Your cable company advertises one price, but charges another, much higher one: on average, your real bill will be 24% higher than the price you were promised.
They get away with it by adding a series of "fees" onto the monthly bill, and by assigning misleading names to these fees that imply that they're government mandated taxes (this is also common in the aviation industry, where ticket prices are inflated with industry "fees" that are misleadingly listed in a way that makes travelers think they're paying taxes to governments or airports).
All in all, the cable industry is bringing in an estimated $28b in misleading "fees" like "broadcast TV fees, regional sports fees, HD technology fees, Internet service-related fees, administrative fees and convenience fees, all of which are simply part of the company's cost of business, but which are not included in your quoted price.
Some of these charges are particularly egregious, such as Frontier's practice of charging the customers is bought from Verizon a router rental fee, even if they've bought a router from Verizon to work with the service. But even the less-grifty fees are bullshit, and when Consumer Reports used a "secret shopper" program to contact sales reps from the big companies, they consistently lied about the total price of the service.
Consumer Reports wants Congress to pass the TRUE Fees Act, which deshenaniganizes many of these practices, forcing telcos and cable operators to accurately quote prices and to offer free contract cancelation after price hikes.
This report exposes how the cable industry is using the practice of hidden, sneaky fees to disguise the true cost of cable service and increase revenue, and how much those fees are costing consumers. It then arms consumers and policymakers with the information they need to help fight back. An analysis of nearly 800 cable bills collected from consumers across the country shows that:* Company-imposed fees, from Broadcast TV and Regional Sports Fees to Set-Top Box Rental Fees, add what amounts to a 24% surcharge on top of the advertised price.
* On average, the cable industry generates close to $450 per year per customer from company-imposed fees, helping explain why CR’s survey found that nearly six in 10 (59%) Americans who encountered unexpected or hidden telecom fees in the past two years say the fees caused them to exceed their budgets.
* Based on the total number of U.S. cable subscribers and our findings, cable companies could be making an estimated $28 billion a year from charging company-imposed fees.
* The average cable bill contains more than a dozen line-item charges, including the base package price, company-imposed fees, regulatory fees, and taxes, creating a jumbled environment ripe for consumer confusion
How Cable Companies Use Hidden Fees to Raise Prices and Disguise the True Cost of Service [Jonathan Schwantes/Consumer Reports]
Cable companies use hidden fees to raise prices 24% a month [Jon Brodkin/Ars Technica]
(via /.)
