FCC Plans To Stop Cell Phone Bill Mystery Fees 157
GovTechGuy writes "FCC chairman Julius Genachowski said Monday that his agency is going to make it harder for mobile carriers to hit customers with mystery fees on their monthly bills. The practice, known as 'cramming,' typically involves charging customers between $1.99 and $19.99 per month for services they either didn't use or didn't request. The FCC announced fines totaling nearly $12 million against four carriers for cramming last week."
Well done. (Score:4, Insightful)
A co-worker has been vocal about this practice. Makes me all the more smug with my el-cheapo pay-as-you-go program.
Re:Well done. (Score:5, Informative)
Main Street Telephone for $4,200,000
VoiceNet Telephone, LLC for $3,000,000
Cheap2Dial Telephone, LLC for $3,000,000
Norristown Telephone, LLC for $1,500,000
Looks like either the majors are not engaging in this practice or too large of Goliaths for the FTC to consider throwing stones at.
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Looks like either the majors are not engaging in this practice or too large of Goliaths for the FTC to consider throwing stones at.
Or they're practicing on the easy targets before gearing up to the tougher ones.
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Now, if only they required that the plans be advertised with the appropriate fees included. When they advertise a $29.99 plan, you should be able to give them $3
Re:Well done. (Score:4, Informative)
When I worked for ATT Wireless, a lot of "cramming" was a result of three things
a. Management demanding unreasonable PCR (Proactive Contract Renewal) or Giving Incentives for PCR
b. CSR's who were not trained, or cut corners in provisioning services
c. Default settings in the billing system.
Now I won't fault ATT Wireless for wanting to make money, but here's a few examples.
-The 1.75 Regulatory Programs Fee, is a tickbox in AXYS (the TDMA billing system) but not Siebel (the 3G billing system), it's automatically added every time you change the service plan.
-Changing the plan from a X-PLANNAME to PLANNAME was a one-way process, If the representative made a mistake (or the customer changed their mind, or hung up/dropped before confirming the details) then it was impossible to undo. So promotions and features that don't exist in the new plan, and only the older version of the plan can't be put back. The Mass Data Entry system would remove incompatible promos. (MDE was responsible for 90% of cramming and billing errors.)
- Management, Supervisors and Team Leads had more leeway to correct mistakes under ATT Wireless, but Cingular had a 50% one time rule. So you couldn't correct mistakes, no matter how legitimate they were.
- Management often embarrassed CSR's by making them call the customer and apologize for their mistake, this results in CSR's avoiding punishment by cutting corners by trying to escalate "hard" calls so they won't be held responsible for mistakes.
- "One call resolution" was a performance metric along with call handle time. Some representatives cheat this metric by sticking to a script which could only be described as "say no to everything and blame the customer."
Overall the experience of working for a mobile carrier is disheartening, because people often call in with legitimate issues, but the directive from management is "get them off the phone ASAP", so you're not allowed to solve the problem properly, only quickly.
The worst cramming comes from text messaging scams. You know the "send a message to (5 digit number) to win an ipod", those are all scams, and the wireless carrier is in on it. Each text message costs like 1.99 or something, and they cause subscriptions (repeated charges,) but they target children. The parent then calls in and demands to know what these charges are and claims they never did any. The solution was to disable the e-wallet on the account. However management failed representatives quality score if they proactively disabled the ewallet. Which BTW was a difficult thing to do, as disabling the ewallet involved one of 13 logins that were not used very often.
The current version of this is now flipped. To enter to win the ipods, you put your phone number into a web form on the website, which does exactly the same as above. In fact it makes it much easier to cram charges because the CSR's at the carrier can't figure out where they subscribed. As far as the phone carrier is concerned, you consented to the charge (that is why there are mile long TOS on those sites.) Since it comes out of the phone carriers pocket, you can't dispute the charges.
Personally I reversed the charges with impunity because I knew those sites were scams, but took it on the nose on Quality for doing so.
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What do you (or slashdot in general) recommend? Assuming I will not sign a contract, use SMS or other data, or purchase minutes that expire, what are my options?
I ask here, because all the information on Google is from someone selling something. If I'm on the phone half an hour a month TOPS, what's a good cheap utilitarian service?
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Assuming I will not sign a contract... or purchase minutes that expire, ...what's a good cheap utilitarian service?
USPS?
I can't think of any telco, wireless or otherwise, who doesn't fail at least one of those three conditions. At least not in my country.
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My land line does not require a contract, local calling is unlimited. It's not quite cheap, given how little I use it but could be a bargain for a heavy user.
For long distance I have a calling card that doesn't require a contract. I put a bunch of minutes on it 5 years ago, and still have most of them. It was cheap enough that I don't remember what I paid for it.
I'd like a cell phone that I can use with as few strings as these options. Don't see any good reason why it shouldn't exist.
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local calling is unlimited.
But they also expire each month. You're ignoring the fact that you're buying a different type of service for a land line than you are for a wireless option.
There are providers, at least locally, that will be happy to provider you with unlimited * for your wireless device for $100 a month, no extra fees, send them $100, your phone works for any domestic call, data access or texting.
Of course, since you're paying for unlimited, you pay a lot more since its wireless and it has no competition. Your home servi
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I've been using Net10 since summer '06. Ten cents per minute, no roaming charge, no long-distance charge. So long as you keep your account active, minutes roll over forever. Phones are available from around $20 on up. I got my first one at Walgreen's. I suggest checking at net10.com for phones available in your Zip-code.
They now have two types of plans - for your usage, avoid the per month plans, get straight minutes. For $60 you get 900 minutes - a nice bonus. From time to time they have various web
Virgin Mobile (Score:3)
They have droid phones and everything down to cheap flip phones without a camera. $25 a month gets you 300 talk minutes and "unlimited" text/data without a contract. The best part is no hidden fees tacked onto that $25, just sales tax. Virgin uses the Sprint network so coverage is decent.
Re:I Recommend GoPhone (Score:2)
$100 GoPhone.
I managed to get my iPhone to work on it, so it's all the "Apple Goodness" of the iPhone but without the nasty contract. I'll skate by your rules and say that the point of the $100 level is that the minutes last for a whole year. Very roughly converting "per call" rates vs your "half hour per month", it's a dead heat that the plan will last you exactly one year.
Plus you can relive the cheesetastic Meatloaf commercial.
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I have a pre-paid Verizon phone, costs 15 bucks a month. In general, I only carry it because I'm on call every fourth week. Rarely, I actually make a telephone call during "business hours", and I get zapped for 99 cents, or whatever. I think it's a pretty good deal, because it's always available for an emergency. Someone lacking in self restraint, who responds to SMS messages, and makes frivolous phone calls would end up paying a lot more than that basic $15.
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TracPhone seems to be good.
The condition of minutes not expiring is unreasonable.. Any way you look at it you are tying up one of their allocated phone numbers, so use the product or get off their lawn. In the case of tracphone (and others) they have a "one year" card that holds your minutes for a long time... My teen has one and uses it just as you say... Seems to work for him.
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Effective, I'm sure. (Score:5, Insightful)
Let's see. $12 million in fines, total, eh? Verizon Wireless at the end of 2009 had around 90 million subscribers. Cram a $0.99 charge onto each, take into account the fines, and...yes, profit!
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Exactly. Make that $5,000*customers*infractions and you're closer to what's needed to stop this instantly.
Re:Effective, I'm sure. (Score:5, Insightful)
nah. Hit the CEO's wallets for the fines. They can afford it and they'd sure as hell get a damn clue. Expand this across the board and companies would be a lot more carefull and if there is a 2nd violation, include the Board of Directors in the fines.
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The retail "mis-scan" rules require 5x repayment up to $5 per incident. That alone would wipe these guys out in a hurry.
It's amazing how most of the basic consumer retail rules evaporated when things became electronic...
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What are you going to do? Switch to the other carrier that does the same damn thing?
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Prepaid.
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Prepaid isn't immune to cramming. When you fork out $20 for prepaid, you can actually call for how much of that?
When they say x.xx cents per minute, that's not including the y.yy cents per minute operator fee, taxes, the connection fee, the busy fee, the not-making-any-calls-for-x-days surcharge, the wind blows from the south fee, and all the other fees.
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Not sure what you are talking about. Take me as an example. I use Virgin Mobile's $25/mo plan. No contract. This gives me "unlimited" 3G data, unlimited SMS, and 300 minutes/mo. If I go over my minutes, I pay 10 cents/minute, or I can renew my billing cycle anytime. I never see any of the fees you mention.
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Most of the fees are subtracted from your minutes.
The biggest fee is the (depending on plan) all-your-remaining-minutes-belong-to-us fee applied at the end of each month or all-your-top-off-minutes-incur-a-100%-charge-after-30-days fee, but there are plenty of others fees too, including the listening-to-voicemail fee, we-round-up-and-charge-you-the-remainder fee, and the checking-your-balance-more-than-five-times-in-one-day fee. Oh, and try making an international call, and see what happens. You get deduc
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all-your-remaining-minutes-belong-to-us fee
I think that's a stretch. This is not a fee, unless you redefine what fee means. Yes, you get a certain number of minutes per month without rollover. If you don't use them, you lose them. I've had months where I've used 299 out of 300 (and even 300 out of 300!) minutes when my billing cycle ended. I've also gone over, and paid 10 cents a minute.
To me, a fee (1) is poorly advertised, (2) should be included in the base price. The 911 government fee is an example. Better yet, the "administrative fee" that Spri
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And every call you make costs you an additional dollar worth of minutes, connected or not. And checking your voice mail costs you. And incoming calls if answered cost an additional $1 plus minutes.
Just because you haven't REALIZED you're getting raped doesn't mean you aren't getting raped.
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What the hell are you going on about. That's not how Virgin Mobile works.
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According to earnings calls, profit margins are higher (by a lot!) on post-paid than on pre-paid.
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Except that Verizon wasn't one of the four companies that were fined. Verizon can afford to buy their own politicians, and almost routinely steamrolls FCC.
Re:Effective, I'm sure. (Score:4, Interesting)
Let's see:
1) Go into a grocery store and steal a $2 candy bar: 30 days shock time in jail.
2) Steal 90 million dollars, and pay a 13% tax on the stolen money.
I know which kind of criminal I want to become.
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For the average guy on the street, the first fine hurts and then the escalations hurt more...
For corporations the fines don't escalate as much, and so long as the fines are lower than the profit made by doing the illegal act, then it's just good business to continue doing it and consider the fine a cost of doing business.
jail (Score:5, Insightful)
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Or just double the fine every year it's not fixed.
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Or just double the fine every month it's not fixed.
FTFY.. Year is too long - it would take a nearly a decade for it to reach the billions if done by the year. Do it by the month, and the problem is solved by 2012.
Or make the fine relative to the amount crammed - if a company gets $100m by doing it, fine them $200m. If they only cram $10k, fine them $20k.
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They'll just add a surcharge to cover the fine.
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If the fine is big enough (25% of the guilty company's annual revenue would be perfect, IMHO), the surcharge would be a mother to slip under the radar.
Let's say that Verizon got busted for it. They get fined, say, $15bn - payable (to the last penny) within 120 days, else the fine doubles and/or the company charter is revoked, and it effectively gets its assets sold on the auction block. The figure effectively cuts Verizon's *revenue* by 25% (2010 shows ~$13bn/quarter), and their profits will likely evaporat
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Gotta love the good old "regulatory compliance fee."
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Or easier, the fines should just factor in the exact profit they made. Get an independent or government party to examine the billing records - at the telco's expense - then fine them the profits they made plus the punitive damages.
Even if they were to lose all the money, in a business sense it would be more like a loan. There has to be a significant negative downside. Factoring in the money they made along with the fine would probably be a pretty good way to do things.
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Sure, but CEO's are use to living in a magical bubble where they are above everyone else. A single day in a concrete cube, and they're going to get very pissed, and will do everything in their power to get back to their yachts and vineyards.
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But CEOs don't do time in concrete cubes, they do time at resorts with fences around them.
Re:jail (Score:5, Insightful)
No. Capitalism only works properly when all parties have equal knowledge of the area they are exchanging value over. Such as exchanging $1/lb for these apples, I know what $1 is, I know how many pounds of apples I'm buying (if the scales are rigged, this is not-equal knowledge), and I know what apples are/taste like/contribute toward my health. Similarly, the vendor knows all of this as well. I am accepting the veracity of the apples, he is accepting the veracity of the cash as a representation of value, and both can use the government as an enforcer of the same (e.g., vs rigged scales, rotten apples, fake money).
This is not Teh Socialism. This is Teh Justice in pursuit of Teh True Capitalism. Buyer beware only applies if you should have known better, not when you were intentionally deceived. Teh Socialism would be if the government wasn't merely trying to stop deception in the marketplace but also regulating the cell carriers' rates.
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Teh Capitalism requires equal knowledge to have an equal exchange of goods. That's why you hire an expert to work on your behalf, e.g., a lawyer, general contractor, real estate agent, etc., and then your knowledge is now ostensibly that of your expert (hope you got a good one). However, you're now erecting a new strawman, which is actually Le Laissez-Faire, whereby the government does not get involved merely because you don't have enough knowledge. But that's what I said above: you should have known be
Finally (Score:3)
Re:Finally (Score:4, Insightful)
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I got an smartphone with pay as you go service. Just bought an HTC myTouch from newegg for around $180 and put my AT&T gophone card on it. Works fine.
Now if you use lots of data you will get raped with their pay as you go rates. In my case I use all these free wifi spots all over and complement it by buying 10Mb for $5 every 30 days or so.
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On the flip side, at $0.50 per megabyte, the equivalent of the 2 GB AT&T iPhone plan would cost you a grand a month....
12 Million? Slap on the wrist... (Score:2)
Given the rampant and pervasive monopolistic practices of the soon to be 2 carriers, I just can't get that excited about such a small fine. Such intentional fraud should result in jail time for whoever authorized such actions.
now when am I going to stop being charged for people sending me spam SMS messages? I see that issue as a sure sign that the FCC is fully captured by the industry, and small fines like this are just window dressing to keep the irate masses at bay.
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now when am I going to stop being charged for people sending me spam SMS messages?
When you pay them $10 a month to turn off the service. Hell of a deal. I am going to get the neighbor kid to pay me $10 a month to not punch him in the face.
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yeah, 12 Billion is more like it. I'm not sure that is even enough.
Happens in Canada too, but authorities do little (Score:2)
In Canada, there are this 'CRTC fee', '9-1-1 fee' and 'system access' fee. Canucks have no way out with only a bundle of national operators that could foster competition.
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Those fees aren't the mystery fees being described here. Those fees are legal and described in advance.
If you don't get charged the 911 fee, you've got lucky somehow.
These are fees for services you didn't even want [fcc.gov] or sign up for.
As a slightly different example here, our corporate cell phone bills frequently have charges for calls to our my-5 numbers. We read through the bills every month and call to complain about those. Almost every month they try to bill us for calls that their own service claims are
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Because most businesses are not in the habit of defrauding their customers.
Hans
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Everyone makes mistakes. Assuming there will be no mistakes is at your own peril.
I read all my bills; it only takes a few minutes.
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My point about mistakes was to justify always reading one's bill. Once one always reads one's bill, one also notices these illegal charges.
In no way did I imply that these types of charges are mistakes, only that since mistakes happen, one should read one's bill. These charges are IMHO illegal and unethical.
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A lot of them dropped the system access/crtc fees and replaced them with a slightly higher "compliance" charge.
Its a start (Score:4, Interesting)
Now if they can stop bandwidth overage charges, ( or remove caps completely ) and force everyone to be compatible with each other like it was with wired phone, so you can keep your phone...
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I live in America, use my cell phone daily and have travelled to Europe with it and never missed a beat.
Of course, my phone is a multiband GSM phone and not from of the carriers that still using something other than the rest of the world.
On of the reason I won't use Verizon is because I want my phone to work outside of the US, not because I do much travel outside the states (about 3 times in my life) but because I don't want to support someone who doesn't put effort into compatibility.
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Well, i do agree it should have been done via mutual agreement, for the consumers benefit. But they didn't, and wont, so that is when the government must step in.
I'm not a fan of government intervention into our lives or commerce, but their job is to protect us and i would say mandating compatibility would fall under that scope.
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Solution: Pass a law that gives them a short but reasonable amount of time to agree on a standard and then give them a reasonable amount of time to make the transition. The stick is that if they don't, then a standard will be thrust upon them.
They will be perfectly free to update the standard in the future as long as they can do so in agreement.
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Force everyone to be compatible?
*Mandate* that all carriers use a specific cell technology or implementation, and have absolutely no alternatives? Yeah. That's going to be just swell.
Yes, EXACTLY.
That doesn't prevent progress, it doesnt prevent new technology, it doesn't prevent competition, it just requires that everyone be on the same page.
It'll work out JUST fine as long as it was put in place and put the entire brunt of the pressure on the providers and not back down when they do their best to make it fail from the start.
It won't fail, the providers won't let it, they wont' throw away all that money just because they want to 'lock people in', the major carriers lose and gain from ea
prepaid (Score:2)
Re:prepaid (Score:4, Insightful)
Carriers have obscured cell phone (the physical device) payments with cell phone services. How this came about still boggles my mind, almost like bundling a gas card with your car payment and not being able to find out how much the car even costs. The two should be separate, and the current high fee for cancellation should be deemed illegal. You either pay through the nose month-month, or you risk 2 years of hell dealing with a contract for awful service with a $350+ termination fee looming.
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The two should be separate, and the current high fee for cancellation should be deemed illegal.
Most are. But there's nothing wrong with purposefully drawing up an illegal contract (why else do you think severability is required in every contract? They know they are putting in at least one illegal clause). It's simply illegal to have a $300 cancellation fee for a 24 month contract. That's been challenged in court multiple times and the excessive fee has lost many times.
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Pay through the nose for what? To who?
Boost Mobile is $50/mo for everything, unlimited, and then every 6 months they drop it $5/mo until you bottom out at $35/mo. That's right, $35/mo for "unlimited talk, text, web, 411, IM & email.".
What are you paying through the nose for? Sure, you have to buy the phones up front, but they're coinsures of inexpensive phones people want. From the $30 dumb phones (which
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And if you can't find the phone you want with Boost, try Virgin Mobile, they're Sprint pre-paid as well. You might even be able to just swap SIMs and use the phones on either service (iDEN phones notwithstanding).
Sprint is CDMA, there's no SIM card to be swapped there. Also Boost and Virgin phones are locked to their respective carriers, you can't buy from one and use the other for service.
Now if only.... (Score:2)
I ain't holding my breath.
The problem is not "transparency". (Score:5, Insightful)
From TFA:
BS. Sheer nonsense. The problem is not that the bills are hard to "understand". The problem is the cramming in the first place. Remove the ability for any arbitrary fly-by-night op to place charges on anyone's bill, if they know their phone number, and the problem will mysteriously disappear.
Cramming takes advantage of social engineering. "Wanna a HOT NEW LADY GAGA ringtone!!!! Just type in your phone number on our web site. (tiny font: $9.99 per month charge applies)".
And that's how a "simple-minded" acquaintenance of mine ended up with $40 bucks worth of charges on her bill, some years ago.
Get rid of the ability for anyone to cram charges, without a written notice by YOU, to YOUR cellphone carrier, and there's no more cramming. Of course, the cell-phone carriers will fight tooth and nail. I'm sure they make a nice profit skimming off their share of all the crammed charges.
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A better fix to the problem. (Score:2)
Given what Apple asked for in the mid 90's Public Radio bandwidth for 10Km ranged wifi routers and we could easily have a roof top cell phone grid and any long distance calls could be handled my Ma and Pa ISP's for Internet connections for long distance calls.
The only reason we did not get this in the 90's was Al Gore was the Internet destroyer, when he was in office.
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That's not cramming, that's scamming. And by entering your phone number on their site, you're essentially authorizing the charges.
Cramming is when, as described in the article, your carrier adds bogus charges to your account. Now, we can sit here & debate whether or not the carriers themselves are behind the scamming sites, but that's not the point.
It seems strange that my phone number should be equivalent to a credit card number.
FCC Fee? :) (Score:2)
Oh, for a moment there I thought they decided to force carriers to cover all fees from the bill. You know, so it'd be one total, not total + FCC Mystery Line Fee, USF Fee, blah blah blah.
Either that, or soon we'll see "Employee Handwashing Fee", "Cleaning Surplus Reimbursement Surcharge" and "Poison Control Center Fee" being imposed at fast food restaurants.
Oh well. I can dream...
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What about "regulatory fees", etc? (Score:2)
What pisses me off is that they charge $XX per month for their service and then add to that an itemized list of their normal business expenses, as if those don't count toward their monthly charges. When you go to a retail store, they don't advertise a $25 widget, then add $10 for their property taxes, business license renewal fees, fire district taxes, employee healthcare charges, etc. (Though in the US, it's normal to advertise prices without sales tax, which is bullshit.)
So why don't all of these fees and
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Energy company does. Cable company does. Traffic tickets do.
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Air carriers are probably the worse, with "fuel surcharge" and airport renovation fee, security enhancement tax, etc.
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Baggage fees that encourage people to take carry-ons whenever possible, slowing down boarding, coupled with almost no enforcement of carry-on size rules.
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A number of states have this: traffic tickets have the normal base price, but then there are surcharges for specific programs on top of that. The problem is that the surcharges are per-ticket, not percentage-based, so a $40 speeding ticket might cost you $140.
Now, in my part of upstate New York, they make the process more annoying by not telling you the charge up front. The officer takes down your address, gives you a copy of the ticket, and the city mails you information about your fine and court date (alo
Pocket Change (Score:4, Informative)
$12 million divided among 4 carriers? I bet they're all laughing. That's just a (very small) cost of doing business for these guys. Fines of $100 milllion per carrier would get their attention - much less than that and it's hardly even newsworthy, much less an effective deterrent.
Oooh - 12 million dollars! (Score:3)
The FCC announced fines totaling nearly $12 million against four carriers for cramming last week.
No doubt the board of directors, afraid the stockholders would hear about these outsized fines, quickly went around the table to see how much they each had in their pockets.
Acronyms (Score:2)
How long have we asked for this? (Score:3)
Wow! (Score:3)
A WHOLE 12 Million!?
Shee-it. That'll learn em. They'll have to scam a whole 60k more people for one month.
Criminal (Score:2)
This is a criminal case. It's theft.
Now if only... (Score:2)
Screw the Fines (Score:2)
Why should the Government benefit from this. Where the hell are the refunds with interest...enough to make it hurt them...essentially like a class action would.
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True, but he invented the internet and therefore he's entitled to the money.
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As an American, I'd like to point out that you don't seem to know what the word "fellow" means when used as an adjective.
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This may not apply to cell services but I seem to recall when I was younger there was tax on my land-line phone bill that was enacted to pay for the Spanish-American war. Is that still there?
Exactly how old are you?