New research by UK consumer watchdog and adviser Which? reveals just how hard it is to calculate unauthorized bank charges under the current charging structures of the main banks.
Which? experts have discovered that people using unauthorized overdrafts would find it virtually impossible to calculate how much their bank would charge them, or to compare charges between banks as the fee structures are so complicated.
Which? asked a group of its members to work out the cost of an unauthorized overdraft for four different banks by giving them a mock bank statement. Despite one of the volunteers being a math Ph.D. student, not one got all the calculations right, only managing to get 7 out of 48 correct answers among them.
One volunteer commented: 'Details on rates and charges should be accessible, be in plain English and in a standard format, so that banks can be easily compared. At the moment you need to be both a detective and have a Ph.D. in math to work out what you may owe'.
So, what does this have to do with the telco industry? Well, nothing on the face of it, but if Which? was to apply the same criteria to an investigation of our tariffs and bundles, they might well discover that a math professor would be baffled at the complexity we have managed to achieve.
Despite countless surveys and analysis of consumer wants, we continue to produce some rather baffling plans camouflaged as being tailored to specific market sectors, e.g. the student plan, the housewife plan, the heavy data user plan, etc. Digging through the marketing bunkum reveals some incredibly complex rating calculations that ensure that even if part of the tariff favors the people it is designed for, the benefits can soon be dissolved by higher charges for other services they may end up using, intentionally or otherwise.
Capped plans that limit exposure to over-usage are often rated at higher per second or per minute call rates. Exceeding data thresholds often sees the rate per megabyte rocketing skyward. We can thank the early pioneers of telco billing for the state of affairs now, but what happens if we, as an industry, are called to task and forced to explain each and every rating plan in the catalogue to wary consumers led by organizations such as Which?
Telecommunications has been remarkably lucky at getting away with it for years. When fixed line telephony was new and still a novelty, reserved mainly for the well-to-do, we charged a monthly subscription fee and so much per minute for calls being made and, in some countries, for those received. As the networks expanded we cleverly added ‘distance’ surcharges. Then came variations for ‘time of day’ charging, call set up fees, premium numbers, and so on.
With the advent of pre-paid services for mobile users we excelled in offering relatively simple tariffs, limited by early technology, but then introduced the concept that if credit balances were not used in a certain time the monies would be forfeited in favor of the operator. Even more amazing, the more you paid the longer the balance would remain available.
Wowie-zowie, wouldn’t banks love to have that power! How would you like it didn’t use your deposited funds for something worthwhile in a period of time the banks got to keep the money?
How do we do it, and why haven’t consumer watchdogs and regulators jumped all over us? One can only suspect it will happen eventually. In the meantime, it could be advisable to take heed of what consumers are asking in terms of transparency and simplicity. In today’s social networking era, they themselves may become the ‘regulators’ using the power of mass communication, that we are supplying them with, to rally their masses against us. It’s not the OTT players we should be watching out for - it may be our own customers.
Posted
01-17-2012 6:18 AM
by
The Insider