(Mis)Uses of Technology

by Mike Masnick

Price-Increases-As-Fees Start To Spread

from the they're-everywhere... dept

While extra unexplained "fees" are pretty common in the phone world, they're now moving over to the broadband side of the house. Broadband Reports has an opinion piece looking at the various fees found in your broadband bill, and how many of them really are (as you suspected) simply a way to raise the price without making an official price increase. For example, they look at SBC's "regulatory recovery fee" which just so happens to change based on the tier of service you're signed up to use. Of course, what SBC pays the government is fixed per circuit, so if they have to charge a fee, it should be constant. Plenty of other fees are clearly just a sneaky way of hiding cost increases, so they can advertise a lower price. As we noted recently, it's only a matter of time until such pricing structures are found in other businesses. Most business simply include the costs of doing business in the price they offer customers. Breaking out extra pieces and not telling the customer until after they've signed up is simply a way of tricking customers. How would you feel if the pizza you bought, in addition to the sales tax you pay, came with a property tax assessment fee, a electricity bill adjustment fee and a new dough delivery fee? These are all expenses that the pizza place has, but you expect them to be included in the advertised price, not tacked on at the end, only after you've agreed to buy the pie.

Reader Comments (rss)

(Flattened / Threaded)

  1. identicon
    TJ, Oct 5th, 2004 @ 5:08pm

    Shun them

    Whenever possible I refuse to do business with companies that do this. Wherever there is competition it will make a difference if enough of us do so. That's the beauty of the free market. It it won't stop monopolies like telco's of course, but land line telco's are dying anyway, and blunty, f*ck 'em!

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

  2. identicon
    Steve Mueller, Oct 5th, 2004 @ 11:25pm

    Disclosing Fees

    Actually, I appreciate seeing how the final cost of my bill is arrived at. That allows me to see exactly where I'm being gouged.

    However, I think that if the company advertises a service or somebody asks the price, they should be quoted the total price including any fixed fees. Fees based on other fees should be disclosed as percentages; fees based on usage should have their basis disclosed ($0.05 per minute, $10 per gigabyte, etc.) -- and not in fine print.

    I personally called Charter Communications asking for explanations of fees (PEG Recovery fees). They also explained that franchise fees were capped by law at 5%, and I saw that I was being charged 5.4%, so I raised some hell. We'll see what happens.

    My wife works for a travel agency that assesses a $25 fee for airline tickets ever since the airlines stopped paying commission. When people ask for the price of a ticket, she includes the fee in the price (and I think she discloses the fee, too).

    Of course, let's not blame just the communications industry here. The travel industry has their share of fees, too. Hotels have transient taxes (usually signficantly higher than sales taxes) and often required phone fees that they don't disclose in the price, airlines have airport fees that aren't listed in the fare, cruise lines have port taxes that aren't included in the price and so on.

    And let's not forget car dealers with their title, tax, destination, blah blah blah fees.

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

  3. identicon
    Philip, Oct 6th, 2004 @ 11:42am

    Price-Increases-As-Fees Start To Spread

    I have been subscribing to DSL from SBC for over a year now. When I first subscribed to DSL the advertised price was $29.99. On my bill the price was $29.99 and it included a federal tax. When my one year subscription was up, SBC advertised DSL for $26.99. So I re-subscribed. When I got my new bill the price of DSL is $26.99 but there was an additionl tax of $3. Duh $26.99 + $3.00 = $29.99. The exact same price as before but SBC was able to advertise a lower price.

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

  4. identicon
    Gregg, Oct 6th, 2004 @ 12:38pm

    Re: Disclosing Fees

    Let's not forget car rental agencies...

    Airport concession fee recovery: 10.00 %
    Vehicle licensing fee: $5.04 USD
    Customer facility charge: $29.25 USD

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

  5. identicon
    thecaptain, Oct 6th, 2004 @ 5:38pm

    Re: Disclosing Fees

    what the hell is a customer facility charge? Paying to make the customer's life easier? A customer paying to have a room to stand in line in?

    Someone should go around and add up all these fees and you'd see exactly how much corporations gouge out of the consumer, laughing all the way to the bank.

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

  6. identicon
    James Last, Jan 16th, 2008 @ 12:19pm

    Re: Disclosing Fees

    Or what about the 'convenience fees' that some government agencies charge you for using a credit card. My county property tax collector charges $75 for the convenience to pay by credit card.

    I'll send that good old check, have fun with it.

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

  7. identicon
    Tim, Feb 2nd, 2008 @ 1:55pm

    Re: Re: Disclosing Fees

    Actually, that's the charge that the credit card company charges them. Most retailers just raise their prices slightly, but the government isn't allowed to pass the charge for using the credit card on to other people who pay by cash or check.

    For instance, my rewards credit card costs the average retailer $.25 just to swipe (whether or not they approve it) and 3% of each transaction. If I were paying my property taxes with it, that would come out to more than $75...


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

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