Friday, February 01, 2008

We Can Fight Back in this Corporation-Take-All Environment

With the odds stacked against us, "we the people" can make a difference regarding what has now become a "corporation take all" environment by taking advantage of the Consumer Driven Media (CGM), or in other words, using the Internet to voice your opinions on products and services.

Unfiltered online feedback is more powerful than you may think. Although, it is true that large companies and corporations have no one to answer too, and apparently, no incentive to compete for customers, the bottom line is, it's the customers who make them so powerful. They do pay attention to what people are disclosing about them on the Internet. Big government and amoral, faceless corporations, so enmeshed, it's hard to tell which is which anymore, count on confusing us to the point where we throw up our arms in total frustration, resigning ourselves to their diabolical tactics.

"People trust consumer-generated media because it's created by regular people - not faceless companies. People are having less trust from information coming from the government, advertisers, and even editorial content. They go to people like themselves." -- Max Kalehoff, vice president of marketing for Nielsen BuzzMetrics, a company that measures CGM

During the 1980s, the Reagan era, systematic dismantling of federal agencies designed to protect consumers began. President Reagan specifically targeted the Federal Trade Commission FTC. In 1979, the FTC employed 1700 full-time employees, and currently, the FTC employs only 1,000 employees, with more than double the work considering all the technology and innovation that has taken place in the marketplace since 1979.

As Bob Sullivan, who covers Internet scams and consumer fraud for in his blog the Red Tape Chronicles and is also author of Your evil twin: Behind the identity theft and currently, his new book, Gotcha Capitalism, says, "there are no more referees in American Capitalism". He explains why this is so, the "death of the price tag", why Americans are paying 1,000 years in sneaky fees, what to watch out for and finally what you can do about it.

Paradoxically, it's the Internet's intrusion into the marketplace that contributed to the "death of the price tag" or the reason it is almost impossible to determine the price of things any more. The Internet made it possible for consumers to, in a matter of a few minutes, compare prices, therefore, driving the prices down to the point where it could be detrimental to the economy.

In response, about 10 years ago companies realized how they can get around this "race to the bottom" by implementing the "bait and switch" method, initially offering low teaser prices, afterwards sneaking in separate fees for the "real cost of doing business". For example, isolating the cost of collecting federal taxes, real estate taxes etc and then charging the consumer extra for what they determine to be their cost.

In addition, the Supreme Court ruled that mailing a single notice designed so that you will throw it away - written on tissue paper, typed in "mouse print" gibberish, sometimes as much as 24 pages in length -- can bind you into a contract with the company who sent it to you, just by your failure to respond.

If we look at our phone, cell phone, cable, hotel bills etc we will see charges like the following (my Verizon Wireless cell phone bill):

Regulatory Cost Recovery Charge - .96, the price their charging you to collect the other taxes

Consumer Utility Tax - $4.89, the charge for the cost of using equipment

Fed Universal Service Charge - $3.22, a sales tax.

Administrative Charge - .70

911 Surcharge - .60

And if you are lucky, like me, you will see:

Insufficient Funds - $25.00, for their mistake of processing the same payment twice

Early Termination Fee - $175.00 x 4 (per the number of phones in your plan) for a total of $700!

On a personal rant, between my cellphone plan, telephone, Internet and cable, Verizon has become the bane of my existence. It cost me well over $700 to terminate my cell phone plan but I am still stuck with their Internet, telephone, and cable plan for another year which has been nothing but problems.

Keeping in mind a consumer's best tool is persistence, here are some more points to consider:

Document everything.

Companies pay for the telephone calls you make to customer service, so the longer you stay on, the more costly, and the more likely you are to get what you want.

It takes, on average, 16 phone calls to resolve the average customer service problem.

Keep calling back until you get an employee who seems to care, or understand what they are doing and then turn the customer service representative into your ally. For example, "Don’t take this personally I know you have to take orders..." or something like that.

Escalate the call to someone with authority after a couple of attempts at resolving your problem.

Find the names of those with enough authority to fix your problem but not so much that they ignore your problem...someone in middle management is usually a good choice.

Try contacting the may not help, but in can't hurt.

Companies can reverse $40 fee or incur $500 recovery cost to get you back, that is if they want you back.

Verizon's customer advocacy or "president's hotline" phone number is 1-800-483-7988
It really works.

More resources, also found listed under Consumer advocacy in my sidebar:

The Consumerist

Consumer Web Watch

First Gov for Consumers

Get Human (customer srvc phone supp)

My Three Cents

Red Tape Chronicles

Rip Off Report


Anonymous,  20:47  

Thanks. I've had numerous problems with Verizon. I'm going to try that number and hope for the best.

Thanks again!

ted,  20:51  

It's people's own fault if they don't read the fine print or don't respond to something they received in the mail.

I always read all the fine print and ask ahead of time what the extra charges will be.

Companies cannot be expected to hold your hand, they're in the business to make money, not babysit their customers.

check it out 11:40  

What's the fastest growing corporate crime in America?

Corruption? Pollution? Market manipulation? Securities fraud? No.

It's hidden fees.

It's how the giant credit card, cell phone, cable, and banking corporations nickel and dime you to death. And there are literally scores of hidden fees with more being proliferated every day.

Bounce a check? That will be a $39 bounced check fee.

One day late on your credit card payment? That will be a $39 late payment fee - and we'll hike your interest rate from the introductory 0.00 percent to 15.99 percent.

Towel fee. Towel fee?

Yeah, you get one of those deals on a swank hotel. And you show up at the hotel and get hit with a $30 a day resort fee - including a towel fee. In case you go to the pool and use the towels. Or even if you don't. Pay the fee.

Here's one of my favorites - the ATM denial fee. You go to your ATM machine and ask for $400 in cash. You get back a note from the ATM machine saying - sorry, but your daily limit is $300.

So, you ask for $300. The machine spits out the $300, you grab your card and walk away. Next month, you get your statement. And there it is - $1.50. ATM denial fee.

Bob Sullivan has written one of the best consumer books of recent decades - Gotcha Capitalism: How Hidden Fees Rip You Off Every Day - and What You Can Do About It (Ballantine Books, 2008). Call him the Upton Sinclair of the modern corporate jungle.

It has yet to be reviewed by the mainstream press, but on the weight of a couple of interviews on National Public Radio, it has already broken into the New York Times Paperback Advice Top Ten.

And that's not an easy list to break into. Five of the top ten books on that list are diet books - with the top two being Skinny Bitch and Skinny Bitch in the Kitch.

If there were a top ten corporate crime books of all time list, Gotcha Capitalism would be on it.

In an interview with Corporate Crime Reporter, Sullivan said he knew something was up with the book because every time he's interviewed about it, he gets a few minutes into his pitch and the interviewer interrupts with a horror story.

And in fact, that's how Sullivan compiled the stories for his book. A couple of years ago, he was in New Orleans covering Hurricane Katrina for He started a blog called the Red Tape Chronicles about the problems facing victims of the Hurricane.

But pretty soon, people were contacting him from all over the country about consumer problems of their own. It became clear that corporate rip-offs were a huge problem. Since starting the column two years ago, he has received 50,000 e-mail messages from consumers around the country.

The biggest culprits were credit card companies, banks, cell phone companies and cable companies.

Sullivan conducted a survey of consumers nationwide, asking them to identify hidden fees in their most common purchases. And he estimates that the average consumer gets hit with $1000 a year in hidden fees. That comes out to $45 billion a year.

But that's clearly an underestimate. Consumer Reports magazine says that hidden fees cost consumers $215 billion a year - or $4,000 a year per consumer.

That's more like it.

And then you have your $25 billion a year that brokerage firms skim off your retirement funds every year for essentially doing nothing. Or the real estate fees when you close on a house. Sullivan has a whole book of them.

The rise of the hidden fee corporate crime wave parallels the corporate attack on consumer fraud enforcement. Sullivan says that hidden fees have flourished largely because laws governing false advertising aren't enforced.

“There are great folks who work very hard at the Federal Trade Commission (FTC),” Sullivan said. “They don't like it when I say this, but the truth about the FTC is that in 1979, it had 1,700 full time employees. Since then they have become responsible for huge areas like identity theft, the do not call list, internet security. And our population has grown by 75 million since 1979. But today, the FTC has 1,000 full-time employees. So, they have been cut almost in half. The budget is more of a flat-line. And you see that same trajectory at all of the other consumer protection agencies.”

If you are having problems with high blood pressure or heart palpitations, or if you are manic, you might want to leave this book for another day. I mean, do you really want to read that AT&T sought consultants to design a mailer so that you, the average Joe consumer, would be more likely to throw it in the trash?

And why would they want you to throw a mailer in the trash? Because if you throw it in the trash, you agree to giving up your right to sue them if there is a dispute over your phone bill.

Do you really want to know that the hidden fee rip-off artists have two complaint desks - one in Southeast Asia for the regular folks, and one in corporate headquarters in the USA for the sophisticates?

That's right. Consumers are divided into two categories - suckers and sophisticates. For suckers who don't know how to complain, you get the help desk in Thailand, or India, or the Philippines.

For people who know how to work the system, and struggle to get their money back, you get the VIP treatment - and a good chance to get at least some of the ripped off money back.

I experienced this first hand earlier this month. The Verizon DSL at our home went out. I spent five days talking to very kind people at Verizon help centers throughout Southeast Asia.

Then one day, I wrote about my problems on a blog. It got picked up by some corporate person in the USA. And within 30 minutes of writing the piece, I got a call from Verizon telling me that someone from “escalation” will be calling me.

Within five minutes, Wendy from “escalation” calls me.

Within an hour, the problem is fixed.

I haven't followed all of the presidential debates. But as far as I can tell, Wolf Blitzer hasn't asked any of the presidential candidates about the fastest growing corporate crime in America.

Maybe that's because the corporate criminals sponsor the debates or own the television networks - and contribute to the candidates.

In any event, the bottom line is you can buy three of Sullivan's books for the cost of a bounced check fee. Or a late payment fee.

Buy a bunch and pass them around. It teaches us how they rip us off.

And how to get to Wendy at escalation.

Max,  11:35  

The destructive dynamics of corporate-driven globalization will no doubt be the downfall of civilization as we know it and it will be no one's fault but our own.

Corporations cannot exist without the greedy consumer who is never satisfied and they bank all their money counting on the consumer's black hole of desire to have more.

Anonymous,  19:46  

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