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Modesto Bee
Oct 06, 2004



Jessica Morgan went bug-eyed when she opened a cell phone bill three years ago. It claimed the Modesto teenager racked up more than $200 in overtime charges, even though she rarely used the phone on weekdays.

"I was really upset, but I just paid the thing," recalled Morgan, now 19 and a cell phone sales agent in Modesto. "I figured, it's not really worth the hassle to complain."

Such apathy comes at a high price for consumers.

Billing errors -- from overcharges to double charges to failure to credit returned items -- cost consumers billions every year, said Harvey Rosenfield, president of the Santa Monica- based Foundation for Taxpayer & Consumer Rights. The mistakes pop up on any type of billing statement, including cell phone, utility, credit card and hospital bills.

"It's reached epidemic proportions," said Rosenfield. His group, he said, is conducting the first-ever comprehensive study of billing errors.

While the study isn't complete, Rosenfield said the anecdotal evidence he's seen suggests billing errors are more common than most consumers think.

Billing errors regularly grab headlines.

Last fall, American Express settled a case brought by the New York stateattorney general's office that claimed the credit card issuer failed to investigate and resolve $3.2 million in disputed charges over an 18-month period.

In March, AT&T admitted to unfairly adding a $7.50 charge to the bills of some 18,000 consumers in Tennessee.

And, in 2003, a Consumer Reports study found that 5 percent of 11,000 readers had major errors in medical bills. Those who paid $2,000 or more out of pocket were twice as likely to have found errors.

A big part of the problem, consumer experts say, is a lack of clarity.

Bills are becoming increasingly complicated. Some bills include dozens of taxes and fees, use obscure language or fail to itemize charges. In a sign of the times, businesses devoted solely to helping understand medical bills are opening around the country.

To avoid getting "nickel and dimed to death," consumers must be vigilant, Rosenfield said. They must keep complete records, including receipts, and not be afraid to challenge a bill.

People who pay bills online should keep close watch, too. Online payment options might save time, but they don't offer special safeguards that prevent billing errors. Consumers paying online might be less likely to scrutinize charges.

If a consumer suspects a billing error, the first step is to learn the company's procedure. Information about handling billing disputes, including a customer service phone number, should be located on the bill. Follow those instructions.

Many times, it will suggest calling the company. To dispute a credit card bill, consumers must mail the company a letter within 60 days of the bill detailing the problem.

When handling a dispute by phone, the key is finding a human.

Automated systems are clunky and frustrating for many consumers. Finding a real person will not only help get questions answered, but will get somebody invested in your plight.

Consumer groups recommend using a polite but firm tone. Take notes. And remember that you can always ask for a supervisor.

Often, one phone call is all it takes. Since most disputes involve relatively small sums, many companies decide it's not worth the time to fight them, according to Consumer Reports. Unsatisfied customers have a few options.

Some government agencies offer assistance. For example, PG&E bills advise consumers who dispute charges to contact the California Public Utilities Commission.

Disputes involving certain financial institutions, including most of the largest credit card issuers, can be referred to the Treasury Department's Office of the Comptroller of the Currency.

Any citizen in California can file a small claims case against a company. The lawsuits, which don't require a lawyer or technical knowledge of the law, can be filed for as much as $5,000.

And, of course, there's always the option of simply giving up.

Esther Ruggirello recalls taking that route a few years back, and regrets it. The Modesto woman felt she was unfairly billed for an emergency room stay that added hundreds to an already-expensive hospital bill. Daunted by the bureaucracy she thought she might encounter, Ruggirello paid in full.

"Now that I'm older and wiser, I probably would've put up a stink," said Ruggirello, 80. "It was a lot of money."

As for Morgan, she said she's grown more consumer-savvy since moving out of her parents' house. She said she has a better appreciation for money and doesn't hesitate to challenge a bill.

She even disputes charges on her mother's behalf. Morgan recalled one of her mother's recent cell phone bills that included charges for features already paid for, such as calls from one cell phone to another.

Finding the representative unhelpful, Morgan upped the ante.

"I asked him, 'Do you know this contract is about to run out?'" said Morgan, implying her mother would consider taking her business elsewhere.

After that, the service agent became more sympathetic, Morgan said, and canceled most of the charges, which totaled $400 on a bill that's usually $83 a month.

Morgan said consumers should always ask questions about their bills if they suspect something is wrong. They might not always get their money back, she said. But "it can't hurt to try."

-------------------- CHECK THOSE CHARGES --------------------

Don't just glance at that total on your bill and mail in a check, consumer groups advise. There could be charges listed that you shouldn't have to pay. Below is a description of the most common billing problems:

* OVERCHARGES -- Some bills contain inflated charges. Many consumers forget to look at the amount in question, particularly on bills containing many charges. Compare the charge with any receipts you received at the time of purchase.

* PHONY CHARGES -- Some bills contain imaginary or "phantom" charges for items never ordered by the consumer. And some companies send out materials which look and read like bills, but are only solicitations. Don't be fooled by letters asking you to pay for items you haven't ordered yet, or suggesting that your "account will lapse" if you don't pay right away.

* BILL PROCESSING CHARGES -- The latest wrinkle in the arena of billing abuse, a "processing charge" is appearing on computerized bills with increasing frequency. Processing charges are nothing more than an effort to bill you for the cost of billing you -- a cost which used to be calculated into the price of a product or service.

* UNITEMIZED AND INDECIPHERABLE BILLS -- Some bills are nearly impossible to understand, making it difficult to determine the accuracy of the charges. Some bills don't list specific purchases and, instead, lump all of them together in a final total. Others contain undefined terms, and bureaucratic language, which makes it difficult to determine whether the charge was calculated correctly.

Source: Foundation for Consumer & Taxpayer Rights
Bee staff writer Todd Milbourn can be reached at 578-2339 or

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