When 60% Of Your Phone Bill Is From Unadvertised Fees

from the seems-a-bit-extreme dept

We've had plenty of stories about phone companies and all of the additional fees they add to your bill, but the Miami Herald has a few examples where the situation clearly goes beyond any reasonable level. Take, for example, a simple plan from BellSouth, advertised at $11.04/month. What they leave is out the extra $16 in fees and taxes (BugMeNot required) that turn the $11 plan into a $27 one. Then, there are companies like Primus which is adding a $15 "low usage" fee for anyone who doesn't make $25 worth of long distance calls per month. The telcos come back with their usual refrain that they somehow "need" to collect this fee "to recoup normal business expenses." That, of course, is a ridiculous statement. Any normal business prices their "normal business expenses" into their advertised prices. This is simply a way for the telcos to advertise lower prices than they're really charging. Perhaps other companies should get into this game as well. Want a pizza pie? It's just $3, but there's a $3.50 "crust fee," a $9.38 "oven fee," a $4.50 "service fee," and a $2.18 "cleanup fee." Plus tax.

Reader Comments (rss)

(Flattened / Threaded)

  1. identicon
    floppy, Sep 20th, 2004 @ 1:27am

    No Subject Given

    I was wondering why in Europe it is not that frequent to have all these hidden costs charged. Is it just a business culture thing or Europeans are more likely to stop paying for something that it is not explicit mentioned in the value proposition once they realise they'd been cheated?

    reply to this | link to this | view in thread ]

  2. identicon
    Pekka, Sep 20th, 2004 @ 2:15am

    Hidden costs

    Are the consumer protection laws so different in the USA? At least here in Finland (and maybe also in the rest of the European Union) it is a law that the price offered to consumers must contains all the costs - in other words, if a price is mentioned you have to get that product or service by paying just the advertised amount.

    reply to this | link to this | view in thread ]

  3. identicon
    gkdada, Sep 20th, 2004 @ 7:03am

    No Subject Given

    The situation is (AFAIK) not nearly as bad in California. What gives? May be the floridans are not as savvy. They just need to get up and revolt against Jeb and his wolf-gang??

    reply to this | link to this | view in thread ]

  4. identicon
    Mark, Sep 20th, 2004 @ 7:04am

    "normal businesses"

    "Any normal business prices their "normal business expenses" into their advertised prices."

    If so, there are fewer and fewer "normal businesses" every day. Of course we already know that rental cars never cost as much as the advertised rate (my car in a recent trip to Hawaii cost nearly $400 above the advertised rate). And the phone plans, as you mention. But the same goes for broadband -- the advertised rate never includes the DSL line fee, and Comcast's advertisements for cable modems only lists the price for the "special promotional period" -- if you want to know what it will cost after that, you have to call their sales department. I think this is the new wave of American marketing. Soon your apartment will cost $200 a month -- plus a few additional fees, of course.

    reply to this | link to this | view in thread ]

  5. identicon
    RJD, Sep 20th, 2004 @ 7:09am

    Can't have it both ways

    I'm not sure what you're grousing about Mike... The cost or the way it's being billed. We american's can't seem to agree on the best way to do things. If I hand you a bill for 30.00 and you think it's too much, you/we say "I want to see a break out of the costs..." yet with the costs broken out, we say this is BS.

    I won't defend the legtimacy of the costs much less the titles they are assigned, however, a business generally needs to coup some cost per customer to remain somewhat profitable (note that phone companies while great cash cows do not generate much profit consider their huge bottom line). As long as there's some competition between the companies the cost should be competitive. The phone companies pretty much have their hands tied by federal and local governments so they have to be creative when offering plans and in their billing.

    The alternative is to get out of the business and I don't think the country is ready to start letting their phone companies pack up tent.

    For the record; I curse, swear, and roll my eyes at the costs I see on my phone bill as much as the next person. I also know I can go elsewhere if I don't like it.

    reply to this | link to this | view in thread ]

  6. identicon
    Bob, Sep 20th, 2004 @ 7:57am

    Institutionalized lying

    I had to explain to a phone sales person the other day that they were trying to deceive me. How could they sleep at night while their job was to lie to people and cheat them.
    They were trying to convince me that my phone bill was higher than the service they were trying to sell me. Don't you also have taxes and fees?

    The lies from the phone companies demonstartes their lack of customer awareness. As a customer I want to know the price as how much I will pay. It is really not important to me to know how much the phone company will get! That is their problem.
    The reasons why a company would trash customers in this way:
    1) they hate customers
    2) they have no problem with lies
    3) they are evil
    4) they don't realize that their monay comes from customers

    reply to this | link to this | view in thread ]

  7. identicon
    Anonymous Coward, Sep 20th, 2004 @ 8:37am

    Re: Institutionalized lying

    One Word:


    reply to this | link to this | view in thread ]

  8. icon
    Mike (profile), Sep 20th, 2004 @ 8:52am

    Re: Can't have it both ways

    I'm not sure what you're grousing about Mike... The cost or the way it's being billed.

    I thought it was pretty clearly about the way it's being advertised that bugs me. If the bill is going to be $27, they shouldn't be able to advertise it as $11. I have no problem with a company charging what they think is right, but if they're tricking people into signing up a price that isn't what they'll be charged, that's a problem.

    reply to this | link to this | view in thread ]

  9. identicon
    Anonymous Coward, Sep 20th, 2004 @ 11:58am

    Re: Hidden costs

    Are the consumer protection laws so different in the USA?
    In a word, yes. US laws tend to protect the business rather than the consumer.

    reply to this | link to this | view in thread ]

  10. identicon
    Patrick Foarde, Sep 20th, 2004 @ 12:03pm

    Re: Can't have it both ways

    I want to state up front that I am a PR flack and I represent a major carrier.

    That said, I respect peopleís dismay over the garbage fees that pump up their monthly wireless bills. What I donít get is why more people arenít upset with the government and regulatory agencies that impose the mandates that cause these fee hikes. Universal Service Fee, Telephone Relay for the Deaf, number pooling and portability - not taxes by definition - but all mandated by government just the same. Carriers donít have the discretion to say no to these costs (neither do their customers).

    So why arenít these taxes? Ė because they arenít passed back to the government and the carrier isnít required by government to collect them. But, they still have to absorb the cost. As I see it, itís just government forcing business to pay for services government should be providing (or not providing based on oneís political inclinations.)

    And then thereís pure government surcharges. For example, the City of Baltimore charges $3.50 per month per customer Ė just because it can Ė and it needs the money. Itís a nice model for politicians Ė fund services w/o having to ďraise taxes.Ē

    I read all the time that folks want these costs factored into the monthly service fees. To me, that's really hiding the costs. Is there anyone out there that prefers to see these govt. garbage fees line itemed? I do, but thatís just me. It reminds me where I should be directing my disdain.

    As for advertising, should carriers move the tax and mandates line items out of the small print and put them up front with the rate plans? That doesnít seem to be a popular approach for any other industry that has to (or chooses to) tack on garbage fees.

    reply to this | link to this | view in thread ]

  11. identicon
    red_eye, Sep 20th, 2004 @ 12:21pm

    Re: No Subject Given

    California used to have specific protections to prevent such pricing trikery. Example, back when cell phones were just starting to make it big(when a propular cell phone modle was a bag phone and came in a tote the size of a half loaf of bread) it was Illegal in California to advertize a FREE cell phone with MANDITORY service. You had to advertize a REBATE for the phone if you agreed to the service plan. If they had avertized the phone as free (IANAL) as I understand it you could have gotten the pheon free and legally cancelled the service and kept the phone. Now that law has changed and woe for the consumer.

    The problem isnt the advertising, the laws, the lawyers, or the horrific marketing ideas, it is the stinking moronic sheep that accept that this is the way it is and pay for the service.

    reply to this | link to this | view in thread ]

  12. identicon
    Anonymous Coward, Sep 20th, 2004 @ 1:52pm

    Re: Can't have it both ways

    Where would you go? In the California county where I live there is only one telephone service provider, period (and this is not a sparsely populated county, either.) Long distance is different, but I think we're talking about the primary local provider. Phone service is a monopoly here - as are cable and natural gas - so unless I want to actually relocate in order to get a different provider, I'm not sure what you mean by "I can go elsewhere if I don't like it."

    reply to this | link to this | view in thread ]

  13. identicon
    lillian pardo, Jan 28th, 2005 @ 12:05pm

    Re: Can't have it both ways

    please tell me information on phoe bill

    reply to this | link to this | view in thread ]

  14. identicon
    Anonymous Coward, Jun 27th, 2006 @ 10:04am

    A lot of this is done because many customers will make a decision based on the advertised number and mentally lump any additional costs into the same category as sales tax. The companies rely on their customers to either be bad at math (which seems like more and more people are) or to not care.

    The advertised pricing of an item very rarely includes sales tax, with gasoline being one notable exception. This hasn't bothered people and companies view it as outside of their control. The trend continued with governmental fees not being included because the companies "don't have control over those". It has continued to increased with more and more costs being included in the "no control over these" category all in the name of convincing the customer that they're getting a great deal on the costs that the company can "control".

    reply to this | link to this | view in thread ]

  15. identicon
    benspikey, Aug 7th, 2006 @ 2:48pm

    and do what?

    We have no choice pay or be disconnected. Corporations rule America and the lives of the supposed free American.

    reply to this | link to this | view in thread ]

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