Stealth Inflation: Checking Your Bill For A New Charge Called Oops

from the sneaky,-sneaky dept

We’ve had plenty of posts recently about all the extra hidden fees that show up on phone bills, credit card statements, bank statements, etc. These are often named to look as though they’re required by the government, when the truth is anything but that. The amount of money such fees generate is staggering: “$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” according to this article in the NY Times, which refers to such tactics as stage one of “stealth inflation.” What’s stage two? It’s all of the billing mistakes these companies make – which always seem to end up in their favor. Everybody, it seems, has stories of companies incorrectly billing them, and having to waste endless hours on the phone clearing up the charges. The article suggests it’s a sneaky way of getting more out of customers, but the companies (of course) deny it – pointing out that it costs them much more to handle the customer complaints and corrections. Of course, that’s only true if the customer notices the mistake – and, as someone point out, if it’s just a random error, wouldn’t there be just as many in the end-users’ favor? While it is tempting to believe that there’s a grand conspiracy out there, my guess is that it’s simply bad processes in most cases, as poorly trained workers with bad systems just do whatever they can, and don’t really care about fixing mistakes as they make them – and the systems aren’t designed to catch these mistakes themselves, unless they go in the wrong direction.

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Comments on “Stealth Inflation: Checking Your Bill For A New Charge Called Oops”

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Anonymous Coward says:

Maybe no conspiracy

I’ll give my bank and phone company the benefit of the doubt. It’s very rare that such mistakes are made by them.

However, based solely on my experience, I do believe there’s a conpiracy by some health insurance providers. Almost every thing they’ve done on my behalf has had errors in their favor.
“Oh that’s right, you did already pay this years deductible in full. Sorry. Silly computer error.”

I might have believed it the first couple of times, but it’s been a bit too regular a situation.

LittleW0lf says:

Stealth Inflation

From the article, a Sprint representative stated, “…if a customer changes her wireless calling plan and she doesn’t read the terms and conditions of the contract, she might perceive a larger bill to be the result of overbilling, when in fact she never understood the terms of the contract.”

Which kinda alludes to the whole problem with the industry…they certainly don’t go out of their way to actually point out the differences between various plans in a meaningful way, and certainly don’t outline the current costs for the customer. Sure, I’ve heard here and elsewhere the companies whining that they don’t even know what the costs are (which is bull, since I receive a bill each month with the costs on it, so obviously they know what it has cost.)

They don’t need to give all future possible costs that may appear on the bill, just a rough estimate of what the first few bills are going to be (if the gas and electric company can do this, and their costs are actually based mostly on usage, why can’t the phone industry, where costs are usually fixed plus extra usage?)

Then, customers will know exactly what they are getting into when they purchase a plan, and they will be far less likely to complain when their bill doesn’t appear to be the same as what they thought they were getting into. Anything less is poor customer service…and is unacceptable (though I must admit, I wasn’t surprised that Sprint, with one of the worst customer support reputations in the business said this.)

Of course, doing this will likely remove the confusion that most of those “dim-witted corporate officers” want to leave in place, since actually telling the customers exactly what they can expect to pay for the service makes it easier for them to shop around, finding the cheapest deal instead of going with your more expensive plan.

However, instead of actually competing with each other, it is much easier to just make up a number which is less than others, and then gain the profit back through fees such as “Number Portability Service Charge”, a scam which brings in about $2 million a month for the phone companies, since they get to keep the money if you don’t leave, and have made it difficult or impossible for you to leave, and lie about portability of the number anyway, when you move a mile away from your current location and are still using the same switching station, yet your number is not as portable as you were led to believe.

I think the line from an insider, “…But because the way our jobs are structured, we are basically encouraged to ignore the mistakes and make the customer go away…” was pretty much on par with the realities of the business.

Now I am not naive enough to believe that there is a complete conspiracy going on here, though there are a number of telecommunications companies who do not charge for number portability or for “in-house wiring” and yet provide both services for free, and are still in business and thriving. What I think is going on instead, is that companies who are extremely fat (due to poor business planning,) and used to a near-monopoly are suddenly facing open-competition, and are struggling to find any way possible to fix their customers and prices instead of their business process.

Then again, I am a customer with a hugh negative experience with my phone companies, and not an insider…but I really believe the companies are arrogant and incompetent, and would wrather shift the blame (or bite the hand that feeds them,) instead of admitting they have a problem and fixing it.

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