Electronics

Updated every Monday!   Subscribe to free weekly newsletter.

Comcast’s 2-Year “Guaranteed Rate” Increases

There is a change in the way “triple plays” for TV, Internet, and phone service are being marketed by major cable companies. Advertised promotions used to be limited to six months or a year at the most. Now many of them are for two years. This can be good or bad, depending on the details (which of course are not always immediately obvious).

Comcast/Xfinity is currently running a TV commercial touting a “guaranteed rate” (in large type) of $99 a month. The announcer even says:

“We’ll guarantee your rate for two years.”

One might come away with the impression that the $99 rate is guaranteed for two years, but that is not so.

*MOUSE PRINT:

In surprisingly large type, but much smaller than the $99 rate, Comcast discloses that the rate  jumps up $16 a month in the second year. Does that disclosure really overcome the other representations in the ad about the $99 price and the oral promise guaranteeing the rate — not “rates” — for two years?

It is unclear whether one would be allowed to cancel the deal after the first year, or if the customer is bound to a two year contract (and possible early termination fees).

Updated every Monday!   Subscribe to free weekly newsletter.

The Catch in Verizon’s $84.99 Triple Play Deal

Verizon FiOS has been advertising a great package price online for Internet, telephone, and FiOS TV — just $84.99 a month for a year. That is less than most competitors, and many consumers rave about FiOS.

Here is their online animated ad (for which you need Adobe Flash player to view). Click the replay button if the animation has ended.

Did you catch that pop-up disclaimer at the end that was on the screen for less than two seconds? (You can hover over the “legal” button with your mouse to freeze it in place — something we guess most consumers probably wouldn’t know to do.)

*MOUSE PRINT:

$109.99/month for months 13-24, two-yr agrmt req’d plus taxes and fees.

We would venture to say that most consumers didn’t catch the fact that you must sign a two year contract to get this deal, and that the bargain $84.99 price only lasts for the first year. The price then jumps up $25 a month to regular price (apparently) for the second year.

Imagine the customers’ shock when they open their Verizon bill in month 13! And, if they want to cancel at that point, they are in for a second expensive surprise. Also not disclosed in the ad is Verizon’s new $360 early termination penalty (which is evenly pro-rated over the life of the contract).

Mouse Print* invited Verizon to comment on this story, but as of publication time, they had not yet done so. This post will be updated should they respond this week.

As we have repeatedly said, companies need to be more upfront about their pricing in their advertising, so their customers are not hit with unexpected charges.

IMPORTANT DISCLOSURE: The editor of Mouse Print* is a compensated member of Verizon’s Consumer Advisory Board, which advises the company on policy and public issues.

Updated every Monday!   Subscribe to free weekly newsletter.

Google’s Cell Phone: Double Early Termination Fees

You’ve heard of double coupons, right. And that’s a good thing. But you probably never heard of double terminations fees. And that’s a bad thing.

Google just introduced its first cell phone, the Nexus One. They sell for a lot of money: $529 if you just want to buy the phone, but only $179 if you buy it as part of a package deal with two years of service from T-Mobile.

If you cancel early, you would expect to pay an early termination fee to T-Mobile:

*MOUSE PRINT:

So, you would owe $200 to T-Mobile if you cancel within the first year and a half of your contract. What you might not expect is to pay a second early termination fee, this time to Google.

*MOUSE PRINT:

If you cancel your service within the first 120 days, you will owe Google an “equipment recovery fee.” That’s the difference between what you paid for the phone ($179) and the full retail price ($529). In other words, $350.

So let’s do the math. You pay $179 for the phone upfront. If you cancel, you pay T-Mobile $200 and Google $350. That totals $729 for a phone that would have cost you at most only $529. Seems like someone is profiting from your early cancellation.

And to add insult to injury, should you want to avail yourself of Google’s 14 day trial period where no early termination fees apply, you will have to pay a restocking fee of $45.