It doesn't surprise me. Spectrum is currently the only non-dsl provider in my area, so I'm basically forced to use their service since I moved here. The first time I paid with one of my cards, the bank flagged it as suspicious and denied the transaction. Spectrum then charged me a $25 fee and initially refused to refund it until I was very persistent and annoying.
They also constantly send me spam regarding Spectrum mobile with subjects like "Your response is required". I even used their cost estimator to compare it to my current provider, Mint Mobile. When I entered my current plan into their calculator, it told me that I made a mistake (because it was so much cheaper.)
I've never understood why ISPs and cellular carriers aren't prepaid by default, which would avoid the credit system entirely. Do these companies benefit somehow by being post-paid and relying on credit?
It's a massive benefit. There's a couple parts to it, but a huge thing is you need to remember is there's effectively zero marginal cost to the ISP/cell carrier for the next customer - it's nearly all fixed costs.
If a pre-paid customer doesn't have the money, they'll either go without or downgrade their service. Less revenue for the company.
If a post-paid customer doesn't have the money...they might later. Their bill can be rolled forward, half paid, eventually sold to collections, whatever. More revenue in the long-term no question. Also, if you can charge your post-paid customers for all the things they opted into but didn't think too hard about the pricing on - SMS messages used to be $0.10 in my market, lots of parents opened up bills with 2000 text messages on them. Long distance and overseas calls were hugely expensive (and still are, in some cases) - big money makers for the carriers.
And contracts, of course. Customer acquisition is one of the biggest problems in the industry, getting people on a monthly billing cycle keeps them from easily switching.
You are overestimating customers' willingness to prepay. Using the service all month and getting a bill at the end is a hardwired habit and how all utilities have operated forever. Increasing the up-front cost for a new customer by $50-100 is going to be a huge hit for the business.
True, with one big but. Once a customer is established, especially if you can get them in the autopay system, the prepaid charge becomes just another bill as well. Most customers won't think too hard about whether they are paying last month's bill vs next month's service charge.
> Most customers won't think too hard about whether they are paying last month's bill vs next month's service charge.
Sure, but you still have to switch the billing cycle from end of month to beginning of month somehow. Customers are definitely going to care if they are suddenly hit with a 2x charge.
Or instead of credit just require a one-time deposit like utilities do when you don't provide a SS# for the credit check. It can still be post-paid, just pocket the deposit and kill the service if they miss paying a month.
And it's fantastic until you need anything beyond the most basic service. Their IPv6 deployment is awkward and requires a fairly complex script to work on my router. I called asking to add on static IPs and learned they aren't supported on the prepaid plan.
> It's outrageous that companies in the modern day and age can just elect to make cancellation difficult or impossible and keep taking money from yo
I'm not sure you read the story. A small claims judge would make short work of that situation wherein they will inform Spectrum that they do not want this to go to jury.
However, this story is about a guy getting a resubscription extortion letter in light of a non-existent debt. Might as well be a foreign Prince scam because there are no damages.
I'm not sure you're familiar with how the "you can't cancel" trick works.
The situation in TFA is what happens if you try to escalate an ignored cancellation request by stopping payment. The company graciously extends debt to cover the service that you surely didn't intend to cancel, and when your balance -- augmented by late fees, of course -- has grown to be worth their while, they try to collect.
Variations on this theme exist. Sometimes you take a less than completely active role in the sign-up process and only learn about it on collection. Sometimes you "successfully" cancel and they just fail to process it. The common theme here is ongoing transactions for ongoing service (that isn't actually delivered) in the absence of ongoing consent. It's dysfunctional that we allow this in any form, regardless of whether the form in TFA is slightly less dysfunctional or slightly more dysfunctional than the most common form, which is what I structured my comment around.
If subscription services had to register with your credit card, credit reporting agencies, or some authority that gave you a (complete!) list and a cancel button, all of these problems would go away, along with the awful business models that they enable.
Oh, I'm familiar. Lots of people are familiar. This is a question of tort law wrapped in corporate sponsored "mandatory mediation", which never rules in your favor or delays. I am asserting that while the dispute is small it can be quickly resolved because the court is happy to mediate immediately regardless of the contractual body appointed.
It's when you exceed the small claims or wait, ie you're afraid to go to court or are lapse in monitoring your own finances, that the problem accelerates out of control.
I know what you mean. Long ago, I got Speakeasy when they had a great reputation. At some point, they turned into Megapath, but service seemed okay... at least until I tried to cancel.
I filled out their form online and went through the dance to cancel, but never got any confirmation. Only a couple months later did I hear from them, because my credit card had expired.
I had to make a deal with them to process my cancellation before paying the remainder of the bill. Strangely, it worked instantly when I was on the phone with the rep. Go figure?
It is outrageous, but the blame doesn't lie with companies doing precisely what companies are intended to due, the fault lies solely with politicians who reliably fail to put their voters interest above that of their donors.
Companies are intended to extort money from former customers based on real and implied threats? What is the claim here? Are you saying for profit companies are inherently parasitic and politicians need to pass specific regulations to prevent every instance of bad corporate behavior? Or is it that politicians have created systems that makes companies acting antisocially inevitable? Or is it that companies have made adequate enough campaign contributions to have politicians look the other way?
The obvious claim is that companies will (and should) use any legal means to profit. If we don't want a certain behavior from a company we should elect people who support passing laws to regulate those activities. As has been done for generations.
But to pretend companies should just act like we want is ridiculous.
The law and profit motive aren’t the only things guiding company behavior.
Those factors are very dominant, but I don’t think that is the whole story. Companies are composed of individuals, and individuals have complex reasons for their behavior,
much more than simply not going to jail and making money.
Spectrum has turned old equipment into a profit center. Twice now when I canceled and turned in my equipment I still had to file an appeal to keep from being charged. Full price of course - for some old cable box or modem they just throw in a landfill.
It sounds someone crafted a letter for people who own balance and made a mistake when they queried the CRM for a list of customers. I am not convinced that it was meant to be an actual threat to trash the recipient's credit score.
Agreed, if the customer owed something/missed a payment, then this letter makes sense.
This customer didn't owe anything, so clearly this letter wasn't intended for them, but got it by an error.
I'm all for pitchforking Comcast and other giants who have terrible business practices, but this article seems like it's trying to drum up angst when this can clearly be explained by a mistake.
If I had bad debt and an option to repay my debt or have it cancelled if I do X and X is reasonable, these are both good options.
It would be reasonable to include in the letter how much the debt is and the date of that perhaps. And with good intentions, an alternative way of resolving the issue. This letter is not friendly. I get letters with the same spirit and those bug me a lot.
Some people are bad with their finances and may believe that they had outstanding debt.
Although your suggestion is entirely plausible, shaking the chains is also plausible.
It would at least get me to call the company because the letter is written to suggest that there is outstanding debt.
If this was an error: The proper thing to do is a follow-up letter to apologise for the confusion and confirm that their credit rating is not at risk, until that happens it’s fair to assume the worst of the company.
This type of letter doesn't make sense no matter what, and if people receive something like this they should immediately file a complaint with the FTC for FCRA violations.
Please link a source for this one. Look, this is a great practice for sure, but we're in the realm of legal now.
I looked briefly[0] and couldn't find anything that explicitly that's what you need to do when describing options.
The only requirement that I can see they are *required* to do:
> furnishes negative information to such an agency regarding credit extended to a
customer, the financial institution shall provide a notice of
such furnishing of negative information, in writing, to the
customer.
And it needs to be 30 days. As far as I can tell, this is in good standing FCRA wise.
So this is what it's come to: The only sure way to cancel cable service is to have your lawyer send them a certified letter giving notice that you're breaking the contract and you will not be responsible for future debts. That way if they try any funny business later you can take them to court and have a pretty good chance of victory. (IANAL)
I don’t know about Spectrum, but that news page was pretty ”extractive”.
When trying to copy/paste from iPhone, it was all but inevitable to click an ad. When I tried to highlight a word, the whole page would highlight. When I tried to click off to deselect, it would register as a click to an external advertisers page.
I’d like to apply Hanlon’s razor, but it feels too coincidental that someone making money from this hasn’t fixed it.
But only if you have access to a free lawyer, because the most likely outcome is that they'll make the same claim they already made -- that the letter was meant to be sent to customers that had outstanding billing issues. And I don't think it's illegal for the company to promise debt forgiveness to customers that re-join.
He said letters like the one Schklair received are sent to numerous former customers who may have billing issues. The letters are intended to help indebted people find their way back into the financial light, he said.
> “You have worked hard to build a great future for yourself and your family,” it says. “We look forward to welcoming you back.”
I think I just threw up in my mouth. "Shame if something happened to that great future you built", indeed.