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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."

13 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.

    --
    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:Deceptive, not illegal by TykeClone · · Score: 5, Insightful

      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.
    3. Re:Deceptive, not illegal by Anonymous Coward · · Score: 5, Insightful

      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?

    4. Re:Deceptive, not illegal by SagSaw · · Score: 5, Insightful

      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!
  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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    This is a boring sig
  3. Lawsuit by OneIsNotPrime · · Score: 5, Funny

    I would encourage a class action lawsuit, but then l would probably just see this on my bill next month-

    Regulatory Consumer Disloyalty Juris Prudence Fee - $14.86

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    WARNING:Slashdot karma not redeemable in the afterlife.

  4. 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.....

  5. What I Want to Know is ... by Professor+D · · Score: 5, Funny
    Can I deduct my costs from the payment I make to the phone companies?

    Let's see. If I write more than 5 checks a month, it costs me $5 per. I can pass that on to them. Oh, and don't forget the cost of the stamp. How about all the taxes I pay as a result of me making a living? Gas tax, income tax, sales tax, Social security ... I'll just deduct all that from my payment ...

    What? Didn't anyone at the company notice the EULA they accepted by accepting my payment? I included it in the envelope and they accepted it by cashing the check.

  6. Re:Big Fat Duh! by tomstdenis · · Score: 5, Insightful

    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

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    Someday, I'll have a real sig.
  7. Re:yeah, exactly, "cost of doing business" by profet · · Score: 5, Insightful

    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.

  8. Re:Not with AT&T by DAldredge · · Score: 5, Insightful

    But they don't include those fees in their TV, radio or print ads, do they?

    THAT is what upsets people.

  9. Look at the State if you want the Crooks by s.fontinalis · · Score: 5, Informative

    "New York State has collected $440 million since 1991 in special taxes on cellphones. But only about $30 million of that has gone to the program named on most cellphone bills as the purpose of the tax: enhanced 911 service, which can help police, fire and ambulance dispatchers locate a cellphone caller in need of emergency help"

    http://www.nytimes.com/2004/05/10/nyregion/10pho ne .html