The oldest son was settling the estate of his recently deceased mother when he stumbled across the fact she’d been renting her AT&T home phone, decades after Ma Bell had been busted up. He totaled the bill, and realized she’d paid more than a thousand dollars for a device she could have picked up at Target for $10. He was infuriated — and rightly so.
Turns out, the old AT&T (not today’s cellular giant) gave customers an option of buying or renting their phones back in 1984. Most people opted to buy, but a good number continued to rent. Why? Old habits die hard. It wasn’t a big deal at first… mainly because the first generation of buyable phones weren’t that good. But as months turned in to years and years in to decades, the rentals became a ridiculous cash cow for the phone companies. AT&T declined to reveal how much it was earning but acknowledged it was a big money maker.
By 1995, it became an embarrassing situation. Investigative reporters like me were suddenly discovering that senior citizens across the nation were paying $6.95 per month — primarily because they didn’t understand what had happened and what was continuing to happen. The American Association of Retired Persons called the situation “disgraceful.” Ultimately, the phone company agreed to refund a good percentage of the rental fee charged to the elderly lady who was the subject of my story.
A similar pattern repeated when the Georgia Legislature deregulated natural gas in 1998. Georgians were so accustomed to paying Atlanta Gas Light Co. every month that by the time everyone was supposed to have chosen their own marketer/provider, a full third of Georgia’s gas customers simply hadn’t done it. Why? Old habits die hard.
The Public Service Commission determined that the “undeclared” customers would be assigned to a marketer, based on the pattern and percentages of customers who had chosen a marketer. It’s no surprise the company that had spent the most on advertising was awarded the largest share of those unsigned customers, and those customers wound up paying a lot more than they would have, had they been proactive and chosen the least expensive provider.
I’m amazed to find that many of those customers are still with that much more expensive provider and paying hundreds more than they should, simply because they won’t “Google” the Georgia Public Service Commission website, www.psc.state.ga.us/gas/pricecard.asp (or visit www.TrustDale.com for that matter) and act on the evidence that Coweta-Fayette Natural Gas is almost always the low-cost leader for natural gas — and has been for years.
Now for some personal disclosure: A good friend of mine (and a well-known consumer adviser who shares the same first name as Superman) advised me years ago to switch my home phone service to a little three-ounce device called a magicJack. You plug it in to your computer’s USB port, and within minutes you can start making unlimited local and long distance calls, for free! The catch? The magicJack costs $40 to buy, and another $20 per year to renew, so you end up paying about $3 per month.
It took me four years to finally fire my home phone company, which I was paying $23 per month, and plug in the magicJack. Why did it take me so long to start saving so much? Old habits die hard — even for your consumer investigator Dale Cardwell.For great consumer advice and companies you can trust, visit www.TrustDale.com, watch Dale on TrustDale TV weekends on Fox 5, and listen to TrustDale Radio Saturday afternoons on Newstalk WSB.