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If you have a good grip on your spending, you know exactly how much you’re paying every month for electricity, cable, Internet, etc. But if you take a closer look at those bills, you might notice little charges that work their way into the total you pay. Investigative journalist David Cay Johnston examined a host of common contracts and found that there are confusing fees wrapped in just about everything we pay for — from utilities to 401(k) account statements.
“Despite the fact that the Federal Communications Commission has what it calls ‘Truth-in-Billing’ rules that say you must clearly and plainly explain each charge, they allow variations of this by every one of the companies that mislead the public,” says Johnston.
Take your phone bill for instance, do you get charged an FCC admin fee or a fed universal service fund charge? When and why did these types of small fees start cropping up?
“I inspected phone bills going into the early part of the last century,” says Johnston. “We used to have a telephone monopoly, Ma Bell. It was incredibly reliable, but stodgy and not interested in innovation. And for long distance, very expensive. That’s where they made their money. So we now have competition supposedly because the Justice Department broke up the phone companies. The problem is we don’t really have competition. The seven regional Bells that were created in 1984 were each geographic monopolies. And now they’ve consolidated back into a duopoly into AT&T, the name of the original Ma Bell, and Verizon.”
In some cases, fees hidden in the fine print of your bills is slowly killing you — 10 cents at a time.
“In some cases you’re getting gouged $100 a month and when you get all done with it I show that for the typical American family, it’s several thousand dollars a year taken from you — a nickel, a dime, and sometimes $100 at a time,” says Johnston.
So what can consumers do to fight these fees? Johnston says consumers need to take action so that the rules can change.
“We need to have balanced rules that represent what in the utility business is known as ‘just and reasonable.’ Just and reasonable profits for the owners and just and reasonable prices to consumers. We need to have a consumer movement, which has been decimated,” says Johnston. “You have to say to your elected officials: I’m sorry, you’re not representing my interests.”