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Stealth Inflation
prostoalex writes "The New York Times on the Web explores the topic of incorrect bills and numerous surcharges with names like 'assessment', 'handling', 'restocking', etc. David Pogue quotes Business Week magazine, where it says that such small charges $100 million annually for hotels, $2 billion for banks and $11 billion for credit-card companies. Users of landline phones, cell phones, checking accounts and credit cards are starting to suspect that such huge revenue might imply the mistakes are made on purpose. Is it just another conspiracy theory, or are we becoming victims to the stealth inflation?"
How about physicians? I had a couple appointments with my family doctor to regulate my blood pressure... At one of the earlier appointments she took an EKG. Being 24 and never having one before I wanted it explained to me. She spent 2 or 3 minutes (and I am being loose here with the timeframe, it was only as long as it took me to put on my jacket and hat) explaining the peaks and what she thought they meant.
.02,
Out the door I went into the world to get a new prescription filled and pay my co-pay...
A few weeks pass and the bill from the doctor's office comes showing what the insurance company paid, etc, and that I owed $5. No biggy, pretty typical. I did see that she charged my insurance company $103 for an "EKG Consultation Fee". Call me insane but there is absolutely no way she had the right to charge $103 for a 2 minute deal.
I went in the next time and not so calmly explained to her that she will not do that again without a) telling me what she is going to later charge, b) lying about what she was really doing, and c) being a cheat.
We wonder why insurance costs so much... It's because of hidden fees and bullshit that the medical industry decides to make a quick buck on.
That doctor made as much in 2 minutes as I do in 6 hours at work... She will NOT fleece me again like that... To those of you that say, "who cares, your insurance covered it." I say that my insurance co-pays just went up and they probably won't stop there. I am not going to stand idly by and watch this shit go down and you shouldn't either.
How about my bank? TCF here in Minnesota. I *pay* for their advanced online banking service (it's just like any other free service I have had before but it shows all the transactions immediately unlike their free version which just shows a balance). I started noticing that I was being charged for using out of network ATMs when I wasn't using them. I had four $6 charges in a six week period. I had to call them each time and get them removed. It wasn't an issue to get it removed it was the unsettling feeling that other people out there that don't have the advanced online banking are getting ripped off, a lot.
Sad state of affairs these days...
Just my worthless
Is it just another conspiracy theory, or are we becoming victims to the stealth inflation?
Yes, in that order.
Next week: Ninja Tax!
When anger rises, think of the consequences.
Confucius (551 BC - 479 BC)
Inflation hasn't only gone up because of things like this, but because of the increasing dollar amount of taxes being subtracted from paychecks. Even if your paycheck is the same as 10 years ago, your take-home pay is very likely less. These surcharges are yet another way that make you think you're making the same amount - when really, you're making less and less, every day.
Maybe I'm REALLY paranoid, but I figured it was intentional long ago, and have since merely accepted it. Since when does "handling" in the shipping and handling for a two pound item justify an extra $10 expense? Online, I've taken to shopping where I can get free shipping. It feels more honest, and I like making the statement that I appreciate it.
Damon,
http://actionPlant.com
It all started with adding the sales tax to an item's advertised price to make up the real cost to purchase it.
That still annoys me.
sigs, as if you care.
This shouldn't really be a surprise unless you still believe in the essential goodness of humankind (!)
It's a simple-enough risk calculation - how much will I gain by people not noticing or not bothering for $xxx, how much will I lose by annoying customers. If that comes out positive, it's a good business (and only business) decision to do it. You'd need to re-analyse the figures periodically, and figure in public opinion when news breaks like this, but essentially it's money for nothing.
So, why are we surprised ?
Simon.
Physicists get Hadrons!
Now I doubt that the companies intentionally make the mistakes in order to extract more money from the customer...
Now that being said, I think that the companies intentionally do make extra charges all around and hide them intricately in deals as they see there. It wasnt 800 minutes but 700 plus 100 minutes. Now no one in the world is going to ask about that. I know to ask about extra hidden charges, but no that.
I think that the companies then through the complication of such systems easily profit from mistakes related to calculating the charges and fees. And they are not going to do anything to fix such errors.
So the question remains by not doing anything is that the same as actually cheating the customer... This client says YES.
30% Troll, 50% Underrated, 10% Interesting
Score:5, Troll
I'm sure its all accidental .. and the fact that the charges are never in the consumers favor is a mere coincidence.
Of course sales of 'random billing error' plugin modules are skyrocketing! ... again, coincidence
It's sad that when people tell horror stories, others reply, "Yeah, that's about normal." We should not sit idly by while companies continue to 'mistakenly' swindle consumers out of money. I have personally spent countless hours fighting with RCN (a cable/phone/internet) company to refund $182.91 that they owe me. The full story is available at my RCN sucks page. I've had to resort to telling my credit card company to refuse payment, because RCN still refuses to return the money they owe me.
I'd be inclined to agree, at least some of these ridiculous surcharges are deliberate. Recently, I purchased some DDR Ram, for which they tried to charge me extra to test it. When it arrived, I installed it, and my machine did nothing at all. I got the RMA, and sent it back for refund - they told me I'd get the "restocking" fee.
Thankfully, I'd used VISA to buy it, and complained to my bank, which refunded it in toto. The company did, eventually, issue me a credit - not only did they take out their "restocking" fee, but charged me to test it when it got there, *and* then credited me based on the current price of the ram, not what I'd paid!
Thank heaven for VISA. I did get *all* my money back (had to let the bank take the pitiful excuse for a refund that the company issued).
So yes, these "hidden" charges are, in at least some cases, the way companies can increase their profit margins. Caveat emptor, indeed!
Lemon curry?
In California a year or three ago one of the major grocery store chains was slapped with a class action lawsuit and lost, IIRC. They were just ringing items up slightly wrong, like collard greens as the more expensive kale (happened to me. Twice. I don't shop at that chain anymore) or $.99 instead of $.79 for misc. food in a can, small stuff, stuff you probably don't notice 99% of the time. Spread it out across a year, they could screw customers out of maybe $100 each. Multiply that by however many people you've got buying groceries at your stores and that's a lot of "revenue."
- CALIFORNIA CODES
The beauty (or horror, depending on your perspective) is the "unfair" part. What was not technically illegal in the past may now be sued for if it is "unfair."BUSINESS AND PROFESSIONS CODE
SECTION 17200
17200. As used in this chapter, unfair competition shall mean and
include any unlawful, unfair or fraudulent business act or practice
and unfair, deceptive, untrue or misleading advertising and any act
prohibited by Chapter 1 (commencing with Section 17500) of Part 3 of
Division 7 of the Business and Professions Code.
Next case, hidden bank and ATM fees...
Slashdot "libertarians": Small government for me, big government for those I disagree with. -1, I disagree with you
Assume a background of random errors. Now in usual circumstances, clients are able to fix mistakes quickly: if someone overcharges in a shop, or if you get shoddy goods or service, it's easy to complain and get your money back. As more and more sales get done online, as credit card statements get longer and more complex, as suppliers get futher and further away, we will see the less disciplined suppliers making more profit.
Example: the company I use for registering domain names made a mistake and charged for a domain name that was actually not available. Now, after some hours of trying to get service, I just let it fall. Hours' work to get $35 back is just not worthwhile. I'm not even annoyed with the company, it's my choice to let it slide.
So, over time, there will be an inflation in the greyness of transactions, ironically quite the reverse of what you'd expect from a more and more automated system.
Haha, this gives me a terrible idea. In decades from now, I guess we'll have shifted to a system whereby basic consumables are paid by taxes levied on our level of income. Much simpler and eventually the same result. Think RIAA taxes, but on the entire arena of consumer products.
OK, sorry, ruined your evening.
Ceci n'est pas une signature
Back in the 80's my mom used to record _all_ of her long distance calls and numbers on the calendar next to the phone (having only one phone, and little kids who didn't use it helped) and every few bills they'd try and screw us out of 50 cents to a dollar. After 2 years of calling up and screaming she started going into the main office and grumping in person, demanding the manager etc. After a couple of those and proof that we weren't home on days when calls were billed our bill mysteriously quit having problems and has been that way for the last 15 years.
I have to point out on my new Sprint bill, there is a $2.50 charge A MONTH for Number Portability, should I ever decide to change to another carrier. I know they had said it would be a reasonable fee, but that is outragous. Multiply that $2.50 per customer, per month, and that's one HELL of a profit. Sure would love to start a movement to blow that scam out of the water...
Mine means my own, but how can this be if I owe for it?
When it comes to money (specifically, other people getting their hands on yours), everything is done on purpose. Everything. People will do anything they need to do, and will fight harder for money than they will for their own lives. Haven't you figured that out by now?
Use Ctrl-C instead of ESC in Vim!
I used to work for an outsource bank data processor. We had a customer who required us to apply debits before credits because it generated more fees that way.
Not all banks did this, and it wasn't standard practice (at the time -- don't know now). It was odd enough that it was the talk of our company for a couple of weeks.
I've noticed this for years and its gotten entirely out of hand. I am now forced to ask people stupid questions like "How much does the $19.95 a day truck cost?" I was shocked to find out that at UHaul it actually cost 19.95 plus mileage.
I refuse to get phone service because of this, cell or otherwise. It is insane that the priveledge of using over 100 year old technology to talk to people costs on order of 1/2 the amount to power my house for a month.
I pay over $1,600 dollars a year in taxes for my house which is in a city. I always thought that city == trash pickup because of said taxes. Nope, they charge me 15 bucks a month on my water bill for trash, plus 4 dollars "maintence" on the sewer systems. I dunno what the sewer charge is for.
The only way that this is going to stop is if people stop paying for it. I have asked hotels to take off the safe charge.
Back to the phone thing. I promptly canceled my last phone after the 12.95 a month phone cost me over $26 (yes thats double!). I told them that it was deceitful and false advertising and under no circumstances was I goint to pay that, and I have been without a phone for 6 months or so (my work does pay for a cell, so I'm not that hardcore). This phone thing really pissed me off because it was a switch of providers that I agreed to because it was going to save me $10 a month. Being that I was writing a check for over $26 before and after, I do not see how I was saving anything. These extra costs make price comparison imposible and I think that it should be illegal.
I am married and my wife raises the kids and manages the home. She also does the bills. We try to do as much electronic commerce as we can, and pay our bills online. Since she knows very well what our expenses ought to be, and has access to detailed statements online and time to go over them, she finds things constantly. Mostly it is just random stuff where you say "wtf?" and make a phone call to get your bill adjusted. But we had a real dust-up with [cell phone service starting with S] over our family cell phone plan, where they were charging us hundreds of dollars extra on our phone bill for months on end. Every month we knew we would have to call them to get $100-$400 worth of charges removed, 8 hour calls to places we never even heard of, totally off the wall. Finally they "fixed" it and we have not been troubled for over a year. If we had not annoyed them so furiously for most of a year before, would our billing ever have straightened itself out? Not on your life! But what in the world actually *changed* in their system to shield us from bogosity I could not tell you!
I am dead certain that most (if not all) [cell phone service starting with S] customers are being overbilled on their mobile phone usage just as we were, and I suppose [cell phone service starting with S] spends a lot of time adjusting bills. There must be some really horrendous software blackhole in their billing system that gravitationally slings stray phone charges all over the database like so many loose asteriods.
Why we sucked up so many nasty stray bits remains a mystery. Were they testing us because we were new with a one year lockin? Rather more a mystery is how it stopped. I can tell you *why* it stopped, and it was because of my wife. So they have control of some kind, which they exercise at need.
What makes you reach for the tinfoil hat is the thought that maybe they don't "fix" the problem at the core because as a business matter it makes them money. Someone did the math and elected to a) invest less in expensive engineers doing process debugging, b) spend a little hiring low-paid phone jockies in Nevada to debate billing issues with irate customers, and 3) scrape off whatever is not adjusted as easy money.
It is the lure of easy money, and avoidance of hard work, that creates this nonsense. Now that we have transferable mobile numbers let's see how long it takes service providers to clean up their act. And, let's see if honest billing impacts the bottom line.
=^..^= all your rodent are belong to us
Last month I visited a friend in North Carolina and rented a car. When we returned the car there were all sorts of fees with names like "Airport Surcharge Recovery Fee", "County Mandated Foo Fee", etc. The fees and taxes added up to roughly an additional 30%.
.
I have mixed feelings on this. On one hand I like it when the government tax gouging is made obvious. On the other hand I want things to be standard from place to place.
What lots of companies have been doing (hotels, car rental firms, and telcos are among the worst), is to make their prices look lower by "converting" a bunch of their overhead to "fees" that get tacked onto the bill (always phrased to sound like taxes but often including the overhead of handling the supposed manditory tax)
It's like buying a cup of coffee for $0.30 but going to the cash register and finding your receipt reading:
Coffee: $0.30
Property tax recovery fee: $0.10
Business license recovery charge: $0.02
Government mandated workers compensation surcharge: $0.25
Health board inspection fee: $0.08
Employee income tax recovery charge: $0.35
Corporate tax surcharge: $0.20
Sales tax: $0.05
City waste disposal charge: $0.15
That will be $1.50, sir.
As an aside, in a country where one of the rallying cries was "No taxation without representation" our politicians try to subvert that wherever possible. The prime example is outrageous hotel room taxes. Soak the tourists, they won't be able to vote against me.
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"You are not remembered for doing what is expected of you." - Atul Chitnis