Enter your mobile number below and we'll send you a link to download the free Kindle App. Then you can start reading Kindle books on your smartphone, tablet, or computer - no Kindle device required.
Getting the download link through email is temporarily not available. Please check back later.

  • Apple
  • Android
  • Windows Phone
  • Android

To get the free app, enter your mobile phone number.

FREE Shipping on orders with at least $25 of books.
Only 2 left in stock (more on the way).
Ships from and sold by Amazon.com. Gift-wrap available.
Gotcha Capitalism: How Hi... has been added to your Cart
FREE Shipping on orders over $25.
Condition: Used: Good
Comment: This book has already been loved by someone else. It MIGHT have some wear and tear on the edges, have some markings in it, or be an ex-library book. Over-all it's still a good book at a great price! (if it is supposed to contain a CD or access code, that may be missing)
Have one to sell? Sell on Amazon
Flip to back Flip to front
Listen Playing... Paused   You're listening to a sample of the Audible audio edition.
Learn more
See all 2 images

Gotcha Capitalism: How Hidden Fees Rip You Off Every Day-and What You Can Do About It Paperback – December 26, 2007

4.1 out of 5 stars 49 customer reviews

See all 7 formats and editions Hide other formats and editions
New from Used from
"Please retry"
"Please retry"
$1.75 $0.01

Best Books of the Month
See the Best Books of the Month
Want to know our Editors' picks for the best books of the month? Browse Best Books of the Month, featuring our favorite new books in more than a dozen categories.
$14.95 FREE Shipping on orders with at least $25 of books. Only 2 left in stock (more on the way). Ships from and sold by Amazon.com. Gift-wrap available.
click to open popover

Frequently Bought Together

  • Gotcha Capitalism: How Hidden Fees Rip You Off Every Day-and What You Can Do About It
  • +
  • Stop Getting Ripped Off: Why Consumers Get Screwed, and How You Can Always Get a Fair Deal
Total price: $29.95
Buy the selected items together

Editorial Reviews

About the Author

BOB SULLIVAN is a senior writer at MSNBC.com who has concentrated on high-tech crime and consumer fraud. He is the nation's leading journalist covering identity theft, having written more than 100 articles on the subject since 1996. His work has been read by millions of Internet users, and reproduced in various outlets, including MSN.com, the Wall Street Journal Online, and ZDNet.com. Sullivan also makes regular television appearances on MSNBC, CNBC, NBC Nightly News, NBC's Today show, and various local NBC affiliates. He is the winner of the prestigious 2002 Society of Professional Journalists Public Service Award for his series of articles on online fraud. He has spoken before trade and government groups including the National Association of Attorneys General. He lives in Maltby, Washington, with his golden retriever, Lucky.

Excerpt. © Reprinted by permission. All rights reserved.

Chapter 1

Shrouding, Reverse Competition, and Other Corporate Tricks That Attack the American Way of Life

Some will rob you with a six-gun. Some with a fountain pen.

Woodie Guthrie

I. Paranoia?

Let me make a confession. I hate getting cheated. I mean, really, really, really hate getting cheated. I mean veins-pop-out-of-my- forehead, glad-I'm-not-getting-my-blood-pressure-checked-today hate getting cheated.

And yet, I feel like I'm getting cheated all the time.

I often open the mail with dread. It makes the hairs on the back of my neck stand up, as if I were some primal creature readying for a fight. I walk into a cell-phone store, check my online statements, or just turn on my television, and I feel like everyone is out to get me. I suffer from what a therapist might call low-level, background anxiety. I think someone is always trying to steal something from me.

Am I crazy?

When I was a child growing up just outside New York City during the 1970s, I learned to be afraid of getting mugged. But this is not that. The criminals I'm talking about don't bop anyone over the head and steal hundreds of dollars. These criminals slowly take $5, $10, and $20 from me, often with a smile. They pop a surcharge onto my monthly phone bill. They pad my TV bill with services I didn't ask for. They drain my bank account-drip, drip, drip-when I'm not watching. These hidden fees keep me up at night like the sound of a leaky faucet. I feel like I have to watch everything all the time because it's so easy to miss some statement on some form with some asterisk that means the company can take even more money from me. And when that happens, I suffer from what I call small-print rage.

Am I crazy? Or am I just paying attention? One thing I know for sure: I'm not alone.

I'm not a therapist, or a sociologist, but I feel on firm ground saying that small-print rage is a close second only to road rage as a source of stress in America today. As author of The Red Tape Chronicles on MSNBC.com, a twice-weekly column that exposes small print, corporate sneakiness, and other twenty-first-century headaches, I invite readers to share their woes with me. Tens of thousands have e-mailed and left comments on my blog as a desperate last attempt to get justice. I can see the exasperation in the amount of CAPITAL LETTERS that show up in their notes.

So I know: You suffer from small-print rage, too.

Sneaky fees peck away at us like a swarm of mosquitoes that ruin an otherwise beautiful summer evening. And like mosquitoes, an individual bite might seem trivial, barely more than a nuisance, but repeated bites can actually change the way you live. They chase you inside, make you build a screened porch, and in extreme cases make you sick.

As a too-sticky summer night breeds mosquitoes, today's business environment breeds sneakiness. Companies under pressure to keep advertised prices low have seized on trickery to pump profits up. The most successful firms are now the ones that hide their prices best: under asterisks, deep inside terms and conditions, in fees they call taxes, bills that come months after the fact, even around dark corners in auto dealerships where the manager's office is. Then, right when you think you just got a good deal, an unexpected bill comes, or a car salesman jumps out from behind the corner and yells:


One Gotcha might be irritating. A few might make you angry. But Gotchas are everywhere you turn now. They are a way of life for consumers. They are our new economic system, replacing our former system, the free-market economy. In Gotcha Capitalism, your personal finances are under siege. Mosquitoes might threaten your life with death by a thousand bites; Gotcha Capitalism threatens your finances with death by a thousand fees.

"C'mon, Bob," you might be thinking. "We're talking about nickel and diming. It's not that bad."

Yes, it is. I've got research to prove it.

During November 2006, I asked independent researcher Larry Ponemon of the Ponemon Institute to conduct a nationwide survey of fees and surcharges. Together, we asked consumers around the country how much they believed they'd lost to sneaky fees in the past twelve months. To be fair, we didn't allow much speculation; instead we asked consumers to identify the amount of hidden fees they'd later discovered in ten important product lines one at a time, such as cell phones, groceries, and travel.

The result? Those $5 and $10 charges really add up. Even with these limitations, Americans told us they lose $946 to sneaky fees every year, enough to stock a sizable retirement fund. And when you add up all sneaky-fee revenue, the total is simply massive. According to the survey, corporate America's take in the ten industries surveyed was $45 billion. To put that number in context, $45 billion is about equal to the amount of money stolen through the fastest-growing crime in the country, identity theft. ID theft is such an epidemic that presidential task forces have been formed to fight it. There are entire divisions of law-enforcement officials being trained to stop it. There is an entire industry of companies that has grown up to prevent it. However, I know of no single agency or company devoted to stopping the explosion of hidden fees, which cost our society just as much as identity theft.

Of course, the crime of hidden fees is not so dramatic. There are no spectacular million-dollar diamond heists accomplished in the name of deceased CEOs. Instead, hidden fees are a slow drip-drip-dripping out of Americans' hard-earned salaries. Cell-phone users, for example, reported to us that they pay about $5 to $10 more a month-on average- than they expect to, thanks to sneaky fees. That doesn't sound like much, until you consider there are more than two hundred million cell- phones user in the United States alone.

Now perhaps you'll think like I do, that the proliferation of hidden fees-and not identity theft-is the fastest-growing white-collar crime in America.

For consumers making $45,000 or less a year, that $946 in hidden fees can mean one less vacation per year, or no evening classes for additional job training. It can take a huge bite out of a family's retirement savings.

And that number is conservative. For starters, to make the study manageable, we limited the survey to ten likely culprits: cellular phones, credit cards, banks, airline travel, hotels, cable TV/ satellite, home Internet access, retirement services, insurance, and groceries. Detailed industry-by-industry discussion of these fees can be found in the Toolkit Section, Chapter 4.

Remember, this $946 total is an average. So for every consumer who manages to exert Herculean effort and minimizes hidden-fee expenses to a tidy $200 or $300, there's another who pays nearly $2,000 a year. It also only represents the sneaky-fee take among those ten industries-obviously, other kinds of companies stick their customers with fees, too.

Finally, this $45 billion total-that's just the sneaky fees consumers know about. Others are surely lurking out there underneath mountainous monthly bills that busy consumers miss, and couldn't reveal to us when asked.

It's easy to calculate sneaky-fee estimates that are much higher. Simply adding up analysts' estimates of total fee income from credit- card late fees, homeowners' title insurance, wacky hotel-resort fees and the like, consumers lose well more than $100 billion a year to hidden surcharges.

But the real total is probably even more than that-in 2004, Consumer Reports guessed it was around $216 billion annually. Your family's portion of that would average closer to $4,000 each year.

Gotcha! Perhaps those mosquito bites are starting to itch. But I have yet to describe the biggest bite of all.

That $4,000 annual drain is nothing compared to what Gotcha Capitalism is doing to your retirement. In the biggest fee swindle ever invented, hidden fees-siphoned off in total silence by Wall Street-will force you to work four, five, even six years longer than you should. They're stealing roughly one-third of the money the average American has set aside for old age. And get this: the better the investor, the greater the penalty. Later in this book, I'll show you how Wall Street fees can suck up fully 80 percent of the money a twenty-year-old invests for retirement. Eighty percent!

Hidden fees are so drastic now that they may even be screwing with the national inflation rate. Companies often don't supply surcharges and fee data to the Bureau of Labor Statistics, so when it computes inflation rates, fees aren't reflected. As a result, our national inflation rate is held artificially low.

Yes, hidden fees are a big deal.

These numbers might surprise you, but I'll bet you've had a sixth sense that something was amiss for a while. You wondered why the government keeps saying inflation is the lowest it's ever been, yet you feel squeezed tighter and tighter by monthly bills. And I'll bet you feel small-print rage once or twice a month. You know the feeling well. There you are, lying in bed at night, trying to convince yourself to forget how irritated you are at that $39 "courtesy overdraft fee" you just paid to your bank for buying a $3 hamburger with your cash card one day before your paycheck cleared.

But you don't have to take all this lying down. In my paranoia to avoid getting cheated, I've discovered something, and I want to let you in on the secret. We don't have to pay sneaky fees. And if you've already paid, don't worry: There are ways to get your money back. Gotcha Capitalism will tell you how.

Companies have spent years and billions of dollars conducting extensive research, learning just how to confuse you and take away your rights to a fair deal. This book will show you how they do it, and then show you how to reclaim both your money and your rights. With any luck, we can all start a movement to reclaim our economy from hucksters with huge market capitalizations, and create a marketplace where fair companies actually stand a fighting chance.

II. Tales from the Mouse Hole

The journey into the world of Gotcha Capitalism may temporarily increase your sense of rage when you find out what they think of us. You'll discover, for example, that corporations have armies of fee consultants who study more and more sneaky ways to separate you from your money. You'll see that they snicker behind your back while they trick you into one-sided contracts using typography that's so tiny, industry insiders call it "mouseprint." You'll learn that while you weren't paying attention, the idea of customer loyalty was thrown overboard by many American firms, and they now believe that pissing off customers is good business. You'll find out the U.S. Supreme Court has ruled that mailing you a single notice, even one you may or may not read, can constitute a binding contract.

Now to really learn how to hunt down hidden fees and kill them, you've got to know your enemy. You've got to learn to think like the enemy. To really understand mouseprint, you've got to meet the mice. So let's crawl into the mouse hole for a bit and have a look around.


What if, as a company, you want to be really, really sure consumers won't read the contract you give them? You ask your marketing people to study the problem. Marketers are experts at getting people's attention. So couldn't marketing tactics be thrown into reverse, and used to make sure some fine print slips by unnoticed?

In 2001, AT&T wanted its sixty million customers to quietly agree to waive their right to sue the company. It wanted no fuss, and no mess. So it carefully crafted a mailer that was specifically designed to be discarded.

This tale of deception dates all the way back to the breakup of AT&T's monopoly. After reading it, you might never toss junk mail into the recycling bin again.

The telephone behemoth was dissolved back in 1982, but the firm's complete deconstruction took decades. Almost twenty years later, regulators were still dealing with the fallout.

Before the breakup, AT&T had to obtain approval from federal regulators to increase prices. The process was called "submitting a tariff." But after the breakup, AT&T's monopoly was dissolved, and the tariff process was eliminated. AT&T was told by regulators to form normal contractual relationships with its customers by sending a contract home to every one. The company took the opportunity to stuff the contract with goodies, and took the concept of small print to new lows.

As AT&T prepared to send notices to sixty million people, a special "detariffing" team was formed. It carefully prepared a mailing that no one would notice.

Getting consumers to ignore the mailing was critical, because that meant they would silently submit to the new contract terms, however one-sided they were. No uproar, no bad publicity. The detariffing team decided the document would utilize what was called the "negative option"; consumers who didn't respond to the mailing were assumed to be in agreement. No "yes" required, no signature. Silence meant consent. Recycling meant surrender.

In July and August 2001, millions of the notices were mailed across the country. AT&T was not worried they would cause a stir. Its research had concluded that many of its customers were "not even likely to open" the letter. The company expected every one of them would be fooled into consenting to this absurd contract.

But not Berkeley resident and AT&T consumer Darcy Ting. She actually read the document. A Taiwanese immigrant and professional consumer advocate, Ting spent her days helping educate Asian Americans about consumer rights for San Francisco-based nonprofit group Consumer Action. Ting knew enough to scour AT&T's fine print. She noticed that the detariffing notice included a "legal remedies" section that forced consumers to surrender their rights to sue the company under virtually all circumstances. Disputes were to be taken to mandatory binding arbitration instead. The contract also barred consumers from participating in class-action lawsuits. Disturbed by the prospect of waiving so many basic rights so quietly, Ting enlisted the help of Consumer Action, and sued. Court documents from the case reveal just how far AT&T was willing to go to sneak its customer-service agreement past consumers.

The detariffing team at AT&T extensively researched the letter's language before sending it out. As a member of AT&T's detariffing team put it: "I don't want [the letters] to tell customers . . . pay attention to the details."

So the firm made sure to put in bold type near the top of the cover letter, "There's nothing you need to do." And in a research document called the "Qualitative Study," AT&T team members wrote that "after reading the bolded text . . . [at] this point most would stop reading and discard the letter."

Note: When a company says there's nothing you need to do, watch out.

Even the most enterprising consumers who scanned the document and went to the trouble of calling AT&T with questions faced still more hurdles. In a document titled "Detariffing-Customer Handling Experience," which was circulated to customer-service managers, the strategy for distracting consumers from the real point of the mailing was made plain.

New York Times best sellers
Browse the New York Times best sellers in popular categories like Fiction, Nonfiction, Picture Books and more. See more

Product Details

  • Paperback: 368 pages
  • Publisher: Ballantine Books; First Edition edition (December 26, 2007)
  • Language: English
  • ISBN-10: 0345496132
  • ISBN-13: 978-0345496133
  • Product Dimensions: 5.2 x 0.8 x 8 inches
  • Shipping Weight: 8.8 ounces (View shipping rates and policies)
  • Average Customer Review: 4.1 out of 5 stars  See all reviews (49 customer reviews)
  • Amazon Best Sellers Rank: #1,183,637 in Books (See Top 100 in Books)

Customer Reviews

Top Customer Reviews

By Kerry Walters VINE VOICE on January 7, 2008
Format: Paperback
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.
Read more ›
2 Comments 123 people found this helpful. Was this review helpful to you? Yes No Sending feedback...
Thank you for your feedback.
Sorry, we failed to record your vote. Please try again
Report abuse
Format: Paperback
Technology writer Bob Sullivan has compiled a powerful accounting of the various ways that American consumers are routinely being screwed by companies large and small. The driving force behind this explosion of unfair business practices is computer technology and the shift to an online/database economy: economic transactions are essentially invisible now, and it is much easier for profit-driven companies to simply make up a bunch of fees or "service charges" when no actual services are being provided, and tack them onto our already-expensive bills. Even that tiny fraction of consumers who figure out the scams will find it hard to get the bogus fees refunded, and the vast majority of consumers will either be unaware of how they're being ripped off, or will be too tired or busy to object.

Sullivan explains and documents with great clarity how companies have scientifically researched the most effective methods for hiding bogus fees, and what the tipping point are, so that they steal tiny amounts from millions of customers, but in ways that these customers either won't detect, or understand. And it doesn't matter if you catch one company ripping you off: they all do it, so there's really nowhere for consumers to turn. Don't like your cell phone company? Of course not, but is it worth it to drop them and go to another? Probably not, since they're all total crooks.

While this book does a great job cataloging these injustices, it leaves open the question of what we can actually do about it. The book promises readers that they can save $1000.00 if they know how to guard against various unfair business practices. What is really needed, however, is legal protection against these fraudulent and deceptive practices.
Read more ›
6 Comments 50 people found this helpful. Was this review helpful to you? Yes No Sending feedback...
Thank you for your feedback.
Sorry, we failed to record your vote. Please try again
Report abuse
Format: Paperback
I found Gotcha Capitalism to be really helpful, particularly the real-world anecdotes used to show how these fees happen to us every day. For example, after reading about the credit cards from department/furniture stores and the possibility of it appearing as though you don't have to pay interest, unless you read the mouse type. I immediately checked my statements, now that I know for what to look.

The information is very practical and useful in everyday situations.
Comment 21 people found this helpful. Was this review helpful to you? Yes No Sending feedback...
Thank you for your feedback.
Sorry, we failed to record your vote. Please try again
Report abuse
Format: Paperback
Besides informing us of the sneaky way companies try to get extra dollars out of us, there are also other eyeopening things we should know. One thing that got my attention was companies sending new contracts marketing them as "junk mail" so people couldn't call the company and say no thank you I do not accept this. Silence was golden. When challenged all the way up the Supreme Court, they found this contractually binding! Do not throw away your junk mail and read this book!!!!!!!!!!! there are soo many other things in here that you just have to read it.
1 Comment 12 people found this helpful. Was this review helpful to you? Yes No Sending feedback...
Thank you for your feedback.
Sorry, we failed to record your vote. Please try again
Report abuse
Format: Paperback
Sullivan tells readers how companies take advantage of us, focusing on 13 industries (credit cards, banks, cell phones - what's behind all those fees, getting out of "cell-phone jail," grocery stores, etc.)telling us how they do it and providing examples (including sample letters and phone scripts) of how to get your money back.

"Big deal," say some - "what's few dollars here and there?' Sullivan's independent researcher surveyed people and concluded the average was $964/year; "Consumer Reports" reported $4,000/family. So, it pays to pay attention to those asterisks, fine print, innocuous letters intended to obtain approval of contract changes w/o even reading, arcane/complex wording, and the signature line. (Sullivan reports an instance where buyers' unknowingly were also purchasing monthly credit insurance, failed to pay it, and racked up large late fees in addition.)

"Gotcha Capitalism" is also a good reference to wave at those contending "free markets cure everything."
Comment 8 people found this helpful. Was this review helpful to you? Yes No Sending feedback...
Thank you for your feedback.
Sorry, we failed to record your vote. Please try again
Report abuse

Most Recent Customer Reviews

Set up an Amazon Giveaway

Gotcha Capitalism: How Hidden Fees Rip You Off Every Day-and What You Can Do About It
Amazon Giveaway allows you to run promotional giveaways in order to create buzz, reward your audience, and attract new followers and customers. Learn more about Amazon Giveaway
This item: Gotcha Capitalism: How Hidden Fees Rip You Off Every Day-and What You Can Do About It