What’s The Deal With All These Surcharges?

28344076923_6e62aa1798_zLately I sense a persistent level of anger and irritation in my country. It bleeds through the TV screen, my computer monitor and, is especially alive and well, in the political arena.

Why are Americans so angry?

We snipe online, listen to angry TV commentators yelling about something trivial, and even things as simple as paying a bill can trigger irritation when customer service employees become combative over the phone.

Since I can only control my response, why am I so irritated? Specifically, what is feeding the anger. To find out I made a list. And, not surprisingly, it’s long — filled with big and small annoyances that steal my joy and happiness.

Right to Be Mad

I’ll start with my utility bill. Not an earth-shattering subject, but, like taxes, it is something we all pay. In the month of June, I used 10 CCFs of natural gas. Apparently that’s how much it takes to keep my water hot. At a price of .399 per CCF, my bill for the natural gas was $3.99.

Not bad.

Except, that is not what I paid. Included in my bill were surcharges and taxes because, not only do I pay for the natural gas, I also get the privilege of paying to have it delivered. It feels a little bit like the story my father told on himself. After buying a set of encyclopedias for the family (way back in the 1960s), he also paid the door-to-door salesman a delivery fee. After handing the man the check, Dad and the salesman walked outside and unloaded the books from the trunk of the man’s car.

Utility companies charge me to maintain their privately-owned gas lines. The surcharge was $24.70 and, for good measure I suppose, a 29-cent tax was tacked on.

So, the true cost — out-of-pocket cost — per CCF was $2.91 ($29.07).

Try Travelling

It’s not just utilities it’s a whole slew of products and services we use. In a couple articles USA Today tackles hidden fees unsuspecting customers pay to the airline, hotel and car rental industries. They report,

‘The airlines have become very good at extracting every dollar from consumers by keeping travelers in the dark with hundreds of optimizations and fare rules that maximize the carriers’ revenue.’ In other words, airlines create these nonsense rules because they help them make money.

New Orleans International Airports in 1960s.

New Orleans International Airports in 1960s.

The ‘infectious logic’ is mining cash from our pockets as companies engage in ridiculous behavior — like charging customers extra fees for returning a rental car early — without any fear of reprisal. Have you ever wondered, like a former co-worker did, why auto insurance premium prices don’t fall year-over-year since the cost is based on the value of the vehicle.

Is it because consumers have few legitimate options for the services they buy and no easy way to file a complaint. When my teenage daughter was stiffed on a concert ticket, I had to file complaints with four organizations (and in our buyer-beware society, she lost).

High-Priced Slow Internet

In southwest Ohio, I have two equally poor choices for my packaged deal of phone, cable and Internet: Time Warner Cable or Dish TV.

Although it is tempting right now to go on the standard rant about having 1000 channels and nothing to watch, I’ll restrict myself to surcharges. I pay for two promotion packages. Apparently the word promotion is important to Time Warner Cable because they offer 5 packages and they all include the word promotion. My two promotions include starter TV, standard TV, a variety pass (again 1000 channels — nothing to watch) and other added values like, drum roll please, UNLIMITED (yes, they cap it) local and long distance phone calls in the United States and Canada. Surprisingly, I do not make a lot of long distance calls to Canada (or in the U.S. for that matter).

Then comes the fees and surcharges. The most intriguing ones are:

  • $5 extra for ‘extreme Internet upgrade.’
  • $8.75 surcharge for ‘Broadcast TV and Sports Programming’
  • $4.84 for state and local taxes
  • $4.03 franchise fee
  • $.08 FCC regulatory fee – cable.

The God of Profit

Even though I live in Ohio Vectren, an Indiana company, supplies my natural gas. Indiana is one of only three states where industry regulators are appointed by the governor with no oversight from the public or the legislative branch.

It’s a great deal for business, but it’s really hard on the environment. I live in the Tri-State area — and all three states: Kentucky, Ohio and Indiana landed on the 10 most polluted states list. Ohio was first.

It’s also hard on the pocket book.

According to Citizens Action Coalition, a watch group launched in 1974, this lack of public oversight has led to unchallenged rate increases. If utilities were a ‘normal’ company that might be acceptable, but they are not. They were created by the government as monopolies guaranteed a ‘reasonable profit’ (what a nice, slippery term) in exchange for providing the commodity — like natural gas or electricity — to the public.

So, utilities are guaranteed profit and customers, but that’s not enough.

As CAC notes on their site, the utilities have created a way to automatically increase rates (but never decrease them) through the use of trackers — which are essentially a ‘we need an increase because costs are up,’ measure. If utilities’ books were transparent, again, this would not be a problem. The public could examine the books and expose any indiscretions.

This lack of transparency has the Coalition seeking passage of a Consumer Bill of Rights because,

Legislators are ignoring policies that benefit and protect ratepayers. Instead, they work to protect the monopoly utilities at taxpayer and ratepayer expense.

But, At Least They Keep Salary Costs Down

Okay, not so much.

In 2015, the CEO of Vectren received nearly $4 million in compensation. A really good wage in a country where more than 50 percent of the jobs pay less than $30,000 annually — and 71 percent of all American workers earned less than $50,000 in 2014.

Time Warner Cable

This company ranks near the top in companies I love to hate (Express Scripts is No. 1) — which is kind of sad because the service workers who have been inside my home have always been extremely professional, likable and highly skilled. It’s not the front line workers at fault, it’s a company philosophy of providing a substandard product and engaging in, what feels a lot like, price gouging.

Is ‘Extreme’ Code For Slow?

ruralAmericans, especially those in rural areas like me, have been shafted on Internet service. Despite an outcry more than a decade ago by politicians to ‘outlaw’ French fries (rename them Freedom Fries) the French have something even better than those thinly sliced and heavily salted deep-fat fried potatoes. They have real high-speed Internet — eight times faster connection speeds, and unlike me, they don’t have to pay a $5 ‘extreme Internet upgrade’ surcharge. Even Belgium, the place French fries were actually invented, has faster connection speeds than the United States.

According to a 2015 report from NPR, citizens in the United States pay higher prices, yet get slower speeds. Why? They report,

…half of American homes have only two options for Internet service providers for basic broadband, according to the Federal Communications Commission. And for faster speeds, a majority of households have only one choice.

Sold To The Highest Bidder

When I went online to examine the surcharges on my Time Warner bill, a banner on the page advised me that the Time Warner Cable and Charter Communications merger was complete. The small press release announcing the change said,

Exciting changes are in the works, but for now, Time Warner Cable, Bright House Networks and Charter Spectrum will continue offering their current suite of services to customers in their markets.

I could barely contain my excitement, after all 1000 channels…. But, what the press release failed to mention was Time Warner’s chief executive Robert D. Marcus is projected to receive a $100 million+ golden parachute in the deal. Not bad for less than two years on the job.

Now, I know why I’m angry.

So I click the Time Warner’s online customer service form URL so I can voice my complaint and give them a piece of my mind.

But the page won’t load.


thefineprint

Highway Robbery

An excellent book that goes into detail about the surcharges that nickel and dime the average person to death is The Fine Print.

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