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Telecom Carriers Use Deceptive Advertising

Posted by ryuzaki0 on from the sleaze-and-fees dept.

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."

4 of 285 comments (clear)

  1. Deceptive, not illegal by CptChipJew · · Score: 5, Interesting

    Although these tactics could be seen as immoral and lame, it doesn't look like they're actually breaking any laws. From the article, "Actually, T-Mobile's monthly charge of 86 cents is among the more clearly labeled.". As well, "though thankfully there's at least a footnote below owning up to the fees as Nextel's doing."

    Like EULAs, they are taking advantage of the fact that nobody reads them.

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    Vonal Declosion
    1. Re:Deceptive, not illegal by LostCluster · · Score: 5, Interesting

      For the record, the FCC's FAQ on the issue states very clearly that the USF is an obligation of the telecom carrier that they're allowed to shift onto their consumers, but they clearly don't have to.

      So, basically, this is just a way for them to itemize it like it's a tax, when really its a tax on the telecom company rather than one on the consumer at the point of sale.

      Just like the IDT ads claim, the big guys even try to pass their own property taxes off to the consumers by a fee.

  2. Re:Five cents turns into 16.37 cents? by Marillion · · Score: 5, Interesting
    I've heard people call it "Stealth Inflation." Real Prices have been rising for a while, but Advertised Prices haven't.

    Another example is airline's fuel surcharge.

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  3. Some of these percentages are pretty high too! by acadiel · · Score: 5, Interesting

    Looking at my last Nextel bill: Wife's phone plan charge was $17.59. "Taxes" were $6.66 to bring the total to $24.25. That's 37% in taxes. The * ones ("Fees Nextel elects to collect to recover its costs of funding and complying with Gov't mandates and initiatives") were $3.11, or a grand total of almost 18% of my wife's bill.

    To break it down, the Federal TRS charge was only 0.073% (0.01). The Univ Serv Assessment was 1.25% (0.27). The Cost program recovery fee was a flat $2.83.

    My account plan rate was $47.54. Taxes were $10.98 to bring the total to $58.52. That's 23% in taxes. The * ones were: TRS Charge: 0.073% (0.04), Univ Serv Assessment 1.25% (0.65) and Cost recovery fee ($2.83). Result? $3.52 in these charges, or only 7% of my bill.


    What makes me sick is this:

    I was paying $65.13 a month to Nextel plus a total of $17.64 in taxes and fees. (A 27% tax rate!!!!).

    Take my last Cingular bill (I just switched). My monthly service charges were $47.97. The fees on the account were $6.52 on the line with a $38.98 charge, and $2.71 on the line with the $8.99 charge. That's only 19%! Cingular charged me 17% on one line and 30% on the other (well, the second one is skewed since it only has a $8.99 plan.)

    Cingular charged me only $1.07 for the Federal USF, and 0.60 for the "Cost Recovery Fee". The rest was a Federal/State and 911 tax. On the other phone, they charged me .25 for the USF and 0.60 for the Regulatory cost fee.

    I find it real sneaky how these providers are doing this.....