Utility Watchdog in San Diego

Communications Archive

Cable Modem Fees Upward Bound!

Time Warner and Cox Cable increased the rental fee on modem rentals recently.  Are you concerned about yet another increase? Know your options. 

Time Warner customers will see a monthly increase from $3.95 to $5.99 Cox Cable increases to $6.99 a month; increasing your yearly payment to the cable company of $72 to $84. Options?  One solid choice is to purchase your own modem from the list of models available on the cable company website.  Choices cost from $60 to $100 allowing you to recoup your purchase in just over a year.

This seems pretty straight forward; if you are going to stay with your cable company for the next year you should purchase a new modem. It just makes good financial sense. Be sure to look at your monthly bill to confirm what you are currently paying for because if you have been grandfathered in by an older package, then you are not paying the rental fee.

Even though this is a small price increase to you, it will add $150M revenue to these giant monopoly cable companies. Let's keep those dollars in your pocket. 

Cost of Leasing Cable Modem

Current cost is $10 with Time Warner Cable

Current cost is $6.99 and up with Cox Communications

Consumer Alert - DirecTV Complaints On Rise

UCAN has received many complaints about DirecTV from disgruntled consumers. If you're a victim of DirecTV, please complete a  Request for Assistance form with UCAN. If you signed up for a bundled AT&T / DirecTV package in California, you may also want to file a complaint with the California Public Utilities Commission at https://ia.cpuc.ca.gov/cimsapp/

Among the abuses reported to UCAN and elsewhere on the Internet are:

Misleading advertising - DirecTV entices new viewers with ads for low prices in big print while hiding a multitude of fees, planned rate changes and other terms in print too small to read.

ETF - DirecTV locks consumers into a two-year contract with a $480 early termination fee without disclosing the terms or even its existence. DirecTV, often without notice or authorization, then charges the consumer's credit card or debit card (tied to a checking account) for the ETF plus hundreds more in equipment fees when the consumer cancels DirecTV.

Rebate confusion - In order to obtain a promotional rate, customers sometimes have to submit a rebate. Customers who submit the rebate form after installation may be charged full price for their service for up to two months. Those who fail to return the rebate within 60 days of an order are charged the full price indefinitely – even if DirecTV failed to adequately inform them of the need to mail the form.

Charging for "free" services, installation and upgrades - The company advertises “free” installation and upgrades such as an HD receiver, DVR receiver or premium channels such as HBO and Starzz. In fact, customers may be required to pay monthly fees for the equipment. The premium channels are offered as a free trial that automatically converts into a paid subscription.

Contract extensions - DirecTV not only requires customers to agree to an extended contract at the beginning of service, but attempts to extend those terms even further. The company extends the length of contracts when customers require equipment repairs, upgrade equipment or move.

Undisclosed financing requirements - DirecTV fails to disclose that the company’s least expensive package of $29.99 per month is only available to customers who meet certain financing conditions and agree to have the costs automatically charged or debited.

Protection plan - Many customers are not aware they have been signed up a $5.99 monthly "protection plan" which DirecTV may charge $10 to cancel.

Non-return of deposit - DirecTV requests a customer's Social Security Number to run a credit check. Those who do not provide their SSN or those who do not pass the credit check may be required to pay a $200-$300 deposit to get service.  Those who cancel service prior to the end of their contract lose part of the deposit and may also be charged cancellation fees.

Misleading promises of cash back - DirecTV ads show promises of cash back from $50 to $200 for referrals or moving, but consumers do not get any cash. Instead, they may get a $5 or $10 bill credit over several months.

Caller ID Problems

According to this New York Times article, spoofing has been on the rise. It used to be that someone could rely on what a computer told me on its screen. You could play tricks on people, telling them that you were a psychic and knew it was them on the phone before they even identified themselves. What fun that was, until some unscrupulous users usurped this power for their own dastardly deeds.
 
Telemarketers are now using spoofing to mask their true identity. Spoofing occurs when a caller masks their caller ID and instead of showing ANNOYING TELEMARKETER, the caller ID will show a name that will entice the caller to pick up. The NYT uses spoofing examples where "FBI" or "IRS" shows up on the caller ID display.
 
Due to the increase of spoofing, several goverment agencies have passed stricter regulations to help stop this type of behavior. Here's a quote from the NYT discussing the FCC's latest effort:
 
Under the Truth in Caller ID Act, passed last year and enforced by the F.C.C., it is illegal to transmit inaccurate or misleading caller ID information “with the intent to defraud, cause harm or wrongfully obtain anything of value.” link
 
So fear not, concerned citizen. You now have some recourse against these annoying and now illegal telemarketers. Have you been a victim of spoofing? Did it scare the daylights out of you? Let us know in the comments.
 
Posted December 2nd, 2011

The Lack of Choice-Wireless carriers make it difficult to change service providers

One of the greatest things about this country is the availability of choice. Want a breakfast cereal? You can choose from a multitude at your local grocery store. A loaf of bread? White or wheat no longer cut it--now, the more grains you have the better. 5? 10? 15? The grain sky is the limit. The ability for consumers to choose can be a good thing as long as there is actual choice. However, when we look at certain consumer areas--cell phone providers, for example--the actual ability to choose a specific provider is a limited one.

Sure, there are many prepaid providers popping up along the wireless landscape, but it seems that the prepaid providers are shutting down as quickly as they are starting up. Your main choice of carriers in San Diego is the big four: Verizon, AT&T, Sprint, and T-Mobile. Most offer homogeneous plans for a homogeneous set of phones. Nevertheless, even amongst the big four it can be difficult to change providers. The culprit? The early termination fee or EFT.

The early termination fee (ETF) is a little device used by the wireless companies to ensure they make all their profit if you, the consumer, happen to change your mind and want to move to a different provider before your service contract is up. The ETF amount is set at the beginning of your contract term and decreases for every month you are in your contract.

Using Verizon as an example, the ETF at the beginning of your contract is $350 and that amount decreases by $10 for each month of service you complete. The large ETF makes it difficult for anyone other than Warren Buffet to switch providers mid-contract. However, what about situations where consumers are near the end of their contract and want to switch providers, say with only a month left on their contract? Even further, the consumers are willing to adhere to their obligation and pay for the remaining months of service. This way the consumer has made all available payments and the wireless carrier is not wanting for any payment or profit. At this point, shouldn't the wireless carrier allow the consumer to cancel their contract before the end of the two-year term without an ETF? The wireless carriers should allow this, but it is not always the case.

Using Verizon as an example, let us say the customer was on the lowest voice minutes plan with the lowest data package for around $70 a month before taxes ($40 for voice, $30 for data). With one month remaining, the customer had made 23 monthly payments to Verizon. This means the ETF should have decreased by $230 (23 months time $10 a month). With one month to go, this customer's total ETF is $120 ($350 original ETF minus $230 reduction). This is approximately $50 more than the customer's last month's payment.

However, we have found that this is not the case. Wireless providers will hold a consumer to the end of their contracts, even after the consumer has made all payments required under the service contract. We believe that this is another example of the lack of availability of choice for a wireless consumer.

Moreover, along this same vein, we have found that wireless companies have put up more barriers to choice by making the process of cancelling your contract at the end of the term very difficult. Most consumers enter into two-year agreements with a wireless service provider. At the end of the two-year agreement, your service contract automatically rolls into a month-to-month contract. This can be a nice feature because it prevents any disconnection of service.

On the other hand, if you want to cancel your contract at the end of the two-year term to avoid any rollover, you need to call the wireless carrier on the exact day your term ends to cancel. If you call too early, the wireless carrier will not let you cancel and will make you call back on the exact day your term ends. If you call too late--after the two year term ended--you can cancel no problem. All you have to do is pay for the remaining month of service.

Again, using Verizon as an example, you must call on the exact day your contract expires to cancel you contract. If you call too early, there is no mechanism available to set a cancellation date for the future. If you call too late, it is easy enough to cancel. However, your cancellation will not be effective until the end of the next billing cycle. Since Verizon was so nice to put you on a month-to-month agreement, this means the end of the next month's billing cycle. If you call the day after your contract expires, this means that you will have to pay for an entire extra month's service. In addition, there is no proration available--you must pay the entire month's amount whether you used one day or 28 days of service.

A colleague of mine calls this the "two year and one month contract." Since you cannot call ahead to schedule a cancellation, the wireless carriers leave you with a very small window in which you can cancel your wireless service without incurring any additional expenses or fees: one day. If miss that day, another month of service is automatically tacked on to your contract, giving you not a two year contract, but a two year and one month contract.

Did you try to cancel your contract in the last month but were forced to pay an ETF? Did you try to cancel your wireless contract after your two-year term expired? Has a wireless carrier forced you to pay for an entire extra month's service because you missed that one-day window? Let us know in the comments or Request for Assistance.

Posted January 12, 2012