Gouging Customers, the Verizon Way

Hey there campers. Got a big business? Want to score some easy cash? Here’s how in 5 easy steps:

  1. Contracts contracts contracts! If a customer doesn’t commit to at least 2 years of unwavering product loyalty, screw them in their wallet.
  2. Plans. Different charges for different folks. Why make your customers pay for what they don’t need?
  3. Answer? It’s profit baby! In the lucky happy event a customer goes over their monthly allowance, charge them till the cows come home. (Be sure to shoot the cows).
  4. Remember, changing plans costs money… for the customer! Unless they agree to another 2 years of nifty special loyalty time.
  5. In fact, why not just assume they want this and update their loyalty preferences every time they change a plan or replace a phone. The customer will thank you (but not over the phone. That costs 45 cents a minute when they exceed their minutes allotment).

On a related note, there’s some cell phone legislation in the works (MN Daily):

On the subject of early termination fees, Farren said while prepaid cell phone service exists as an alternative to a long-term contract, “85 percent of people choose the contract because of the tremendous savings that you can get through the contract. An early termination fee only becomes an issue when the consumer decides to renege on a contract they voluntarily signed.”

Yeah they signed it, because cell phones literally double in price, and there is no alternative when it comes to monthly service.

And the wireless carriers are whining that this will create “less choices” and “higher prices” for consumers. Higher prices?

“For consumers, I think it would be helpful, but not for T-Mobile or the (other) phone companies,” she said.

“I think this is how the phone companies make profit,” Jeylani said, referring to stipulations such as early termination fees.

RCR News has some choice quotes:

“Most wireless carriers advertise a price significantly lower than the bill consumers pay each month, adding mysterious regulatory charges and other junk fees. If this legislation is passed it would go a long ways toward eliminating those shenanigans,” said Chris Murray, senior counsel for Consumers Union.

“For most wireless users, their wireless company is also their local telephone monopoly, and nobody can offer the same bundle of wireless, local phone and high-speed Internet. The wireless industry will blow a lot of hot air trying to convince you that they’re so competitive, they don’t need oversight. One quick glance at their anti-consumer practices demonstrates otherwise,” said Mark Cooper, research director for the Consumer Federation of America.

If companies behaved, we wouldn’t need regulation.

(image source: future of the book)


14 Responses

  1. Yeah, your friendly telco screw job. Laisse-afaire economics always leads to one thing, monopolies. And monopolies mean unhappy, screwed over consumers.

  2. And yet we see more deregulation…

  3. You think they’re bad, try Embarq. I’ve never had worse service in my life. And customer service. Well they either don’t speak English OR they are totally unresponsive. I paid $150 to get OUT of my contract because I found them that horrible to deal with.

  4. No surprise there, as courts confuse money with speech and elections getting more expensive by the day. the pols need the corps to fund their campaigns, and nothing, especially in politics is for free.

  5. And again we assume that because a service exists, that we have some right to force a doctrine or business model upon the suppliers of that service. In case you haven’t noticed, there are wireless providers that advertise against other business models which people do not like. Hell even some BANKS do now.

    You do not have a right to tell me in whatever business I am in, to run my business a certain way or to not charge you for X service, or to do ANYTHING else you WANT by threat of force. And that IS your threat after all. When you bring regulation into play, when you use government, you are threatening to murder anyone who does not comply with your wishes.

    If you in ANY way think that regulation PREVENTS monopolies then you are even more ignorant of history and economics than I previously had thought.

  6. “Murder” oh boy…somebody went of the deep end…..

  7. Firstly, way to avoid any actual rebuttal. I like how you dodged formulating a intelligent response by implying I am ‘(off) the deep end’. You should be a politician.

    Second: It is not going ‘(off) the deep end’. It is the ultimate result of using government force. If you resist the governments rules, the ruling class will send its minions to your home and should you resist being dragged off to a prison, they will use force to punish you. Which will most likely end up in your death.

    You are not free if your only freedom is to agree and comply with the government

  8. I would formulate an intelligent response, if you said something, well, intelligent. And your statement that somehow regulation can not prevent monopolies is wrong both of both historic and economics base. Besides corporations are not physical entities, they exist as straw men of the law, violate the rules and the goverment simply says that X corporation no longer exits, seizes it assets (if any) and voila, no arrest needed or required. To say that your asking for murder is to reduce it to the absurd, a common fallacy.

  9. totaltransformation, they sound like a real prize company.

    Darrin, here we go again, assuming that holding companies to any standard of conduct is evil socialist propaganda. We do have the right, as government, to say “if you want to do business with us, don’t lie”. But the problem is also monopoly. If you are the only guy in town, don’t use that to screw over consumers, or consumers will fight back. The government is one tool to do this, and it is a valid one.

    Rafael is right. Oh boy. Regulation doesn’t equate to murder. What world do you live in?

    Rafael? Holy crap did you slap that guy down. You are right. Darrin’s saying look at history and economics” is ironic, given that when you do, his thesis is proved wrong.

  10. fitnessfortheoccasion:

    This is not holding them to contractual standards agreed upon within the terms of said contractual obligation, this is imposing YOUR will upon the terms of the contract. DEMANDING that certain terms are included with threat of force. Your right to contract freely does not entail a ‘right’ to dictate the contract without the other parties consent. You have no rights that violate another’s.

    The business is not doing business with the government. It is doing business with you.

    You ignore the fact that government regulations and control often necessitate monopolies. There are particular local statutes that grant one company exclusive ‘right’ to peddle their wears/services in that given territory set up by statesman X. You most importantly ignore the fact that a corporation is in itself a government protection. A corporation is a government created deferment of responsibility for ones own actions, creating a fictional entity upon which nearly all accountability is placed, in the stead of its various owners and employees.

    I will address the notion of all government action (not only regulation) equating to force/murder in my response to the other gentleman

  11. Rafael

    “…your statement that somehow regulation can not prevent monopolies is wrong both of both historic and economics base.”

    Attempt to prove it beyond this matter of fact statement. You cant, but go ahead and try.

    “corporations are not physical entities, they exist as straw men of the law, violate the rules and the goverment simply says that X corporation no longer exits, seizes it assets (if any) and voila, no arrest needed or required. To say that your asking for murder is to reduce it to the absurd, a common fallacy.”

    I have already addressed this deferment of responsibility and pairing of protection with the government in my other post to the other man. I whole heartedly agree that corporations as a construct in law are wholly immoral and unfair. They are entirely opposed to a free market and I must oppose them on those grounds alone.

  12. Darrin,
    Fine, then you work for a country with monopolies and roobber barons. I empower the government to speak up and stand up for my rights. That is their job. They ignore it most of the time, but sometimes, they do it. And we don’t have to stand for corporations using their power to force us to do business with them on their terms or not at all. We have our own power. What does it matter whether we use economic or social power to push back? We can, and we will.

    The local statutes issue is a good one to raise, and a great counter example of government helping corporations maintain power. Yay fascism (marraige of corporate and government form and function).

    As for the “attempt to prove it”… come on. No one is buying that. We remember high school history class. Robber barons. Ma Bell. Seriously.

    And why can’t people join together and limited liability to pursue business? Just don’t give that business the same rights (and in some cases more rights) than individuals.

  13. Two words….Ma Bell…

  14. I was off my contract, and switched to AT&T, but I still got the fee! Turns out that they treat *any* termination initially as an early termination, and charge you the full $175 per line (so $350 for me, between my wife and I), and only after the next month, do they CREDIT YOU BACK THE MONEY THEY TOOK. In my case that’s exactly what it was since I had auto-bill pay turned on and it was going against my checking account (debit card). They claim that’s “just how their system works” and it’s not a problem at all. Whatever. All I know is that they’re hanging onto my $350 for a whole month without cause or my consent.

    Read my rant here: http://www.jackassery.com/news/504/

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