Verizon to keep charging controversial fee despite $100M settlement(arstechnica.com)
arstechnica.com
Verizon to keep charging controversial fee despite $100M settlement
https://arstechnica.com/tech-policy/2024/01/verizon-wont-stop-charging-3-30-telco-recovery-fee-may-raise-it-again/
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In my opinion, advertised prices should always be inclusive of taxes and fees. Anything less is cost obfuscation. It's like the ol' eBay scam of 1 cent items that have the whole cost of the item built into the shipping just to confuse people.
Having lived in other countries, the US habit of 'nickel and diming' every sale with taxes and fees that aren't fully announced until payment is one of the most annoying cultural failings. Even governments do it; I recently bought a tree removal permit and my city tacked on a ~15% 'technology fee'. This after I wasted a good hour dealing with the absolutely awful website for the permit application - having to enter the same information on multiple pages by hand, broken address lookup, ugliest imaginable design and layout.
I won't defend most of the practices but sales tax is, in at least some US states, required by law to be listed separately.
example: See Kentucky Revised Statues (KRS) chapter 139 section 210 paragraph 1: (PDF) https://apps.legislature.ky.gov/law/statutes/statute.aspx?id...
edit: cited example
example: See Kentucky Revised Statues (KRS) chapter 139 section 210 paragraph 1: (PDF) https://apps.legislature.ky.gov/law/statutes/statute.aspx?id...
edit: cited example
Not to be argumentative, but:
- laws are often written by lobbyists
- you can list the information on the shelf price ticket/in ads, and still show the out-the-door price most prominently
I don't care for sales tax/VAT as a policy matter, but even less do I like the mental overhead of having to mentally inventory it every time I go shopping. The only exception is when some stores do a 'we pay the sales tax' sale (presumably because it's easier than marking everything down individually), and for once the sticker price is what I pay at the register.
- laws are often written by lobbyists
- you can list the information on the shelf price ticket/in ads, and still show the out-the-door price most prominently
I don't care for sales tax/VAT as a policy matter, but even less do I like the mental overhead of having to mentally inventory it every time I go shopping. The only exception is when some stores do a 'we pay the sales tax' sale (presumably because it's easier than marking everything down individually), and for once the sticker price is what I pay at the register.
Is there any particular reason why retailers couldn't print both the total price and how much of it is sales tax on the same price tag? The legislative intent seems to me that they don't want taxes to be absorbed by retailers[0], not that they want to force people to multiply things by some percentage in their head.
[0] Read: subsidized by other places with lower tax rates
[0] Read: subsidized by other places with lower tax rates
That one penny eBay truck may have been meant to confuse people in some cases, but it was more likely that it was a way to get around eBay fees. For a time, ebay only charged their 15% based on the sale price, exclusive of the shipping cost. Once eBay noticed a lot of people doing this, they changed their fee structure and I very soon after started seeing a lot fewer penny items with high shipping cost.
One complication of this is that sales taxes can apply down to the city level, meaning the amount the vendor collects after tax can be somewhat variable. This would make a lot of sense if we had a federal sales tax that was just distributed to states based on the purchase location.
Consider a merchant in Seattle, Washington, USA that has several stores around town wanting to run an ad on a billboard or on radio or on TV or in the Seattle Times for a product that is available at all its stores.
The total sales tax could be any of the following, depending on the location of the particular store in the city that the consumer actually buys from: 9.2%, 10.1%, 10.2%, 10.25%, 10.3%, or 10.5%.
How should that be advertised?
Similarly for services except the sales tax is based on where the service is consumed rather than on the location of the seller.
The total sales tax could be any of the following, depending on the location of the particular store in the city that the consumer actually buys from: 9.2%, 10.1%, 10.2%, 10.25%, 10.3%, or 10.5%.
How should that be advertised?
Similarly for services except the sales tax is based on where the service is consumed rather than on the location of the seller.
The store could advertise the sale price it wants, and deal with the taxes internally based on each location. Some locations have higher tax rates than others... Businesses know that, and could make location decisions based on that if they think the 1% swing is important.
Then you would undermine the ability of Capital to isolate and shame higher taxing areas.
Yes, the full price needs to be listed. At the same time, if there is the need to disaggregate the items so you can see where your money is going. For example, how much is tax that goes to the government (and might be less if you lived in a different jurisdiction), and how much goes to the company? Among the latter, how much is for the base service versus addons (that you might not need)?
The argument against this, specifically with regard to taxes, is that baking in the tax conceals the impact of that tax from the consumer. Obviously this primarily applies to sales taxes since production taxes aren't consumer facing (even if they impact consumers) but it's still better imo than simply not having that information since most laws are already fire and forget type affairs and so their costs can compound over time to degrees that aren't as immediately obvious to the public if they aren't displayed frequently and visibly.
I'm not objecting to knowing what the taxes are, I'm objecting to companies being able to hide the taxes to make switching look like a better deal than it actually is.
If Verizon advertises, say, $50/mo cellphone service, they're actually going to charge you an extra $15 or so, but they won't tell you what you're paying in taxes until you've actually signed up for the service and paid the switching costs. I want Verizon to advertise $65/mo ($50/mo base + $15/mo fees).
If Verizon advertises, say, $50/mo cellphone service, they're actually going to charge you an extra $15 or so, but they won't tell you what you're paying in taxes until you've actually signed up for the service and paid the switching costs. I want Verizon to advertise $65/mo ($50/mo base + $15/mo fees).
Some phone providers just eat the taxes, and that's fine at some level, but also problematic if you're on a $15/month plan and your city charges a $5/month per line telecom tax and other cities don't. And I'm not a fan of hiding mandatory uniform fees.
But how does Verizon run a national advertised price and include the taxes when telephone taxes vary based on your city, county, and state, and sometimes which part of the city/county.
If they mail it to you, then sure, they should be able to calculate it assuming your main service address is the same as your mailing address. But even if they have it in the window at their shop, they could include the taxes as if you lived at the shop, but actual taxes will be based on your service address.
But how does Verizon run a national advertised price and include the taxes when telephone taxes vary based on your city, county, and state, and sometimes which part of the city/county.
If they mail it to you, then sure, they should be able to calculate it assuming your main service address is the same as your mailing address. But even if they have it in the window at their shop, they could include the taxes as if you lived at the shop, but actual taxes will be based on your service address.
Don't have a nationally advertised price, because the cost of telecom services isn't nationally identical. Instead:
- Use the highest possible taxes and fees for any address in the service area of the store. Nobody is going to feel deceived if it turns out they had to pay less money for their phone service. - Provide a low and high range of taxes and fees for that same area and fine print that taxes vary based on service location. Verizon can't charge more than the high amount, and the low amount has to correspond to at least one service area that is actually billed that amount. - Provide a table listing out taxes, fees, and total price for each tax zone within the service area. This could be combined with the other two, and probably should be available unless there's, like, 200 different tax zones in the area of the store.
All of these are a darned sight better than "we don't have to mention anything about taxes and fees until you're a month into the contract and they can be any number we please".
- Use the highest possible taxes and fees for any address in the service area of the store. Nobody is going to feel deceived if it turns out they had to pay less money for their phone service. - Provide a low and high range of taxes and fees for that same area and fine print that taxes vary based on service location. Verizon can't charge more than the high amount, and the low amount has to correspond to at least one service area that is actually billed that amount. - Provide a table listing out taxes, fees, and total price for each tax zone within the service area. This could be combined with the other two, and probably should be available unless there's, like, 200 different tax zones in the area of the store.
All of these are a darned sight better than "we don't have to mention anything about taxes and fees until you're a month into the contract and they can be any number we please".
Or they won't tell you until you receive your first bill, when it's far too late to cancel the contract.
Goods distibuted in samw geographical area generally have similar prices even after transportation, so shop in county A that has lower tax, will be cheaper than same shop 1 kilometer (1 mile) in county B, that has higher tax. Why would the shop want to hide the tax?
In EU shops are made to show price per kilogram / liter too.
In EU shops are made to show price per kilogram / liter too.
Ahahaha, like retailers care about me so much and want me to be more active in local politics. That could be achieved by including the information on the receipt, but omitting it from the advertised price is a low grade scam.
I agree that taxes need to be applied separately so the public knows how much they are paying in taxes. Also, if you required including the tax, it would not be possible for most sites to advertise any prices without the user creating an account, providing their shipping address and logging in, since tax rates vary by country, county, even municipality.
Please explain in excruciating detail the need for an account to provide a single input box for zip code to just calculate fees? I need a serious breakdown of the logic behind this position, because from where I'm sitting, it seems to me like you could determine someone's "country, county, even municipality" with that single piece of data and no more.
Zip codes aren't specific enough to determine tax rates. Zip codes are assigned by the post office to facilitate delivery of mail, not to determine which taxing districts an address belongs in. You really need the whole address sometimes. Because the city name on the mailing address often indicates the city, but not always. And some taxing districts don't follow city boundaries anyway. And you need a process to handle exceptions, because boundaries are complex and sometimes mistakes are made.
Fair enough! However...
I'm still not seeing why that experience requires an account, so while this response is academically interesting, it doesn't actually address the purpose of my comment. Any reason why these calculations can't be performed without an account? Any reason why needing to enter the street address is functionally different from needing to enter the zipcode for this functionality, or were you just attempting to add detail/nuance?
I'm still not seeing why that experience requires an account, so while this response is academically interesting, it doesn't actually address the purpose of my comment. Any reason why these calculations can't be performed without an account? Any reason why needing to enter the street address is functionally different from needing to enter the zipcode for this functionality, or were you just attempting to add detail/nuance?
This judgement only settles overcharges through Nov 8th. If Verizon keeps charging this discretionary undisclosed fee, hopefully enterprising class action lawyers will make suing them for settlements an ongoing business model. Future judgements against the same behavior might also make judges amenable to increasing punitive damages on top of recovery of actual damages. I suspect that might eventually "encourage" Verizon to reevaluate the cost/benefit of continuing this practice.
Did they make over $100M from the fees? If so, it's still profit.
Because they make more than $100m by keeping it.
Untouchable.
In this case they haven't been convicted of any wrongdoing, nor was there any precedent that what they did was wrong. Given the above, them continuing to do whatever they were doing seems like the justice system working as intended? Obviously many people think they're guilty of something, but in this case it seems like the plaintiff's case was weak rather than verizon being "Untouchable".
They "haven't been convicted of any wrongdoing" because we have developed a detestable habit, in this country, of allowing—in some cases even encouraging—large companies and wealthy individuals to simply settle major lawsuits "without admitting any wrongdoing" rather than forcing them to actually, yes, admit that lying and taking money they weren't owed and didn't need (or whatever other particular awful thing a given suit is about) is wrong, and requiring them to change their behavior.
All because it would be more expensive to actually see justice carried out.
It really makes me wonder just how expensive it would be, in net, to nationalize and/or break up companies like Verizon, and force them to be good corporate citizens either by running them directly, or by cutting them down to a much more manageable size and actually giving them meaningful competition again for the first time in far, far too long.
All because it would be more expensive to actually see justice carried out.
It really makes me wonder just how expensive it would be, in net, to nationalize and/or break up companies like Verizon, and force them to be good corporate citizens either by running them directly, or by cutting them down to a much more manageable size and actually giving them meaningful competition again for the first time in far, far too long.
>They "haven't been convicted of any wrongdoing" because we have developed a detestable habit, in this country, of allowing—in some cases even encouraging—large companies and wealthy individuals to simply settle major lawsuits "without admitting any wrongdoing" rather than forcing them to actually, yes, admit that lying and taking money they weren't owed and didn't need (or whatever other particular awful thing a given suit is about) is wrong, and requiring them to change their behavior.
Except in this case it's not really clear that taking them to trial would result in a guilty verdict against them. It's also possible that they get off 100% scot free instead. I don't know about you, but if I was a consumer I'd rather get a paycheck in the mail right now, than having both sides' lawyers rack up thousands more billable hours (which will be paid from the settlement and/or future bills) for an uncertain promise of a bigger paycheck and them being declared as guilty.
Except in this case it's not really clear that taking them to trial would result in a guilty verdict against them. It's also possible that they get off 100% scot free instead. I don't know about you, but if I was a consumer I'd rather get a paycheck in the mail right now, than having both sides' lawyers rack up thousands more billable hours (which will be paid from the settlement and/or future bills) for an uncertain promise of a bigger paycheck and them being declared as guilty.
Not a Verizon customer, but any regular consumer is only going to be getting $20 or $30, max. If they are guilty, then letting them buy their way out of it without admitting it is BS; if they're not, then letting them be shaken down without being at fault is BS. Reducing everything to expected value and probabilistic calculations means that an ever-increasing volume of commercial and legal decision-making is based on bluff rather than principle.
The "detestable habit" is just the nature of an adversarial court system. If both the defendant and plaintiff agree to drop the matter, how else can you continue the case? Do you have the judge start the Verizon inquisition[0] and become (or appoint) a new plaintiff? Who's going to pay for their time?
It sounds like what you want is the FTC to prosecute the case in lieu of the plaintiffs. That's possibly viable, but they also kind of have their hands full with Google.
[0] Yes, the alternative to an adversarial court system is literally the Spanish inquisition!
It sounds like what you want is the FTC to prosecute the case in lieu of the plaintiffs. That's possibly viable, but they also kind of have their hands full with Google.
[0] Yes, the alternative to an adversarial court system is literally the Spanish inquisition!
Prosecuting cases in lieu of the pontiff is what criminal justice and regulatory enforcement is all about.
It’s not the Spanish Inquisition.
It’s not the Spanish Inquisition.
The adversarial legal approach is highly overrated.
They paid a 100M settlement. Pretty sure that's not a charitable donation.
That makes as much sense as "he agreed to a plea bargain; he must be guilty of something".
> "he agreed to a plea bargain; he must be guilty of something".
What do you think they would be pleading to?
What do you think they would be pleading to?
To piggy back on this.
If you want to not admit guilt but also give up, you can also plea "No Contest" which is typically what you do every time you pay a traffic fine (i.e. Speeding Camera.
If you want to not admit guilt but also give up, you can also plea "No Contest" which is typically what you do every time you pay a traffic fine (i.e. Speeding Camera.
You might also hear it as nolo contendere (Latin for "I do not wish to contend") or an "Alford plea" (after the first person to use it).
I prefer the term "Alford plea" because it is indicative of the common use. Alford was charged with murder and plead guilty because the prosecution was going to seek the death penalty if he didn't.
Where an innocent or guilty plea addresses the facts of the case, an Alford plea solely addresses the case itself. Someone who makes an Alford plea is opting not to address factual evidence, but conceding that they believe the jury is likely enough to convict that there is no reason to oppose it.
To get on my soapbox for a moment, the existence and prevalence of Alford plea's is an indictment of the US judicial system. It's something people plea when they're innocent, but don't want to risk the enormous penalty the prosecution will seek at trial. Trial sentencing has become tantamount to punishing someone for exercising their constitutional rights to a trial. The prosecution is fine with a slap on the wrist until you want to exercise your right to a trial, and suddenly nothing but a lengthy jail term is appropriate.
I prefer the term "Alford plea" because it is indicative of the common use. Alford was charged with murder and plead guilty because the prosecution was going to seek the death penalty if he didn't.
Where an innocent or guilty plea addresses the facts of the case, an Alford plea solely addresses the case itself. Someone who makes an Alford plea is opting not to address factual evidence, but conceding that they believe the jury is likely enough to convict that there is no reason to oppose it.
To get on my soapbox for a moment, the existence and prevalence of Alford plea's is an indictment of the US judicial system. It's something people plea when they're innocent, but don't want to risk the enormous penalty the prosecution will seek at trial. Trial sentencing has become tantamount to punishing someone for exercising their constitutional rights to a trial. The prosecution is fine with a slap on the wrist until you want to exercise your right to a trial, and suddenly nothing but a lengthy jail term is appropriate.
Why are you defending a billion dollar company? Is Verizon so hard up that they need random people to defend their shit business practices? I don’t get why you’re so invested in this morally reprehensible practice.
>Why are you defending a billion dollar company?
"Why are you defending an accused rapist/pedophile/murderer?"
>Is Verizon so hard up that they need random people to defend their shit business practices? I don’t get why you’re so invested in this morally reprehensible practice.
I'm not sure how you got the impression I support "their shit business practices". If you read my comments more carefully you'll see I was only arguing that from both a practical and legal standpoint, they don't have to change their behavior. I did not make any sort of normative claim.
"Why are you defending an accused rapist/pedophile/murderer?"
>Is Verizon so hard up that they need random people to defend their shit business practices? I don’t get why you’re so invested in this morally reprehensible practice.
I'm not sure how you got the impression I support "their shit business practices". If you read my comments more carefully you'll see I was only arguing that from both a practical and legal standpoint, they don't have to change their behavior. I did not make any sort of normative claim.
Technicalities are a bane of a civilized society. We have come so far that it’s acceptable to be dickheads in your business of it’s merely legal to do so. Arguments of “it’s legal” are fine in court but in society we should expect people and companies to behave better than the minimum. Arguments like yours lend credibility to things like this.
>Technicalities are [...]
Plaintiffs settling is hardly a "technicality".
Plaintiffs settling is hardly a "technicality".
Did Verizon charge deeply misleading fees whose sole purpose is to make it hard to tell how much you'll actually be paying when you sign up for the "$59.99*†‡" plan?
Yes, unquestionably.
Is this morally reprehensible?
Unless your entire notion of "morality" is "what it's possible to get away with legally," yes, unquestionably.
Do they plan to continue doing this, despite it being abundantly clear that it's morally reprehensible and legally at least questionable?
Yes, that's the entire point of the article.
So yes: the plaintiffs settling is absolutely a "technicality" if what you're concerned about is justice, rather than pure legal procedure.
Yes, unquestionably.
Is this morally reprehensible?
Unless your entire notion of "morality" is "what it's possible to get away with legally," yes, unquestionably.
Do they plan to continue doing this, despite it being abundantly clear that it's morally reprehensible and legally at least questionable?
Yes, that's the entire point of the article.
So yes: the plaintiffs settling is absolutely a "technicality" if what you're concerned about is justice, rather than pure legal procedure.
> Did Verizon charge deeply misleading fees whose sole purpose is to make it hard to tell how much you'll actually be paying when you sign up for the "$59.99*†‡" plan?
>Yes, unquestionably.
Here's a verizon brochure I dug up from 2016, when the alleged wrongdoing started: https://web.archive.org/web/20160709005827/http://www.verizo...
On page 10 the administrative fees are clearly spelled out. I think it's safe to say that the fees are buried, but is that "deeply misleading"? I don't know, because the question in fundamentally subjective. The same goes for "morally reprehensible".
>Do they plan to continue doing this, despite it being abundantly clear that it's morally reprehensible and legally at least questionable?
The article mentions they changed their marketing/communication materials to make it more obvious. It's not like they're doing everything the same. That would be dumb.
>So yes: the plaintiffs settling is absolutely a "technicality" if what you're concerned about is justice, rather than pure legal procedure.
Justice arguably includes legal procedure. Summarily executing a rapist on the scene isn't justice, even if we know for a fact the perpetrator did it.
>Yes, unquestionably.
Here's a verizon brochure I dug up from 2016, when the alleged wrongdoing started: https://web.archive.org/web/20160709005827/http://www.verizo...
On page 10 the administrative fees are clearly spelled out. I think it's safe to say that the fees are buried, but is that "deeply misleading"? I don't know, because the question in fundamentally subjective. The same goes for "morally reprehensible".
>Do they plan to continue doing this, despite it being abundantly clear that it's morally reprehensible and legally at least questionable?
The article mentions they changed their marketing/communication materials to make it more obvious. It's not like they're doing everything the same. That would be dumb.
>So yes: the plaintiffs settling is absolutely a "technicality" if what you're concerned about is justice, rather than pure legal procedure.
Justice arguably includes legal procedure. Summarily executing a rapist on the scene isn't justice, even if we know for a fact the perpetrator did it.
Thank you, I’m not very good with words and your explanation is way better than mine!
And the cost of the settlement will be recovered with the higher fees.
Could another party replay this case, and they would have to settle again?
The article says that they ended up changing the language in their marketing/contracts, presumably to make it more lawsuit-proof. The plaintiff lawyers also settled, which suggests their case isn't a slam dunk. Given the two factors suing again is probably a very risky proposition.
One thing that rubs me the wrong but same way about stories like this, certain layoffs, ads in paid subscriptions, the sales of personal data, and shoddy-safe planes falling out of the sky, is the insincerity of it. Verizon is charging a separate hidden fee, supposedly to pay for gov't fees, but it's not a gov't mandated fee. Anyone with eyes open can smell the double talk. It's tiresome to constantly be lied to and need to be guarding against institutional pickpockets.
It's exhausting. I wish there were a way to quantify this, because it feels more and more unabashed, egregious, common and normalized.
Maybe they'll change course if we throw enough adjectives at them.
What ads and what sale of data? Ars does not sell or give away paid subscriber data, and they certainly don't show ads to paid subscribers.
I don't see anywhere in the GP a suggestion that anything in their criticism is directed at Ars Technica...
Sorry for the lack of clarity. It was a general comment about certain trends I've been noticing and not specific to any one offender in particular. Certainly not Ars, I'm not familiar with them on that level.