Lazy Man and Money

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.

Rants: Coverdells, Paper, Faxes, USAA, Fidelity, and TD Ameritrade

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Ever have one of those tasks that seems like it should be simple and then turns into a mess that eats up hours and days of your time? For the last month, I’ve been trying to do something really simple…

… open a Coverdell account for my oldest son.

Opening one for my youngest son took my wife under an hour with USAA. They have exactly the same circumstances, just different names and Social Security numbers. So you’d think you could simply say, “Open one for the oldest son too.”

For some unknown reason USAA’s system got stuck in the application process. We reached a screen where we supposed to have a drop-down of the oldest’s and the youngest’s name. However, it displayed a blank entry and the youngest’s name. After hours and three calls into USAA, they admitted there was a problem, but they weren’t able to fix it. We could probably have spent many more hours and many more calls getting it fixed, but it seemed easier to just move to a different bank. After all we were able to get the youngest set up in an hour with USAA… another bank should be as efficient.

My wife next went to a local Navy Federal which can set them up. Unfortunately the Coverdell person only works one day a week and we were busy that day. We didn’t want to lose another week as we have to get the account set up before tax day to make the contributions for the 2015 tax year.

I told my wife that I’d take the task over. (In hindsight, it might not have been my best idea.)

My first thought was to go to Fidelity. I already have a Solo 401k with them and as one of the biggest banks, they seemed like the best bet. A Coverdell isn’t very common nowadays. In most cases, a 529 plan is a better option. Well, it seems that Fidelity believes that Coverdells are completely useless, because they no longer offer them.

Fortunately, as a personal finance blogger, I know what sites I can trust and Jonathan from My Money Blog has a list of best brokers for Coverdells. I noticed TD Ameritrade on the list. Since I have a Roth IRA with them dating back to 2002 when they bought Datek, I figured I’d give them a shot.

I went to the website and followed all the prompts to open a new Coverdell. I was expecting it to work like USAA where I’d open it all online, especially since I’m an existing customer. Unfortunately, TD Ameritrade seems to work by creating a PDF form that you have send to them. While they claimed that they could pre-fill my application from my existing information, they could only produce a blank PDF application.

I spent an hour filling out the application. It’s a typical application except for the page on trading options. Trading options in a Coverdell seems weird to me. The contributions are limited to $2000 a year and the purpose, to fund an education, does seem to lend itself to making such speculative investments. It really doesn’t seem like it should be a significant portion of the application, but it was. I think they should assume that people don’t want to trade options unless they specifically choose to fill out additional paperwork and send that in.

I printed out the application, wrote a check (with an additional contribution form), and put it in something called an envelope with “postage” for it to be delivered very slowly to TD Ameritrade for their review.

I was happy to finally cross it off my list because I was going on vacation (which is why you didn’t too many posts from me last week).

Halfway through the vacation I got notice from TD Ameritrade that it wasn’t able to open the account due to a missing signature. I think I signed everything, but there’s a chance that I only signed the options agreement and not the main application. That’s my fault, but honestly I’m surprised that’s the only error they found as it was an extensive application with no error checking that you’d get if they simply did it online like USAA.

While on vacation, I didn’t have easy access to printing documents like I do at home. I was away from the hotel for about 16 hours of the day which would have been a natural solution (albeit at a likely high expense).

I tried to convince TD Ameritrade to process it since they at least had my signature in one place, but they wouldn’t budge. You’d think that in 2016, we’d have a digital signature solution that very big financial companies could use… especially if you already have an account with that very big financial company.

I decided to wait until I got back from vacation. Today is the first business day since I’ve been back, so it was time to pick it up and give it another shot.

Fortunately, I had saved the PDF with all the information, so it was just a matter of printing it, signing it, and faxing it. Mailing isn’t really an option, because we’re now down to one week until the tax day deadline. I’ve never been able to get faxing to work with our VOIP phone. I decided it would be easiest to go to the local Kinko’s FedEx Office and use their fax. TD Ameritrade’s fax is toll-free so it doesn’t cost anything other than overhead for FedEx to send it. They really don’t need an employee since I’d be doing the faxing myself.

Unfortunately the cost was about $1.50 a page. I’m sure some people would have paid the $12 just to the end this headache, but I couldn’t support that pricing on principle. One page was just fine print and I would have been tempted to save the $1.50 to leave it off, but I couldn’t risk wasting $10.50 for an incomplete application only to have TD Amertitrade tell me that I need to fax the complete thing again.

I left and went home to look for other options. I was able to scan the signed as a PDF and use a free service from MyFax.com to send it. They needed my email address which probably means that I’ll be spammed forever (I used my junk email account), but it got the job done…

… or at least I think it did. We’ll see if TD Ameritrade will finally open the account and deposit the check that I sent now nearly two weeks ago.

Why a Coverdell?

Some of you might be asking why I would open a Coverdell in the first place. Coverdells can be used for a wider variety of educational expenses such as computers. Also, they can be used for private high school where 529s can not. Who knows if that’s in the cards for our kids… they are only 2 and 3 years old. However, it seems like smart idea to have the option. We can always use it for college if that doesn’t pan out.

If you are still reading this rant, you are some kind of saint. I usually don’t like to complain, but I had to get this out of my system. I’m allowed a few financial rants a year, right?

I’ll write about Coverdells more in the future. If this had gone smoothly, I would have been writing about them today.