Companies Add Services to Bills Without Consent, Consumers Say

Feb. 1, 2010— -- Ever since her divorce a few years ago, Sandye Linnetz has kept her finances on a tight leash. When interest rates fall, she asks her credit card company for a better deal. She fixes her own computer and cleans her own house.

So when a mysterious $9.99 monthly charge appeared on her Verizon Wireless bill a few weeks after she renewed her contract, Linnetz did a double-take. The charge came without a description, she said, just a confusing jumble of letters, and she wanted to know what it covered.

A Verizon agent told her it was for monthly phone insurance, Linnetz said, adding that she never signed up for it.

"The customer service rep said, 'That's funny, they may have automatically put it on,'" said Linnetz, who had the charge canceled.

"I don't think it was an accident."

Linnetz is one of many U.S. consumers who said they have noticed unauthorized charges appearing on their phone, cable and even shopping bills. Like Linnetz, some of them believe that companies are intentionally "upselling" their customers with unnecessary services and hoping that the charges will go undetected.

"This kind of thing has been ongoing for some time," said Gary Almond, director of the Better Business Bureau of Los Angeles, explaining that he has often seen companies add services to their customers' bills without consent in his 20 years of working at the bureau.

"It's a profit center for most businesses," Almond said.

Such incidents of aggressive upselling are especially egregious because the charges are initiated by the companies themselves, not by third-party vendors who fraudulently smuggle themselves into bills in the rapidly growing practice of "cramming."

Mistakes Happen

Verizon Wireless would not address Linnetz's case but denied that the company upsells customers without their permission.

"We have 80,000 employees, so mistakes happen. But when they do, we work to make it right," spokeswoman Brenda Raney said. "We constantly train our reps to work with customers, to understand their needs and sell those customers the services they request."

Melissa Companick, president of the Better Business Bureau's New Jersey office, which collects complaints about Verizon Wireless, said she has not seen widescale abuses. She pointed out, however, that roughly 1 percent of complaints in the past four months involved the company's $1.99 "data package" charge added to customers' bills; sometimes several times a month.

Customers say the charge, meant to cover data downloads, is easily triggered by accidentally hitting one of the arrow keys on certain cell phones. They complain that it is incurred even if the command is immediately cancelled.

Verizon's Raney denied that customers are charged if they cancel the command but confirmed that the the button can't be disabled.

"Customers can personalize buttons on most of our phones," she said. "On some handsets, it's not possible to change the Mobile Web start button. If a customer is charged for services he hasn't used, he should contact us right away and we'll reflect that on their bill."

The "data package" charge has also irked regulators. The U.S. Federal Communications Commission sent a letter to Verizon Wireless in December, asking executives to explain how the service is triggered and how customers can opt out of it.

Mark Vitello, a former Intel Corp. technician from Manalapan, N.J., said he has been hit by the $1.99 charge for months and usually manages to get it reversed. But, Vitello said, he refuses to believe that phones are programmed that way by accident.

"I think this is being done to generate more revenue," Vitello said. "How many people are not looking at their bills and not seeing these charges and not complaining about them?"

Verizon Wireless is not the only company to have come under attack from consumers. Complaints have also been aired about cable television providers, car rental companies and even electronics stores.

Jennifer Edelston, who recently moved to New York City to work in public relations, said Time Warner Cable upgraded her to an HD Extra package for an additional $15 a month without her permission. When she called to find out why the service was suddenly appearing on her bill, a customer service representative conceded that he didn't know, she said.

Pressure From Above?

"I was really astonished," said Edelston, adding that her television doesn't even support high-definition signals. "They just put that on out of thin air."

Time Warner Cable denied that its sales representatives are intentionally adding services to generate profits.

"Our dedicated employees strive to provide excellent customer service," said Alex Dudley, a Time Warner Cable spokesman. "With more than 14 million customers, mistakes are bound to happen. When they do, we work hard with our customers to rectify them as soon as possible."

Experts say that even when companies have policies in place to protect consumers, aggressive sales people may try to sneak in charges in order to boost their performance numbers.

Mark Mannell, CEO of CarRentalSavers.com, a Web site that posts rental discount coupons, said aggressive upselling is common in his industry for that very reason.

"One of our biggest customer complaints is major car rental companies' adding services onto their bills without customer consent," said Mannell, adding that common charges include roadside assistance, unnecessary insurance and prepaid fuel. "The problem is counter agents are paid commissions on sales of these services and sometimes get a little carried away."

Ben Popken, co-managing editor of the Consumerist, concurred. Consumerist is a Web site run by the Consumers Union that allows disgruntled customers to air their grievances.

"It's a simmering trend," Popken said.

He said he believes that companies are setting unrealistic sales targets for their staff, driving them to add charges surreptitiously.

"We're in tough times, and companies are looking everywhere to make a little extra money," he said. "An intense amount of pressure is being put on the frontline sales staff to make up for some of the lost revenue."

One complainant on Consumerist, Patrick Solomon, said Best Buy tried to charge him $39.99 for "computer optimization" when he went to a Minneapolis store to pick up a $849 laptop computer he had ordered.

Optimizing Charges

Solomon, an insurance marketer, said that when a floor clerk handed him the laptop, he did not say that it had been "optimized" or that optimization came with a charge. (To "optimize" computers, Best Buy technicians remove factory-installed software and add updates in an effort to make the computer run faster.) When Solomon took the laptop to a cashier, he noticed that she rang up a $39.99 charge.

"I had no idea it had been optimized," said Solomon, who ended up instead buying a laptop that hadn't been optimized from a different branch.

Best Buy would not comment on Solomon's complaint and only reiterated the benefits of optimization.

"We understand optimization isn't for everyone but for those who want their computers ready to go out of the box with Windows updates, performance tweaks and uninstalled bloatware, it's beneficial," the company said in a statement.