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Telecom Carriers Use Deceptive Advertising
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."
There are no taxes on businesses - All taxes are passed on to their customers. Telecoms just are kind enough to itemize it.
A fine is a tax you pay for doing wrong and a tax is a fine you pay for doing all right.
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.
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.
A fine is a tax you pay for doing wrong and a tax is a fine you pay for doing all right.
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.
Tom
Someday, I'll have a real sig.
No one is saying they shouldn't make money.
The gripe is that they are using the old bait and switch tactic, by disguising extra fees as taxes.
So instead of advertising a plan for $50/month + tax...its actually $40/month + tax + B.S. charges.
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.
But they don't include those fees in their TV, radio or print ads, do they?
THAT is what upsets people.
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.
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.
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?
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.
Professional Politicians are not the solution, they ARE the problem.
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.
Come test your mettle in the world of Alter Aeon!
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.
... without reliance upon the assholes in the legislature.
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
[You have a stable society when some nut guns down a schoolyard and the law doesn't change.]