Saturday, February 5, 2011

The Wear-You-Down Technique

Credit Card Companies, online service providers, wireless communications companies - just about everyone these days uses the "wear you down"  technique to screw consumers.

Computer error.  A foul-up by the customer service rep. We've heard these excuses before - again and again, to the point where we expect them these days.

Why does this happen - in an age of reliable computers?  It happens by design, and it is called the "Wear 'em down" technique of marketing and billing.

AOL pioneered this technique back in the 1990's.  As DSL and Cable Modem became more popular - not to mention low-cost dial-up ISPs, many people decided to cancel their AOL accounts, which were set up to bill $19.95 or more per month to their credit cards.

So they go online, click on "close account" and figure they're done.  But the next month, if they are astute and check their statement (I check mine online DAILY) they notice another $19.95 charge to their credit card.

So they call customer service, wait on hold for a half-hour, and finally reach someone, who, after saying "How are YOU today?" tells them that it was a charge for the last month's service, but "not to worry" as it will be the last charge.

So of course, the next month, there is another charge, and they call again.  "Whoops! Our bad!  Computer Error!" says the customer service rep, who promises to "fix that right up for you!" and of course, does nothing.

And so on and so on.  For many folks, this process goes on like a sick joke - for months and months, and never gets resolved.  Some folks end up canceling their credit card, just to get the charges to stop.  Others, who never check their statements carefully, might end up paying for years before they notice it.

A recent article in the New Yorker suggests that many AOL "subscribers" may be of this latter variety - people who pay for AOL but don't realize they don't need it or use it.

And of course, AOL is just one example - an egregious one.  Many online service providers, subscription providers, and the like, have engaged in similar negative option techniques that are nearly impossible to cancel before your credit card is dinged for hundreds of dollars.

I called Discover today, as I had canceled the credit card back in November.  I had talked with them back then, and they told me that a $50 credit on the card (their vaunted "cash back" on $10,000 of purchases) would be mailed to me shortly.

Define "shortly."

So I get a statement by e-mail today, still showing the $50 credit on the card, which apparently will stay there forever, until I say otherwise.  So I call them and say otherwise - yet again - and the customer service rep does the "My Bad!  Computer Error!  So Sorry!" dance yet again, and promises a check will be sent out "right away".

Should I hold my breath?

Funny thing, too, because I had a positive balance on my Capital One card, and they automatically sent me a check for the balance after 30 days - because that is their policy, and because their computers actually work, and because they are not rat bastards like the Discover Card people (and their interest rate is half that of Discover).

Score:  Capital One:  10   Discover: 0

What's in your wallet?  Not a Discover card anymore!

The "wear you down" marketing and billing approach is usually a sign of a dying company doing anything in its power to keep even a few dollars in the coffers.  Perhaps Discover, which has high interest rates and is accepted in fewer places than AMEX, is on the way out.

The problem with this "screw the consumer" type of business practice, is that eventually the consumer gets tired of being screwed and looks at taking on new business relationships with trepidation.  For example, even assuming I wanted to get XM radio or OnStar service in my car, do I really want to sign up for more of this "My Bad!  Computer Error!" type of crap from yet ANOTHER company whose every move I have to monitor, because once you turn your back they steal from you?

No, I don't think so.  The more services and banks and credit cards you have, the more you have to watch these people like a hawk, because chances are, they will try to wear you down.

And that's the deal:  These people are NOT YOUR FRIENDS, and activities like this illustrate how modern American businesses are really screwing the pooch when it comes to customer service.  If they can wear you down and pocket $50, they will.  And they do.  And cumulatively, it adds up to a lot of money.  And this is DAMAGING TO THE ECONOMY as it provides incentive not to consume.

VONAGE, for example, nailed me with a $39.99 "termination fee" when I disconnected from their service (again, another example of a dying company?).  I liked VONAGE, but when I went to satellite Internet, couldn't use their service.  At least in their case, a class action lawsuit was filed, and I have a chance to get some of my money back.

As you get older, you get more and more tired of these "screw you" deals, whether it is the antics of the car salesmen, or the impossible complexities of cell phone billing.  Pretty soon you just get tired of it all - because in every instance, it is you the consumer who is on the short end of the stick - you end up getting screwed out of small amounts of money, and they make it nearly impossible to get the money back, without spending hours on the phone.

So the best defense is to not consume at all - or limit your consumption as much as possible to those few things you really think you need.  And if you find a retailer who is honest and decent - stick with them like glue.   Never do business with a company who makes it easy to sign up and nearly impossible to terminate.   It is like going into a casino - they have a conveyor belt (literally) to drag you in, but finding an exit is nearly impossible to do.

DISCOVER has played their hand here - showing me exactly what sort of company they are, with this "my bad!  computer error!" excuse-making crap.  Computers do not go "haywire" anymore, and that excuse is as lame as can be.  I am not sure why they think they can get away with this nonsense in this day and age, either.

But again, perhaps it is the last gasps of a dying company?  13.5% APR for a card no one takes is no great incentive to have one - even if they throw pennies at you with a "cash back" reward scheme.