world since the beginning of time has tried to do this. Even St. Thomas Aquinas thought passing your cost of business on to your customers was OK. And, Thomas was the champion of the idea that a merchant should charge only just enough to cover his labor expenses (sacrifices).

    The complaint that "companies pass their cost of business along" is the same as arguing that either (a) the company owes you something, and you should get something for nothing, or (b) the company's charges to you should be totally arbitrary and capricious and have nothing to do with want the service costs to provide. I'll admit that the cost-plus model of pricing is just a starting point, but the cost of goods usually sets the floor as to the price of the good.

    From the article:
    In truth, many of the surcharges like those imposed this year by DSL and wireless providers reflect real costs related to each company's compliance and payments in support of government-mandated "public goods."

    So, these really are costs imposed by the government (i.e. taxes). The telco companies have just made the decision to let the customer know how much the government regulation is adding to the cost of the phone service. I fail to see how this is different from advertising the price of your goods non-inclusive of sales tax.

    Is the argument against this that people should not know how much their government charges them in taxes? Granted the "tax included" pricing philosophy is easier to budget for, and I assume that is the "moral outrage" that the price you agreed to isn't what you are charged, but the rest is effectively sales taxes. It is annoying but talk to your government about it.

    • The telcos can still itemize all they want IF they tell people what they are doing. But they aren't, they are tacking on all these charges after the fact and not including them in the prices they advertize. This is different than sales tax in that sales tax is the same for all goods in the same catagory and doesn't vary from company to company.

    • I fail to see how this is different from advertising the price of your goods non-inclusive of sales tax

      The difference is that the state government charging the sales tax doesn't let the company charge whatever they think is "reasonable" for a sales tax. The sales tax rate is the same across all companies in a given area.

      Because of this, a customer can easily compare the prices from, say, Fry's and Best Buy. If Fry's advertises $18 for a DVD, and Best Buy charges $20 for the same DVD, I know the DVD

    • Ya know, you start with 'you've got to be kidding me' but you seem to have halfway figured things out after a few paragraphs of typing.

      Companies are advertising one price and charging another. Sometimes these extra fees are taxes and some times they are just designed to look like them so folks don't argue. If companies want to send notes to their customers telling them how much of the cost on their phone is taxes, wonderful. But it's dishonest for companies to collect more money than the advertised price,
  • The courts.... (Score:5, Interesting)

    by InnovativeCX ( 538638 ) on Saturday May 15, 2004 @11:48PM (#9164923)

    Several others have posted comments regarding the legality of such fees and the deception surrounding them. Not a lawyer, and I don't understand exactly where the line is drawn, but I can tell you that a lawsuit would hold up. Case in point: Verizon.

    I'll be the first to come out against the obesity lawsuits against McDonalds -- Frivolous court-clogging litigation ranks quite highly on my list of pet peeves. By that token, suing your wireless carrier to recoup $2.93 per month to the tune of legal fees, court costs, and simply the time involved would be quite outrageous. However, were I to take up such a matter, it would be not for the money involved, but for the principle. I've no problem with a corporation recovering extra costs due to the imposition of federal fees and standards from consumers assuming such fees are small and reasonable. I do not appreciate being lied to or otherwise misled -- it is one thing to pass costs back onto the customer, but quite another to masquerade a cost as a state or federal mandatory tax.

    In any case, Verizon made this mistake. I never had much of a problem with receiving a $40.21 bill for my $36 plan sans overage -- I've more or less accepted that I'm going to get screwed over no matter what. Apparently a few were a little more upset than I; in November, I received notification that I was part of a class-action lawsuit of fellow customers against Verizon and its affiliates dating back to 1993. Due to their engagement in such practices, the company has been ordered to pay these customers something like $20, offer free text messaging, or free wireless web for a period of time. Nothing required to claim it either...apparently it is all automatic.

    So, as silly of an idea as a lawsuit may seem, litigation seems to be a viable option, assuming you have an incredible amount of free time on your hands and are bothered by such deceptive practices enough to take the issue upon yourself.

    Of course, knowing T-Mobile, I'd be more likely to go after them for their lack of coverage or decent service than slight-overbilling ;-).


  • Headline. (Score:3, Insightful)

    by Raven42rac ( 448205 ) * on Saturday May 15, 2004 @11:49PM (#9164928)
    Instead of "Telecom Carriers Use Deceptive Advertising", shouldn't the headline read "Telecom Carriers Use Deceptive Billing "?
  • Why is this here? (Score:5, Insightful)

    by BCW2 ( 168187 ) on Sunday May 16, 2004 @12:14AM (#9165009) Journal
    1. There is a difference between advertising and billing.
    2. All advertisments are lies to one extent or another. Some are smooth and some hit like a sledghammer.
    3. 99.9% of prices advertised are before sales tax.

    Add the fact that telephone companies (cell or landline) are the worst at this of any industry. Hell, they make electric and cable TV companies look honest, and most of us know better.

    Why is this news? It's just business as usual in the good ol US of A.

  • That's my favorite one. It's just a matter of false advertising, where the true price is not what the customers think they are buying. It isn't uncommon for fees and taxes to make up 20% of a bill, which is just immoral.
  • TracFone (Score:2, Informative)

    by kmsigel ( 306018 ) *
    I use a great cell phone service called TracFone (www.tracfone.com). I pay $95 per year (yes, year!) for 150 minutes. They often run specials where you can get another 100 minutes free. If you refer a friend you get 100 minutes free (and so does the friend). If you need more minutes you can buy them for ~20 cents a minute or less. This includes all taxes. No hidden fees. No surcharges. Minutes roll over to the next year if you don't use them.

    I suspect that traditional cell phone plans are good for very hig
    • I pay $95 per year (yes, year!) for 150 minutes. [snip] Minutes roll over to the next year if you don't use them.

      1980 called, and they want their cellular plan back. Am I misreading, or are you paying $95 for 150 minutes to use over a year's time? 2.9 minutes a month for $7.91 a month, and you call that a great cell phone service?

      Please tell me that you meant to say you're paying $95/year for 150 minutes/month. Even at that, you can get twenty times the minutes for about four times as much. And if you don'

  • Hmm... is Slashdot headed towards simple, concise headlines which state things which are completely obvious to any human with more CPU power than a raddish? Here are some suggestions, if that is the case:

    1. SCO pursuing meritless litigation.

    2. A robot will replace you in 6 years; awesome!

    3. Darl McBride Paternity Test Result: Satan

    4. An Indian will replace you in 6 months; outsourcing must be stopped.

    5. RIAA Extorts Money From Filesharers

    6. Survey: Mac users have overwhelming desire to fsck Steve Jobs
  • by valmont ( 3573 ) on Sunday May 16, 2004 @12:25AM (#9165042) Homepage Journal

    Every month i get a picture of Catherine Zeta-Jones with my mobile phone bill. As far as i'm concerned they could charge me another $20, I wouldn't peep. Rename it to Catherine fee. She's like the most beautiful woman on the planet *and* I get her in the mail every month! OMG.

    Joking aside, i'm insanely happy with the t-mobile service. I've found their customer service stellar and the deal i have is pretty sweet: 1000 anytime minutes + unlimited nights and weekends: $40/month. I'm shellin' another $10/month for unlimited t-zones, which gives me unlimited texting, email sending/receiving (pictures, sounds and all), basically unlimited data transfer.

    anyhoo. Go Catherine! :D

  • by mabu ( 178417 ) on Sunday May 16, 2004 @12:28AM (#9165048)
    One thing that blows me away. Sprint does this; I wouldn't be surprised if other carriers do as well, but when I get my statement, I get a list of the phone calls and time used, but I don't get a total. No total of minutes?? WTF is that? It seems like this is an obvious attempt to keep you from looking at whether or not your total monthly usage would make a different plan more economical. Now maybe you can hit some buttons on your phone and get totals, I don't know, but it seems ridiculous for a carrier to list all your calls, yet not sum it all up in a total!
  • by geminidomino ( 614729 ) on Sunday May 16, 2004 @12:32AM (#9165062) Journal
    Axis powers surrender to the Allies.

    Water found to be wet.

    Dewey beats Truman.
  • Silver lining... (Score:3, Interesting)

    by crazyhorse44 ( 242315 ) on Sunday May 16, 2004 @02:11AM (#9165334)
    some people have reported that you may be able to use a fee hike to your advantage. since it is a modification to your existing contract, you may be able to reject the fee and have your contract cancelled without paying an early termination fee. YMMV
  • by IronChef ( 164482 ) on Sunday May 16, 2004 @03:16AM (#9165525)
    I used to run a small business. I remember one bizarre conversation that I had with my accountant at our first tax time...

    ME: So we don't have to pay a tax on that then?
    ACCOUNTANT: Right.
    ME: So what's this big fee, payable to the government, that you have calculated?
    ACCOUNTANT: That's not a tax. That's a levy.

    Oh, it's not a tax, it's a LEVY! I feel so much better... Let me sign the check.

    [Your blood pressure just went up.]
  • by GumphMaster ( 772693 ) on Sunday May 16, 2004 @04:14AM (#9165658)
    I assume I'm not the only one that visited the original article site and was presented with a pop-up ad for NextTel when they left :)

    Expect NexTel to be adding two more "taxes":
    1. Coercion Misdirection Levy - for ads served to people after reading an article explaining how the company jacks up profits under the guise of "taxation".
    2. Geographic Locale Fee - for ads served to people they can't service (I'm in Australia).

"Conversion, fastidious Goddess, loves blood better than brick, and feasts most subtly on the human will." -- Virginia Woolf, "Mrs. Dalloway"