Money-And Gouging Their Customers Bank Accounts

The Involvement of the FCC
While looking for information pertaining to the the recent FCC questions to Verizon, I stumbled upon a blog called Pogue’s Posts, which resides in the NY Times, a November 12 post in which not only the FCC info I was looking for there, but a few other things that were seemingly swept under the rug for some reason. At least that is what looks like happened. And I am wondering why-No… that’s wrong, I do know why. I just don’t know why people are letting them get away with it.

Ok so here is what is going on. Verizon recently substantially upped the Early Termination Fees (ETF) for their “advanced devices.” Now, for anyone who doesn’t know what ETF’s are for, they supposedly are there to pick up the cost for the subsidized phones-You know, the “Free with contract” phones. What happens is when one of the subsidized phones gets sold the carrier is losing a few hundred dollars on the deal. SO, in hopes of regaining that money, they penalize anyone who leaves the contract early with a $175 fee. This at one point covered the cost of regular, or clamshell phones.

But now with the high prices of certain devices such as a BlackBerry or a Smartphone, or any “advanced device,” $175 is barely enough to cover the chip that’s used in the devices. So they nearly doubled the ETF to $350. The problem is the FCC doesn’t like that price at all. They sent an open letter to Verizon(link to PDF of full letter) asking them to provide answers to their questions by December 17th. Some of the questions ask if there is an open disclosure policy on the ETF and if so, what is it. It also asks if there is any way other than the service agreement to come across the information, rules and regulations of the ETF terms posted anywhere publicly on their website or accessible in any other way.

The FCC is asking other questions as well. These pertain to the formula Verizon uses to prorate the ETF because it is turning out that in the end, even though someone stuck to the contract for the full 24 months, at the end of the 24 months, they still have to pay at least a $120 fee, which is $10 dollars off the initial ETF for every month they stick with the plan. But a fee such as this really should dwindle down to nothing. The customers are being made to pay even though they are loyal and never switched or canceled the contract. The FCC asks :

how can customers learn about the formula for prorating the ETF?
Does Verizon Wireless provide the full terms and conditions, including the
proration formula, anywhere other than in the formal Customer Agreement? If so,
where? For example, is any relevant information provided on monthly bills?
What is the format of the information provided? How can customers learn about
the amount

The Other Hidden Charges and Fees
Now, in the same blog posting I found, dated back on November 12, is the $1.99 data charge issue. To be honest with you, I scour the news and blogs many times a day looking for juicy little tidbits to write about and today is the first I am hearing of this. Granted, I really can’t know everything like I would like to, but I think I would have remembered AND wrote about this.

So here is the deal. Verizon is charging everyone $1.99/Mb for data use. I know, it’s impossible if you don’t have the data plan right? Or maybe you have it blocked so that when you inadvertently hit the button you don’t accidentally get charged, right? So very, very wrong. You see, what Verizon neglects to tell you is that blocking the data capability does nothing but cost you money. In more ways than just paying for the blocking service. I don’t understand this because the blocking service tells you, if you accidentally press the button, that you can not access the service.

“Oh, ok, so the blocking service is working. I can’t access the data so I won’t get charged by accident.”

Yes you will be charged. This is apparently because the blocking service message is run from the data itself. In other words Verizon doesn’t tell you that when you pay for the blocking service that you have to access the data anyway for it to display the message. So you are inadvertently paying monthly for a service that bills you another $1.99 anyway every time you get the message. One reader of the blog claims to work for Verizon, which is what sparked the investigation by the FCC, stated the customer service reps are being trained to do anything they can to try to get the customers who asks for a block to go an alternate route. Here is what he had to say:

“They (Verizon) have started training us reps that too many data blocks are being put on accounts now; they’re actually making us take classes called Alternatives to Data Blocks. They do not want all the blocks, because 40% of Verizon’s revenue now comes from data use. I just know there are millions of people out there that don’t even notice this $1.99 on the bill.”

So What Does Apple Have to Do with This
Honestly? Nothing. It’s what they have in common with Verizon. The same master plan to fool their customers into giving up all their meager earnings to these massive companies. You see, this is the price the customers must pay for the privileges of being loyal to their phone carriers and phone makers. The iPhone especially. Why would they do that? Well, for starters, because they know you are a loyal and paying customer who will probably do just about anything to get your hands on the newest, coolest phones around.

Point of Fact. In the same blog post I mentioned above, there was a tiny little link referenced by the author in which he is talking about the “…original cost of phone”s and then (see my analysis here). So I clicked on the link because I wanted to read more info. And that’s when I saw the title. “How Much It Costs to Upgrade to an iPhone 3G S” Wow. Before I go any further, here is what the author of the blog called a cleaned up edited version of the letter a reader wrote to him about the subject.

“Apple should be ASHAMED. With the launch of the 3G S, this loyal Apple and AT&T customer will have to pay $700 for the 32GB iPhone, while a new customer will pay $400 less for the same phone. “In no other area of commerce would this price gouging of over 100% be considered ethical, sensible, reasonable or even, I wonder, legal. “Apple persists in a shady, shoddy strategy that I find revolting. To quote Billy Madison, ‘May God have mercy on your soul.’ Apple, you used to have one.”

So basically, what is happening is that if you are an existing customer, you will have to pay the price of the new customers coming in and getting reduced price subsidized phones. Making the the loyal customers pay is their way of making back all the money for being stupid enough to give away the phones for free in the first place. Did you really think the phones only cost $200? like the author of the other blog said, they are mini computers. There is no way they aren’t losing money on the contract deals. There is, however, always the option of purchasing an iPhone (not 3GS) for $600 without contract if you like…

So that’s the jist of it. You can see the full story here.

And The Verdict Is?
When something little like an app doesn’t get approved so many people make a big thing out of it. I mean come on people! You are fighting to give the rights to something, like an application for a Smartphone, that is happily going to suck your money faster than they (The developers you are fighting for)can say (or not say) Thank you!! (Except for the one with the app for the congresspeople-he did say thank you and did not charge a fortune and take advantage of anyone)

But when Verizon and Apple are plain as day in your face robbing money from their LOYAL customers, that’s B**T, you are letting it slip by as if nothing is wrong? Really?

I think what is happening has something to do with all the warring advertisements back and forth. Any publicity, bad or good gets a company’s web site more traffic and more sales, inadvertently. Publicity is the root of all success on the web and now… Poof! The contract making AT&T the exclusive carrier for the said iPhone is just about up. And who is Apple considering giving iPhone’s freedom to? Well, Verizon of course! Coincidence? I think not. What it is, however, is a ploy for more publicity still. No one is ever going to want the two companies to team up together after all this customer service billing crap and the stealing of money on Verizon’s part.

I sincerely hope Verizon gets its *ss beat by the FCC. Or at least I hope they will overturn the ETF or put in place another such measurement that has the specific goal of customer appreciation and loyalty at heart. I know, it’s a pipe dream, but it is Christmas and a girl is allowed to dream, right?

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