Subject: [NEXTEL-1] NYTimes: Checking Your Bill for a New Charge

From: Rick Parrish <[email-masked]>
Date: Thu, 04 Dec 2003 07:26:35 -0600

December
4, 2003

STATE
OF THE ART

Checking
Your Bill for a New Charge Called 'Oops'

By
DAVID POGUE

EVERY
few years, economists identify another mutant variation of inflation to
keep
them awake at night. In the 1980's, it was stagflation. Three years
ago, it was
deflation. And now, meet the economic specter of the new millennium:
stealth
inflation.

That's
when phone companies and just about anybody else who sends you a bill
manages
to extract more money from you without actually raising their rates.

Phase
1
of this program was the proliferation of miscellaneous fees - for
"regulatory assessment," "handling,"
"restocking," and so on. According to Business Week, newly concocted
fees will generate $100 million for hotels this year, $2 billion for
banks, $11
billion for credit-card companies - and an average of 20 percent extra
on every
phone bill.

Recently
I may have stumbled upon Phase 2.

Attracted
by the superior coverage of Verizon's wireless network, I signed up for a new
cellphone.
The $60 package included unlimited night and weekend calling and 800
anytime
minutes.

A
few
days later, a welcome letter congratulated me on my new 700-minute
plan. I
called customer service. It was supposed to be 800 minutes, yes?

The
phone
representative explained that what I signed up for was the 700-minute
plan,
with a 100-minute bonus. The welcome letter didn't reflect the bonus,
but I
would see it on my monthly statements.

All
right, no problem. All I'd lost was the 25 minutes on the phone with
Verizon.

Yet
when
the first statement arrived, Verizon had charged me 25 cents for every
minute
over 700.

I
called
the 800 number again; the representative apologetically credited me the
100
minutes. Cost to me: another 25 minutes.

When
the
same error cropped up on the next month's statement, my wife mentioned
that she
had gone through precisely the same ritual with MCI long distance a few
months
earlier. In fact, after reviewing our records, we discovered at least
seven
cases in the last few years when a service company (including at least
three
phone companies) overbilled us and didn't correct the mistake until we
turned
ourselves into human pit bulls.

All
right, mistakes happen. But over and over and over again?

Now,
I'm
not much on conspiracy theories. But in the weekly Circuits e-mail
newsletter
(nytimes.com/circuits) I floated a theory that all this might be part
of a
pattern of passive-aggressive robbery perpetrated on the premise that a
certain
percentage of customers won't notice, or won't bother to protest.
Almost
immediately, my copy of Microsoft Outlook turned into Microsoft Look Out. A
tidal
wave of responses poured in - over 1,200 in the first four days.

Because
the comments were made by e-mail or as online postings, many of the
correspondents did not respond to requests for elaboration or fuller
identification. But the volume of the responses made it clear that I
had struck
a chord.

"My
experience with cellphone companies, airlines, and Internet providers
has been
so overwhelmingly dominated by 'mistakes' that I can't believe that it
amounts
to anything less than an insidious new business model developed to prey
upon busy
lives," said Jeremy Cohen, a 25-year-old music student in Cambridge,
Mass.

A
posting
on nytimes.com offered a similar lament: "They've cut to the bone to
increase their bottom line. They train their front lines to blow people
off,
and give them no authority to make amends for problems. In previous eras, this
was known as thievery. Now it's just the way things are done."

Not
surprisingly, the companies in question deny that there's anything
fishy going
on. "We're not in business to part people from their money for a
service
that they don't get," said Mark Siegel, an AT&T Wireless spokesman.
"Are there mistakes from time to time? Yes. But is it the conscious act
of
some cabal, a secret group of people sitting in a smoke-filled room
(O.K., not
in New York City)? No way."

On
the
other hand, would P.R. people even know about such a program? The
people who
would really know what's going on are the actual phone representatives
- and I
heard from them, too.

"I
can't speak for all the cell companies,'' wrote a two-year
customer-service
veteran at one of the big carriers, "but the idea that we would
intentionally overcharge customers is just plain wrong. Any time
someone calls
an 800 number, the company is charged, staff has to be paid and call
centers
have to be maintained. Where I work, we try to find ways to prevent
customers
from calling in. It would not make financial sense to do things that
would
purposely cause customers to call in."

That's
a
convincing argument; in fact, a Cingular spokeswoman told me that the
industry-average cost per customer-service call is about $7. Yet the
whole idea
behind stealth inflation is that customers don't call in, that the
overbilling
will go unnoticed, perhaps masked by the dizzying complexity of the
modern
monthly statement. Verizon Wireless, for example, doesn't even provide
an
itemized list of calls with your statement (unless you pay - what else?
- an
additional monthly fee).

Verizon's
spokeswoman brought up another point, which I call the Theory of
Statistical
Inevitability. She pointed out that Verizon Wireless has 40 million
customers.
"Even though we strive to get it right the first time, all the time,
there
are, unfortunately, times when we fall short," she said.

But
there
is a hole in that defense, as one reader wrote: "If these were truly
random errors, one would expect that some of them would work in our
favor. I
know of no one who ever got extra minutes, extra money or extra
anything
else."

And
sure
enough, in 1,200 tales of billing errors, only two people described
ever being
underbilled. (Of course, most customers who find errors made in their
favor are
smart enough to keep their mouths shut. Only Abe Lincoln would spend 25
minutes
on the phone trying to give his cellphone company its $1.75 back.)

In
the
end, the idea of a scheme to bilk millions of people by tiny amounts
sounds
preposterous, even silly. After all, wasn't that the villain's master
plan in
"Superman III"?

If
you
ask people on the receiving end of the complaints, you'll hear other
theories
to explain the explosion of customer accusations. Sprint executives, for example, assign part of the
blame to
the consumers themselves.

"Consumers,
the press and others get caught up in the perception of overbilling," a
spokeswoman said, but "if a customer changes her wireless calling plan
and
she doesn't read the terms and conditions of the contract, she might
perceive a
larger bill to be the result of overbilling, when in fact she never
understood
the terms of the contract."

Several
carriers seconded Sprint's additional contention that "so many
government
taxes and federally mandated programs are being tacked on to phone
bills in
recent years. Consumers do benefit from these relatively recent
government
regulations, but at a cost that's not easily understood or explained."

Meanwhile,
a number of call-

center
employees suggested that what's really going on may have more to do
with
dim-witted corporate officers than evil ones.

"I
see dozens of accounts every month where we have made a mistake," wrote
an
800-number agent for retail-store credit cards. "But because the way
our
jobs are structured, we are basically encouraged to ignore the mistakes
and
make the customer go away.

"When
it takes several minutes to unravel a mess but we are only given 156
seconds to
handle the call, most customer service reps look for the quickest way
to
dispense with the call. Extra minutes are very costly to the C.S.R.
With the
millions of dollars we are getting from those who are not catching us,
it more
than makes up for the lost business."

In
any
case, there is some cause for optimism. In the cellphone arena, at
least, the
new era of number portability means that companies have an enhanced
incentive
to improve. For example, Verizon Wireless says it is adding a number of
satisfaction-improvement programs, including customer-service software
that has
been redesigned to prevent errors - "using drop-down menus to choose
items
rather than relying on a rep's ability to remember some of our changing
promotions/procedures."

A
customer backlash is taking shape, too. Verizon agreed this year to a
$20
million settlement in a class-action lawsuit that accused it of having
overcharged hundreds of thousands of California customers on their
long-distance bills. (The plaintiff's law firm is now pursuing the
matter on a
nationwide basis.) Sprint, Qwest, SBC, AT&T and MCI have also
recently
settled class-action lawsuits related to fees and overbilling.

The
more
customers catch the errors and push back, the more it will cost the
service
companies to handle them - and the more likely such problems will be
prevented.

At
that
point, Americans will encounter a form of inflation that will be worth
celebrating: reverse stealth inflation.

E-mail:
[email-masked]

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