Sunday, May 18, 2008

Perverse Incentives and Effective Ways to Dispute Utility, Cable, etc.

The Red tape Chronicles define perverse incentives as benefits that encourage employees to lie for profit.

Perverse incentives, at their worst can encourage otherwise honest employees to lie, cheat and steal in order to cash in on the rewards many companies offer. Most of us have experienced accounts that were never closed after we requested several times, extra services we never signed up, etc. More than likely perverse incentives is the reason.

Red Tape Wrestling Tips:

How do you protect yourself from overly aggressive phone operators, who are fueled by big bonus programs?

1) We've already mentioned this one. Repeat your understanding of the conversation at the end of the call, knowing that the firm will likely keep the recording and it can be used during a dispute.

2) Be particularly wary at the end of the month, said Broetzmann, because many incentives are paid on a monthly basis. Sellers can become very aggressive during the last few days of an internal sales contest.

3) Make sure you are talking to the right person before launching into your story, said Katz. Many consumers explain their detailed version of events over and over again because they begin talking before they are connected to the right department. So always ask something like: Can you disconnect my account? Can you grant a refund?
The following is an abridged response from one of the readers of Red Tape Chronicles:

Effective ways to dispute utility bills cable/dish bills R2
Resolving billing issues
Water and sewer bills should also be reviewed in detail...

Many third party deregulated Gas and Electric suppliers who contend that they save you money, actually cost you more. Review the charges versus your local regulated utility company....

Prepare before you contact the company. Have your current bill, past bills and any canceled checks in front of you. Make sure you have your account numbers and passwords if there are any...

Figure out by how much you want to get the bill reduced... Then, contact the company when it's least busy. Friday mornings are good times to call. Avoid Mondays and the days after holidays, since those times are the busiest.

Firm and aggressive presentations work as long as they are not combative...

When you talk with the customer representative do the following:

Write down the date and time you talked with the person. Ask for the person's name, identification number and extension before you begin to discuss the bill.

Ask if there's a case number, and jot it down.

Go through the bill line by line to determine the cause of the problem.

Ask what the expected turnaround will be for the resolution.

Write down any price quotes and/or charge adjustments. Ask the customer representative to do the same in the company's computer database.

Call at a different time if you have problems with the representative. Speak to the manager if disagreements persist.

Follow up the call with a letter to the company. The information collected during the phone call should be included in the note. Make sure you sign it.

If all else fail, ask for a supervisor or executive appeals division.

If you are not satisfied. File a complaint with the Utility Commission in your State.

In order to win disputes with utility companies you must keep thorough documentation to prove your points.

Recruit support if your calls to the utility company are not sufficient.

You can locate your state's public utilities commission, which oversees utility companies, or get help through the National Association of State Utility Advocates (NASUCA). This organization represents the interest of utility consumers before state and federal regulators in court.

Also try your state Citizens Utility Board.

"At the commission you can have an informal investigation and if you are not satisfied you can file a formal complaint," says Jay Draiman, a Utility bill auditor.

He explains that the commission informally investigates the dispute by contacting the company on your behalf. If the commission's answer is one that you don't like, you can file a formal complaint against the utility company. If the formal complaint doesn't make you happy, you can appeal the decision. At this point, he warns, courts of law, most likely a municipal court, are involved and a lawyer might be needed.
Some public service commissions address cable disputes. If not, Consumers for Cable Choice, a consumer advocacy group, says other alternatives exist.

"Most consumers don't know this, but they can call their local franchising cable board. That's the agency that has the ability and authority to adjudicate public complaints," says the auditor.

Not all municipalities or towns have a cable board. So, try calling the clerk of the county or clerk of the city in your area to find out who is responsible for cable complaints.

A visit to the attorney general's office may or may not help. The procedure for handling complaints varies with each office. Some offices, depending on the type of utility, might refer you to other state regulators, and others may attempt to mediate the dispute between you and the company themselves.

Consumers can file a complaint with the Citizens Utility Board (which has attorneys on staff), Better Business Bureau, or BBB, a private nonprofit organization that monitors and reports marketplace activities to the public.

"If we have not heard from the company in 30 days, we close the case and suggest small claims court," says spokeswoman for BBB.

According to the BBB, it cannot force a reply from the company and it cannot administer sanctions. It can make a note of the company's unwillingness to respond in the company's reliability report that's provided to the public.
Telecommunications issues can be handled by contacting the Federal Communications Commission, or FCC.

Consumers can file an informal complaint with the FCC and, if determined appropriate, the commission will send the complaint to the company or companies named. The FCC allows telephone companies only 45 days from receiving the complaint to respond to you and to provide a copy to the commission. The FCC reviews the response but doesn't issue a ruling or decision.

If the company's response doesn't satisfy you, you can make a formal complaint. This will involve hiring a lawyer and paying a complaint fee. File this type of dispute within six months of receiving the response to the informal complaint.

Consumers can also contact the Federal Trade Commission, or FTC, but the FTC's help depends on the circumstances. According to spokesman, the FTC only gets involved if a charge the consumer did not authorize is placed on the bill. Contact you phone company about a dispute.

If you have a problem with your phone service or bill, contact your phone company as soon as possible to try to get the problem resolved.

• Call the phone company’s toll-free customer service number or reach its customer service center through the internet, if available.

• If you cannot get the problem settled to your satisfaction, with the customer service representative, ask to speak to a manager. A higher level employee may have more authority to settle your problem.

• Before you contact the company, be prepared. Gather up your bill, receipts or anything else you may want to refer to and don’t forget to write down when you contacted the company, who you talked to, and what that person agreed to do.

If you contacted your phone company and it did not help you with your problem, you may file a complaint with the CPUC Consumer Affairs Branch. The CPUC can help you with complaints about telephone service or the bill, including any charges that you did not authorize or if your phone service was switched to another phone company without your approval.


• By phone: 800-649-7570
• Online: forms/complaints/index.htm
• By Mail: CPUC Consumer Affairs Branch
505 Van Ness Ave.
San Francisco, CA 94102

If your phone company and the CPUC were unable to help you, you may contact the FCC if you are questioning calls made from or to another state or from or to another nation.


• By e-mail:
• Online: cgb/complaints.html.
• By mail: Federal Communications Commission
Consumer & Governmental Affairs Bureau
445 12th Street, SW
Washington, D.C. 20554
• By fax: 1-866-418-0232
• By phone: voice 1-888-CALL-FCC (1-888-225-5322) TTY 1-888-TELL-FCC (1-888-835-5322)
Compiled by:Jay Draiman, Energy Consultant
Northridge, CA 91324

Consumer Advocacy Groups:

Action Without Borders Idealist is an interactive site where people and organizations can exchange resources and ideas, locate opportunities and supporters, and take steps toward building a world where all people can lead free and dignified lives.

Association of Community Organizations for Reform Now (ACORN) nation's largest community organization of low- and moderate-income families, working together for social justice and stronger communities.

Consumer Action - national non-profit education and advocacy organization offering many free services to consumers.

Consumer Cause - nonpartisan, nonprofit advocacy organization founded in 1970 by John Gardner as a vehicle for citizens to make their voices heard in the political process and to hold their elected leaders accountable to the public interest.

The Consumerist

Consumer Action Website - Federal citizens Information Center

Consumer World

National Association of Regulatory Utility Commissioners. - association representing the State public service commissioners who regulate essential utility services, such as electricity, gas, telecommunications, water, and transportation, throughout the country.

Utility Regulation - has conducted economic research and analysis for clients involved with utility regulation, including state regulatory commissions, attorneys general, public and consumer counsels, and a variety of different companies, organizations and law firms throughout North America.


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