Freedom Lawyers of America

> http://www.nytimes.com/2003/12/04/technology/circuits/04stat.html
>
> 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: Pogue@nytimes.com
>