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Is This a Shady Pricing Trick By Cox?

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A couple of weeks ago, I received the following letter from Cox Communications, my cable service provider:

Cox Returned Payment $25 Fee

(Click the image for a larger version.)

I believe it is best to automate your money so that you can avoid late fees, cancellation of service, and well, "work." This letter from Cox tells me that they tried to charge my account, as they had done successfully for years, but it failed.

Why?

Fidelity switched credit card providers and moved from American Express to Visa. I called them out on this on Twitter:

Fidelity, to their credit, responded with:

I respectfully showed that I didn't have questions, but was simply offering them feedback on how to the fix the situation. Credit cards should be about convenience, not making customers do more work, right?

Fidelity seemed to appreciate this feedback and apologized for the inconvenience:

Fidelity, meet Cox. Cox, meet Fidelity. I had hoped the two of you knew each other, but I guess you need blogger to bridge the communication gap. I think you two should have worked this out before consumers like me got $25 fees for doing nothing.

In fairness, I should have probably gone through all my Fidelity charges over the last couple of months and switch them all over. However, the worst thing that can happen with a declined credit card is a notice about potential cancellation of service and and request to try a new payment method, right? It seems that Cox doesn't agree.

I called up Cox Communications... which was actually no small feat. I searched Google and it came up with regional number in Atlanta and local solution stores. Maybe the solution stores could have helped, but I figured they don't make billing decisions for Cox. I settled on the default number that Google gave me, which brought me to Cox's phone tree. After navigating it to try to solve my billing problem, they asked me to hang-up can call a new number which they provided. Fortunately, I had a pen and paper handy, but why didn't Cox simply transfer my call to the appropriate number?

(Yes, using Google's default information is on me, but I was on my cell phone, which makes it difficult to sign into my Cox account as I don't have my username and password ready. However, maybe Cox could contact Google and have them fix the information? I can't be the only person having this problem.)

Once I got through to Cox's national department, I explained the issue of Fidelity's credit card change to the first person. She wasn't authorized to help me, so she kicked it up to the manager.

My explanation to the manager, Trudy, went something like this:

"If I walked into McDonalds and ordered a burger for a buck or two and swiped a card that was declined, would they say my burger is now $26 or $27? Of course they wouldn't. I had received other declined notices for this same card, such as Netflix's 'Houston, we have a problem' famous email. Not a single company added a credit card declined fee to bill, and certainly not something like $25."

Fortunately, Trudy understood what I was talking about. After explaining that the modern world has these issues when we let computers do their things, she was happy to waive the fee.

I didn't want to press my good luck. However, as a software engineer who has created a billing system in the past, I knew that a decline code does not incur a significant cost to the biller. In fact, if my memory serves, there is no cost. I don't think it is a "modern world thing", but a "Cox Communications thing."

Hopefully, someone at Cox reads this and can provide a better answer to this fee. I wonder how many consumers simply just pay the fee and move on with their lives. (Cox, if you are reading this, I am sorry that don't have the time to navigate your customer support system to attempt to reach the department head who I presume came up with this policy. However, you can leave a comment below with a way to get back to you directly and I'll be happy to contact you that way. You can also email me here. And while I'm sending this out to your Twitter in promoting it via social media, this conversation is probably more than 140 characters long.)

So I didn't get scammed by this fee, but only because I used 30 minutes of my time to get it waived. I presume that Cox Communications has at least a million customers, and I feel like some significant percentage have had their credit card declined at some point. I don't think these fees are trivial. I wouldn't be surprised if there was a class action lawsuit in the future over this.

That OTHER thing in the letter

You may have noticed that the letter says my bill will be $238.11 after the $25 credit card decline fee. Now that I have had that fee waived, my bill is $213.11.

Whoa!

That's a lot more money than I expected... a lot more. Shame on me for not looking at my cable bill each month. It's not a great defense, but I generally expect my cable TV/Internet bill to be the same every month. My other utility bills don't vary greatly, except for when I use more resources (which is to be expected).

So I looked at my bill... and I was floored with more surprises.

Let's flash back to last year when I wrote about Cox's pricing being "banana pants". Back then I wrote:

When I signed on with Cox two years ago after a move, it was explained that I'd actually save money by taking their telephone service. The price of the bundle deal with the telephone was cheaper than to buy their two most popular products, television and internet, together.

The telephone component has sat in the box in my basement for two years. I have Ooma's "free" service (just pay about $3 in taxes) which I love.

In reviewing my bill, I noticed something new. Getting the phone triggers $19 in taxes.

...

I countered by explaining that it makes no sense for them make me take a product (the telephone service) that I don't want and pay extra money in taxes - money that doesn't go to Cox - just to get better pricing on the two services that I do want.

So in looking at my bill, the telephone service (that I never, ever wanted) is costing me $25 a month. My bundle deal expired, so getting the phone no longer saves me money. It feels like a Trojan Horse designed to sneak money out of my wallet. Now, I understand why they made me take phone service to get the temporary cheaper price.

It's shocking to me to read my article from last year where I say my bill was $126... and then see it at $213 this year. That's an increase of more than a thousand dollars a year!

So yesterday, I called up Cox to see what I can do about this. (And again I did the aforementioned dance to actually find their real number.) After explaining to the first person that I'm paying for phone service that I never wanted, I got passed to the second person. I explained it all again. I got put on hold... and then they came back with a new price of $145 with some new bundle deal. It took around 30 minutes, which isn't bad to save $70 a month. She was able to backdate it a month and give me a $98 credit, which takes care of the $25 I was spending on the phone service without realizing it.

*Break* - While writing this article, I actually got an automated call from Cox Communications telling me that I should sign into my account or call an agent back at some other number. The message wasn't clear about what I should do. I wonder if they've failed to re-run the new credit card that I entered the other day and believe my account to overdue. It's strange, because they could have given me that information a few hours ago, when I called them to get my bill lowered. Also, it is strange to have a robot call you only to tell you to call another number. It's almost like they are trying to be as inefficient as possible.

The only catch with the new pricing is that it again is a bundle rate that will expire in a year. She told me that I should mark my calendar for next year, which is sound advice. I did that right away.

I've been on the fence about cancelling cable service for some time. I rarely watch any cable channels except for the Red Sox, which I can get through MLB.tv for a low yearly rate. Even with the new bundle price, it's a lot of money to DVR network shows. There are other services like TabloTV that I can, and probably should look into.

I'd explore going with another company, but I mentioned in that article last year, there's no other broadband option in my market. I can't call up Comcast or Verizon FIOS and switch.

So, I ask the readers... are these billing practices fair or misleading/deceptive? I'm leaning towards the later, which is also why I included the FTC's Twitter handle on this. I'd love to get their opinion on the matter, because I think these things are costing consumers millions and millions of dollars.

Note: The use of the word "scam" in this article is a question and not a statement of fact. This article is my opinion. You may have a different opinion. In fact, I don't believe my reader-base can agree what is a scam anyway. As always, do your own research and come to your own conclusions.

Last updated on September 8, 2016.

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8 Responses to “Is This a Shady Pricing Trick By Cox?”

  1. Terri says:

    I also have Cox for my TV, internet & phone services. I too got talked into adding the phone/long distance into my bundle to save money. In one year my bill has gone from $145 to $194-$205. They’ve now required us to order mini-boxes for any TV’s that are plugged directly into an outlet because they’re going digital. That will add $2.99 per box, per month to the bill. I will be stopping by the local Cox store, which is walking distance from my house, to try to renegotiate my bill again. They’ve gotten completely out of line with their pricing, especially when it comes to their phone service.

  2. Wesley says:

    What a giant hassle. I keep a file of all the “auto charges” I have(I know, should be able to keep this in my head), so when something happens I know who all the change.

    Cox sounds like TW in their charging. I get the yearly surprise, I call, remind them I’m a loyal paying customer, and magically another year bundle is found.

  3. Big-D says:

    While looking up the definition of scam, I found a common theme, fraud. Fraud indicates that the act is illegal. So I would not say it is a scam, but I would say it is shady. I hate playing that game as I just had the same phone call on Friday with my cable company. I have Internet only at my house, and it went from $50 a month to $90, for the same internet connection. I own my modem so there is nothing else I am paying for. I got them to give me a special for $52 a month. I asked why do I have to call in once a year to get a “promotion” and basically they said that since people won’t do it, they make money hands over fists so why change it.

    I agree that the federal government needs to step in. FTC, FCC, etc. I don’t care. It is stupid that we have to play games which something in so many other countries are considered human rights (like health care and social security). We in this country have to play Russian Roulette with our core utilities to see how our monthly bill will look.

  4. Geoff says:

    Hey LM,

    Excellent article, and I can wholeheartedly relate to the frustrations with Cox and with the entire Cable industry. I have had to go through far too many hurdles with both Cox and AT&T, and have learned that these companies have created closed markets and might as well be monopolies in their given territories.

    When I first moved into my current place, we had AT&T for internet only and the internet was garbage. We didn’t use the internet for much, but as long as someone was on a computer and we used Netflix at the same time, then the internet would crash or be so slow it was unusable. I called into their support center at least 10 times to deal with this, and I was visited at least 3 times by technicians. Not only were we paying a grossly large amount of money per month (I believe it was close to $80), but the service was total crap. For the record, I had AT&T at my previous residence and loved it. I never had any issues before, and could not understand what was happening.

    The first technician came out with his computer to test our box, and found it had a series of errors. He sent us a new one, and told me to go to UPS to send back the old one. I received the new box, hooked it up, and had the same issues again. Luckily, I got the technician’s number and got him to come back over to check out the issues. He went downstairs to our main internet area, and said everything was fine…

    A few more days of this nonsense went by, and I finally got a different technician to come out. This guy was hilariously honest, but the visit did make me extremely mad with AT&T. Not only did the other technician get the diagnosis wrong, but they charged me $75.00 for the second technician to come out…ARE YOU KIDDING ME!??! Anyways, the second technician told me that we were 1,000 feet out of range of the tower, and were lucky to have any internet at all…HOLY COW!!! I was paying for premium service and was receiving about 3 megabytes worth of DSL, and he compared it to one step above dial-up (Netflix takes at least 3 megs to run efficiently, but it can be more)! Needless to say I immediately cancelled afterward since we had been switched to a month to month plan and had some very choice words for whomever was on the other end of my phone call.

    This is why I believe it is monopolized…The only company that is “functional” in my area is Cox. There is no reason for this to be the case other than the way they have our cities segmented out. AT&T worked great in a city less than 10 miles north, but it was completely unusable at my new place. This isn’t uncommon for people to only have one choice for service either (as you mentioned in your article). Most people only get one choice, and they get stuck with whatever rates are available (that sounds criminal).

    My view of Cox…they are criminals, but I’m stuck with them because they are the only service in my area. My package is around $126.00 a month and it is only for internet and one step above basic cable. They charge $25 for those stupid religious and foreign channels, and I don’t get a choice to not receive them because I can’t “upgrade” the cable without those channels being in the package. Then they charge a rental fee for EACH cable box of $8.00 a month. AT&T never had charges like that and only requested you send the boxes back when you are done with them through UPS and didn’t charge for postage. Cox has a separate charge for DVR and the ability to fast forward and rewind…W T F. The boxes have the capability, but they can actually prevent you from using it, if you don’t pay them more money…totally absurd. Of course they also charge you to rent the internet modem around $6.00 a month. Not only is Cox the most expensive service I have had, but it is also the most limited (they didn’t even offer me access to premium channels for free for the first month). The greed is ridiculous, but I’m stuck unless I want to be back in the stone age…and believe me I have thought long and hard about doing it.

    I don’t understand how they continue to legally operate like this. They are clearly working together to own specific areas of the country and capitalize on not having direct competition. This is not free market capitalism.

  5. Lazy Man says:

    Such great feedback everyone! Cox reached out to me on Twitter and passed my article to leadership. I’m not optimistic that my article will change how they do business.

    Wesley had a great point that I probably should have touched on. I don’t think Cox is alone with the yearly “bundle dance.” Maybe I should have singled them out, but it’s my own personal experience, so I can’t really speak about the other companies.

    Terri, I pay that $3 charge for the new box too. It would be nice if there’s a way to buy it like a cable modem, but that’s not an option. It’s not like the $3 is much, but it is $36 a year or $360 over ten years… just to use the service that I already pay for.

    Big-D, I agree that Cox doesn’t appear to doing anything illegal. At the same time, I like how you put it that the FTC, FCC, or someone should step in.

  6. Vogel says:

    What bothers me most about Cox, aside from the outrageously high price I pay for my phone/cable/internet bundle is the frustratingly primitive technology of my Cox DVR box. It seems as though they intentionally designed the interface so that it would me make users want to hurl the box into a wood chipper. The dumb-box is about 10 times the size of my Apple TV and iPad but operates on a platform that seems about as high tech as Windows 3.0. I wish so bad that it was Apple that ran the show instead of Cox.

    I always wonder why Cox’s technology is so horrid. Is it some arcane technical issue like the limitations of retrofitting to outdated hardware, or is it that they just hire the absolute worst designers and engineers money can buy.

    I cream about freeing myself of Cox. Pretty much the only time I use my landline is when I have to answer annoying telemarketer calls or when I misplace my iPhone and have to dial it up to locate it. I watch maybe 10 TV channels tops out of the package of garbage they offer, and I killed my HBO subscription a while ago, even though I liked it. An unbundled pick-and-choose package would be infinitely more to my liking.

    It’s the monopoly that allows Cox to get away this, and it’s hard to fathom why regulators haven’t stepped in to fix things.

    My dream scenario is a government subsidized free access nationwide broadband and wireless network, which exists to varying degrees in several countries in Europe. Internet access is essential to ensuring an even playing field for everyone and it should be regarded in the same way as access to roads, libraries, public education, etc. As I understand, it has been proposed here in the US but the telcos and providers lobbied to make sure it didn’t happen.

  7. Lazy Man says:

    Fortunately, I don’t have to deal with Cox’ DVR box. I built my own via a Windows 7 computer, HDHomeRun Prime, and a cable card. I’m very happy with it, and it’s amazing to think that it is 5 year old technology.

    I don’t think Cox has incentive to update the hardware. When I looked cable boxes before, I was surprised to learn that they use more electricity than most of the appliances in a typical house. Nowadays, smart phones can do the job of recording and playing back video, which is essentially what a DVR is.

    I have a conspiracy theory that the telcos have worked with Microsoft to get them to remove Windows Media Center from Windows (as they have with Windows 10), because they don’t want consumers replacing their DVR (and the juicy monthly rental fees) with a one-time $100 tablet. Is it crazy? Perhaps. I can’t think of another reason why Microsoft would drop WMC instead of giving people a good alternative to something that seems to be a pain-point for many consumers.

  8. Kristina says:

    I have Comcast and I despise the bundle promotion deals. No other company makes me call every year to try and wrangle a new deal. It is complete BS. My cell phone, water, trash, & electric all stay roughly the same with the variances due directly to usage, but boy, when the Comcast promo ends watch your bill double. Then you have to call the awful phone tree and deal with their terrible customer service. We finally got a competitor in our area, but they are even more expensive than Comcast. :(

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