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Ah, technology! or, nickled and dimed to death by your local atm machine
on January 7, 2008
Bob Sullivan has written an extraordinary and frightening book on what happens when technology makes it increasingly easy for corporations to rip consumers off, when the government fails to do a decent job of regulating those corporations, and when consumers aren't educated enough to make rational marketplace decisions.
Technology today gives us automatic teller machines, internet, wireless phones, cell phones, satellite and cable television, electronic bill payments, etc. etc. These gadgets and services are marketed as life simplifiers, and in many ways they are. But there are also hidden costs to using them that gouge the consumer. Sullivan's claim is that unless these hidden costs are recognized, consumers are prey rather than free agents. Hence the "gotcha."
ATM fees, for example, are almost never fully disclosed on the ATM screen. They average about $5 per pop--that is, you pay a good chunk of money to access your money. How bizarre is that? But bizarre as it is from the consumer's perspective, it's good business for the banks because service fees are major revenue sources for banks. These days, according to Sullivan, about one-third of all bank revenues come from fees. In fact, many banks now make more income from fees--checking account fees, bounced check fees, ATM fees, and so on--than from interest on loans and investments.
Or take credit cards. A credit card company can legally raise your interest rates simply by sending you a finely printed and obscurely written announcement informing you of the increase and stating that unless you formally object in writing, you accept it. The companies know that most consumers won't even bother to read the announcement before tossing it. In fact, they bank on it.
Or take hotels. Many of them are now charging us for the exorbitantly priced room bar items if we simply touch them. Sensors in refrigerators record when the door is opened and an item removed. It doesn't make any difference if you put it back. You pay for it even if you don't eat or drink it. Telephone calls to other rooms in the hotel are also routinely charged for now to the tune of a couple of bucks a call. Unless you ask for an itemized bill when you check out, you've no idea.
Or how about this one? You get a warning from your credit card supplier that you've got 24 hours to pay your overdue monthly bill, and that you can pay by phone by dialing an 800 number. You're flummoxed, so you call and pay. Guess what? The credit card supplier is gonna charge you $10 or $15 simply for taking your call. No rhyme, no reason. But they do it because they can get away with it.
And so it goes. Hidden fees that nickle and dime us to death, hidden in services and technological life-simplifiers. Millions of us are overcharged, and it all adds up to big profits for the corporations.
According to Sullivan, part of the problem is that there's simply no regulatory watchdog. The Federal Trade Commission, which should be looking out for consumers, employs half the people it did twenty years ago. But in that same two decade period, the technology which corporations manipulate to bilk consumers has exponentially grown. Go figure.
Late last year, Mark Schapiro's Exposed: The Toxic Chemistry of Everyday Products and What's at Stake for American Power blew the whistle on what a horrible job the government is doing in regulating harmful chemicals in consumer goods. Bob Sullivan has done something similar when it comes to toxic hidden fees. Highly recommended for the consumer who wants to quit being manipulated.