New Study Says Hidden Fees Can Raise Cable Bills By 45%

A new study by GlobalData found that advertised cable rates don’t reflect what customers actually pay — reportedly, bills can be up to 45 percent higher than the prices that are advertised.

This problem is an example of “drip pricing,” — a pricing scheme in which the full fee of a service or product is not revealed up front, in an attempt to make it seem less expensive, and entice customers into purchasing the product.

It may be an unfortunate common strategy in a number of industries, and TechDirt says that it has plagued the broadband and cable industry for more than 20 years.

In the cable industry, these hidden costs come in the form of fees tacked onto a base pay. Often, these fees may not be revealed to a customer until after they have signed up for a product, or are in the process of purchasing it. Many customers may not be able to accurately compare the price of different plans if they are only told part of the price up-front.

Fees that can unexpectedly raise the price of broadband or cable may include equipment costs, technology fees, or even “internet cost recovery fees,” says TechDirt. In some instances, customers may feel that these fees should be covered in the base rate.

Because of tacked on hidden fees and “drip pricing” models, many customers may feel that they have been misled about the price of cable and broadband services. Tech Dirt calls the tactic akin to false advertising, but says that lawmakers feel differently.

According to TechDirt, it is often not considered false advertising, and instead is usually considered in the realm of legal marketing tactics. TechDirt also points to the broadband industry’s “immense lobbying power” as part of the reason why lawmakers have not cracked down more on this tactic.

GlobalData’s report goes on to explain that some internet and cable providers may be charging more than others in hidden fees. GlobalData says that Verizon had the highest additional costs in August, charging customers around $24 a month in additional, hidden fees above their base rate.

GlobalData’s Senior Consumer Services Analyst Courtney Rudd explained that these hidden fees can cause customers to become dissatisfied, and in this dissatisfaction lies an opportunity for the industry. She says that companies can differentiate themselves from their competitors by being very transparent in their fees, attracting customers who have been burned in the past by hidden fees and drip pricing.

In her words, “Clear and concise online pricing can also go a long way toward easing potential customer frustrations with bill shock and the online shopping experience, especially when combined with contract buyout and/or cash-back incentives to remove potential roadblocks customers face when consideration a change of service providers.”

This takeaway provides a possible silver lining to what may seem like a dismal outlook for disgruntled customers shopping for internet and cable in an industry dominated by hidden fees, inaccurate price comparison, and seemingly little recourse.

Join a Free Hidden Fee Lawsuit Investigation

If you believe that you were charged unexpected hidden fees by a merchant or service provider, you may qualify to join this hidden charge class action lawsuit investigation.

Learn More

This article is not legal advice. It is presented
for informational purposes only.