Sunday, February 14, 2010

Profit at the Expense of the Consumer, Part 2: Talking to India

We've all experienced poor customer service. Getting a customer service representative on the phone in the first place can be difficult and time consuming. Large companies like Chase and Citibank force customers to fight their way through computerized menus before we can talk to a human being. Some companies do not even publish their customer service phone numbers.

And, when you finally get someone on the line, they are likely to be uneducated, untrained and underpaid. Often times, they are located in India or El Salvador and might not even speak English well enough to get the job done. comes to mind as a company with laughably bad phone service. Their employees only speak enough English to handle two or three specific tasks. Beyond that, you'll need to speak Tagalog or Spanish, depending on which call center you get.

Part of the reason for poor customer service is a simple desire to save money. It costs a lot of money to staff a customer service line, and it is cheaper to hire someone in India whose English is less than perfect.

But there is another, and I believe more important, reason why some companies make it difficult to communicate: they want customers to just give up. Most of the time when you call your bank, for example, it is because you were charged a $7 fee you should not have been charged, and you want it removed (how many times have you called a company complaining that you were undercharged?). Many companies, United Airlines being a prime example, have an active strategy of making it difficult to communicate in order to be able to get away with overcharging or otherwise not providing what they promised.

Another way in which big American companies try to bamboozle consumers is with incomprehensible bills. If you cannot understand your bill in the first place, it is hard to know if you are being cheated, let alone convince the company to refund the $18.47 they overcharged you this month. For example, my Sprint contract is quite simple. I pay a fixed amount of money for a fixed amount of "anytime" minutes each month. Everything is supposed to be included in one price. Or at least that is how they sold me the contract. But, my current Sprint invoice has no less than 42 entries, not including the various taxes. They charge me odd amounts for various items, then credit me back for other items. None of it has anything to do with our actual agreement, and none of it makes any sense. AT&T and DirecTV both do the same thing. Their bills are actively designed to be difficult to understand so that we will not question them. It would be easy to make the bills easy to understand, but that is not what AT&T wants.

These incomprehensible bills nearly always contain mistakes, and the mistakes are nearly always in favor of Sprint, AT&T and DirecTV. I know that from experience, and if you look closely at your own bills, I am certain you will find the same thing. But, finding the mistakes, getting through to customer service and trying to get them to refund the excess charges is rarely worth the time and effort. And DirecTV is smart about the way it overbills its customers. The amounts are generally small, on the order of $10 to $30 each month. That way, some consumers will not realize that they are being cheated, especially given the complexity of the bill. Others may realize that they are being overcharged but are unwilling or unable either to figure exactly where on their complex bill the overcharge appears, or to fight through the customer service jungle to get back $18.47.

It seems that the majority of large American companies have adopted the same cynical policy of abusing their customers in order to squeeze out a few extra dollars each month. True, it is not all of them. Apple, for example, has a policy of providing excellent customer service, often giving their customers more than they agreed to provide, e.g., serving a product a month after the warranty expired. The business practices of the majority of the companies, however, are just the opposite, and the cost to society are high. The uncivilized and dishonest practices of Sprint, AT&T, United Airlines and DirecTV may net them a few extra dollars in the short run, but they make life unpleasant in small but persistent ways. These companies teach people to have low expectations, and to cheat whenever you can get away with it. And, in the long run, these companies destroy their own reputations, at their own peril.


Dylan said...

I think your comments about mistakes in wireless bills particularly often prove prescient--in fact, one study concluded that up to 80% of us are overpaying for wireless. Thus to respond to your post practically, I wanted to add several options for cutting your cell bill. For starters, check out the Houston-based company Validas, where I work in consumer advocacy. At Validas, we electronically audit and subsequently reduce the average cell bill by about 22 percent—equating to around $450 annually—through our website, . From regular people to top corporations to huge entities like the State of California, an incredibly varied group of wireless customers uses Validas to slash their wireless bills.

Watch Validas in the media, recently on Fox News at .

Good luck to everyone reading on keeping your wireless expenses under control.

Consumer Advocacy,

Provisional Eastonlow said...

Thanks for the excellent info -- much better than the original post!

Brian said...

Very well put. This is exactly how I feel, yet I'm not quite able to word it like this. Excellent work.