Updated every Monday!   Subscribe to free weekly newsletter.

June 5, 2017

It Looks Like Junk Mail, But Ignoring It Could be Costly

Filed under: Uncategorized — Edgar (aka MrConsumer) @ 6:20 am

[Note: Although this story is about certain Massachusetts towns, the same thing is likely happening around the country.]

Last week, tens of thousands of Massachusetts residents in a couple of cities and towns found letters like this in their mailbox:

Somerville envelope

With a little prior knowledge of what sales pitches from alternative electricity suppliers look like, this appears to be just another one of those letters promising savings if you choose them instead of your regular electric company. Even though it has the name of the city (Somerville) in the return address window, it lists an energy company name (Dynegy) and an address in Illinois, not Massachusetts. So many people might simply toss the letter out as junk mail.

A similar letter from the same company also went out to residents of Brookline, Massachusetts last week. Here is the front page of it:

Brookline electricity letterClick letter to see full size.

Surprisingly, the letter really was sent on behalf of the town. It suggests that the town has bulk buying power when purchasing electricity for thousands of residents and businesses and thus has negotiated a plan “to provide you with competitive choice, longer-term price stability and more renewable energy.”

Good news, right. Not so fast. There are three big catches.

*MOUSE PRINT:

“There is no guarantee of future savings. The primary intent of the program is to provide price stability and savings over the duration [a 30 month fixed price contract] shown above. … Rates may drop below the program rate during any given six-month and three month period.”

So, first strike: no savings are guaranteed.

*MOUSE PRINT:

The details get worse. At the bottom of the page is the first unambiguous statement of what is really going on here.

“As an eligible participant, your account will be automatically enrolled in the program unless you choose to opt out.”

What, you are deciding for me what electric company is going to supply my power? Yep. Every resident and business in town will be automatically switched away from their current electricity supplier, Eversource.

Since when is a negative option plan legal that lets a seller impose its services on you unless you take action to stop it? If this were legal in other commercial contexts, we’d all be getting letters from swimming pool installers saying that next Tuesday a new pool is going to be installed in our backyards unless you call to stop it. Unbelievably, the Commonwealth of Massachusetts passed a law some 20 years ago allowing cities to set up “municipal aggregation plans” like this, and foist it onto their citizenry automatically as long as they allowed people to opt-out. How anti-consumer! These aggregation plans are not limited to Massachusetts, incidentally. Some states have had them for five or more years already and take a similar approach.

We’re not done yet with this bad deal.

*MOUSE PRINT:

rate chart

To add insult to injury, the rate per kilowatt hour that everyone in Brookline is involuntarily being placed into is about 5% higher than the rate currently being charged by the regular electric company.

Dynegy charges $0.11098/kWh, while Eversource’s rate is only $0.10759/kWh. So much for the savings in the short term because the town was buying electricity in bulk. It should be noted that should everyone’s current electricity supplier go up in price during the next 30 months, people on the new plan may indeed save some modest amount of money.

The only way a Brookline consumer can get a lower rate than their current electricity supplier through Dynegy is to affirmatively opt-in to its basic plan rather than the default plan that the town chose for everyone. In that case, people will save just over one-third of one cent per kilowatt hour of power used. Woohoo!

Of course, saving money is not the only reason that cities adopt these aggregation plans. The hope is to force its citizenry into an electric plan that gets a good portion of its power from renewable energy sources like wind or solar power. In the case of Brookline, the default plan gets an additional 25% of its power from renewable sources.

On balance, we think that consumers should be offered these greener electricity plans, but they should be sold based on their merits and residents should not be forced into them involuntarily (even if there is a no-penalty way to opt-out).




  ADV


• • •

May 29, 2017

Payless Car Rental’s Shady Practices Get National Spotlight

Filed under: Travel,Uncategorized — Edgar (aka MrConsumer) @ 6:21 am

Last year, Mouse Print* brought you a story from Consumer World reader Marcie S. alleging that Payless Car Rental engaged in various shady practices that often left customers with much higher bills than they bargained for.

Complainants said they reserved a car at one price, but were charged more at the counter. Others said they declined optional charges like roadside assistance, gas refills, and additional insurance, but were charged for them anyway.

We tipped off our friends at Good Morning America about the issues and they took on the case. ABC News went undercover, hidden cameras and all, and discovered similar things happened to them too. Their story aired last week.



After receiving more than 800 complaints, the Better Business Bureau has now issued a national warning about Payless and given the company an “F” rating. (Text version of ABC story and BBB warning is here.)

The class action lawsuits filed last fall against Payless continue. The question remains, however, what are our state attorneys general and the Federal Trade Commission doing about Payless?




  ADV


• • •

September 5, 2016

“This is Not a Bill”

Filed under: Business,Uncategorized — Edgar (aka MrConsumer) @ 6:03 am

Most people have no idea when their newspaper or magazine subscription is set to run out. So when you get a bill in the mail like this, it must be time to renew, right?

People around the country have been receiving bills like this:

Invoice frontClick to enlarge

Not so fast. The back of the invoice says the following.

*MOUSE PRINT:

“This is a magazine subscription offer, not a bill or invoice. You are under no obligation to either buy a magazine or renew at this time.”

And despite the appearance of this “bill,” the front bottom left hand corner says in small letters “RENEWAL OFFER – NOT A BILL.”

If it looks like a duck, it’s a duck, no matter what the fine print says. That’s the opinion of the Federal Trade Commission which recently filed a lawsuit against a web of companies for sending out these notices to subscribers of newspapers such as The New York Times, The Wall Street Journal, The Seattle Times, The Denver Post, and over 350 others.

The notices claim that that the price is one of the lowest available rates and is authorized by the publisher. In fact, the FTC alleges the defendants do not have the publishers’ authorization and they charge up to 40 percent more than the newspapers typically charge. Purchasers often overpaid, got the wrong publication, and had difficulty getting refunds.

We say: go get’m!




  ADV


• • •

June 27, 2016

Ticketmaster Settlement Fine Print Trips Up Many

Filed under: Business,Uncategorized — Edgar (aka MrConsumer) @ 6:06 am

TicketmasterLast week, Ticketmaster began issuing $386 million in vouchers to some 50 million previous ticket buyers as part of a class action settlement. The company had allegedly failed to disclose all the details of the order processing and UPS fees they charged at Ticketmaster.com between 1999 and 2013.

Everyone who bought tickets during this period is being given a $2.25 credit per ticket (for up to 17 tickets) that can be used toward a future show. They are also being given a $5 UPS voucher for each time they used UPS for ticket delivery. The big thing that caught everyone’s attention, however, was receiving a voucher good for two free general admission tickets (up to 17 such vouchers) for certain Live Nation concert events “subject to availability.”

Beneficiaries of the settlement soon began complaining loudly that all the concerts that were being offered where they could redeem their vouchers for free tickets were sold out quickly. And the concerts being offered free were often second-rate, and with none available in 24 states.

How could this happen? Ticketmaster initially only made available $5 million worth of tickets available. Assuming each one had a normal selling price of a mere $25 (a very conservative price), that means only 200,000 tickets were available. And since each person could get a minimum of two free tickets, only 100,000 of the 50 million class members could be satisfied. Ticketmaster quickly added another $5 million worth of tickets to the pool (200,000 free tickets in our example), but those have been all but snapped already too. Now they are promising a new infusion of free tickets.

*MOUSE PRINT:

In fact, according to the actual settlement agreement, after the initial $5 million in free tickets, Ticketmaster only has to provide comparatively few tickets and only for the events of its own choosing.

Live Nation will arrange for at least 100 tickets at each event to be made available to the Class Members free of charge for at least 60% of the events that take place at Live Nation owned or operated amphitheaters.

There is overall only a $42 million minimum expenditure that Ticketmaster has to make during the years of the settlement, and if not enough vouchers are redeemed in any year, they have to pony up more free tickets to make up the difference.

From a practical standpoint, class members should not expect to receive any free tickets to shows, and no more than a couple of bucks off any ticket they actually purchase.




  ADV


• • •

May 9, 2016

Is it a TV Show or is it Advertising?

Filed under: Uncategorized — Edgar (aka MrConsumer) @ 5:45 am

Most people can tell the difference between a television show and an infomercial made to look like a TV show. More subtle is advertising within television shows or movies, such as when a product is shown casually on screen (“product placement”).

A TV program that aired last week pushed the concept of product placement to a new level. Here is a 30-second clip from Modern Family, where one of its main characters, a real estate agent, laments being outclassed at career day at his daughter’s school by a periodontist.



Click play button

What 99 and 44/100ths percent of viewers don’t realize is that spiel by actor Ty Burrell was actually an advertisement.

*MOUSE PRINT:

Realtor credit

That’s right, at the end of the program, about three seconds before the screen goes black, viewers learn that the National Association of Realtors paid ABC for that little explanation that not all real estate brokers are “realtors.” (See story.)

We don’t know much ABC got paid for including that in their program, but it frankly seems a bit manipulative of the audience to have subtle advertising masquerading as program content. What do you think?




  ADV


• • •
Next Page »
Powered by: WordPressPrivacy Policy
Copyright © 2006-2018. All rights reserved. Advertisements are copyrighted by their respective owners.