David R. Henderson  

Verizon's Unaccountability

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As regular readers of this blog probably know, I am a strong believer in the importance of commercial accountability. One thing that makes markets work so well is that firms are accountable for their errors. They have a strong incentive to be accountable. And most of us have got used to their being accountable. So, for example, when a major firm makes a billing error, which, in my experience, doesn't happen often, it is relatively straightforward to call the firm's customer service number and get the bill altered.

One thing that gives firms a strong incentive to be accountable is the fact that when they are not, their customers tell their friends, tell Yelp, Facebook about it, and, occasionally blog about it.

So that is what I'm doing here: blogging about a major corporation that has generally treated me well but recently treated me so badly that it was shocking: that firm is Verizon Wireless.

I've waited about 10 days from the time this happened to make sure I was doing this not mainly out of anger but mainly to (a) warn others and (b) do my little bit to make Verizon more accountable. I don't know how successful I'll be on (b).

Here's what happened.

In about mid-May, my wife and I knew we were going to Grand Cayman for a week and knew that phone calls on our Verizon account would cost a lot. We also knew that we didn't plan to use the phones much.

So I called Verizon to see what plans they had. They offered two options: (1) we could pay $10 a day per phone and use the phones a lot, or (2) we could pay $40 each and have limited usage--100 minutes on the phone and 100 texts. Since we would be away for 8 days, and we wouldn't be using the phones a lot, I opted for option (2). It would cost us $80 total instead of $160 total.

When we got to Grand Cayman, we each got a text message from Verizon telling us that as soon as we used the phone, we would pay $10 for that day. In other words, Verizon had not complied with my stated, and acknowledged by them, request.. My plan was to contact them if and when I got a mistaken bill. Each day, we received a text message telling us that if we used the phone, we would pay $10. But no way was I going to use valuable time trying to correct their mistake. I would wait until we got the bill and, if the bill was wrong, call them from the United States.

Well, the bill was wrong. No problem, I thought, I've had such issues with big companies before and in my experience--maybe I'm lucky but I don't think so--the company has come through, usually on the first call.

This time was different. The first person I talked to--I've forgotten her name--explained that by using the phone I had agreed to pay the $10 each day. No, I answered, we already know what I agreed to and you don't deny it: it was option (2). It doesn't matter, she said, because by using the phone each day, we were agreeing to pay the $10. I saw this was getting awfully circular and so I asked to speak to her supervisor.

Her supervisor, named Trey, gave me the same story. He even admitted that they had made a mistake by putting me on that plan rather than the $40-each plan. So, I said, given that you admit Verizon's mistake, I should not be responsible for paying for it. I don't know if his next statement was meant to confuse the issue or whether he was genuinely confused: he said that there was no way I could get out of paying the whole $160. I responded that I wasn't trying to get out of paying the whole $160. I was prepared to pay $80 and if he looked at our usage, he would find it well below the limits we had paid for. Then we went round and round. I followed my own rules that I always have in these situations. First, never use obscenities: it doesn't fit with the person I want to be and, moreover, it gives the other person the moral high ground if he/she objects. Second, don't shout. Third, don't attack the character or intelligence of the person you're talking to; always go with what's reasonable. I asked to speak to his supervisor.

I got a woman named Bree, who wouldn't tell me her last name but is in Florida. Bree gave me the same line--by using it, I had accepted their terms. I gave her the same argument back: both sides had already agreed to the terms in mid-May and Verizon was refusing to honor these terms. Moreover, it was not my responsibility to correct Verizon's mistake immediately.

But then Bree let something slip. She looked at something on her computer, I assume, and told me that the way the Verizon employee had set it up, the $40 per phone version I had bought wouldn't kick in because the other one was the one the system would automatically go to. I told her that this cinched my case. This was now clearly Verizon's mistake and I should be made whole. She told me that she couldn't adjust the bill down by $80 but she could adjust it down by $50. I told her that I found her claim implausible: if it was possible to go in and reduce the charge by $50, I said, then it was hard for me to believe that it was impossible for her to go in and reduce the charge by $80. So, I said, what you're telling me is not that you can't reduce the charge by $80 but that you won't reduce it by $80. Bree kept going to the "can't" word. I realized that this was probably the best I could do, and so I accepted. I told her, though, that I wanted to speak to her supervisor. This was on a Friday evening. She told me that her supervisor wouldn't be in until Sunday and so we set up a time--8:00 a.m. PDT and 11:00 a.m. her time--for the supervisor to call. That was June 18. I'm still waiting for the call.

One other little insult to injury. At 2:18 a.m. on that Sunday, both my wife and I received text messages on our phone telling us:

As of 6/17/2017, your INT TRVL 100MB/MIN/MSG FOR 1 MO plan is removed. We hope you enjoyed your trip.

Fortunately, I slept through it. My wife, though, was woken by her text message.

The next day I answered:

I did enjoy the trip. Thank you. Do you really think, though, that I like being told at 2:17 a.m. [I typed 2:17 instead of 2:18] that a plan has been removed, a plan, by the way, that Verizon refused to honor?

Now, as I write this, something occurs to me. Since the 30-day period ended after the end of the last billing period, will Verizon, on my next bill, charge me an additional $80 for the plan that, Verizon admits, did not kick in? We'll see.


Comments and Sharing






COMMENTS (24 to date)
Antischiff writes:

Dr. Henderson,

If you haven't already, publicly tweeting to Verizon about this, with a link to your blog article, will likely get you the quickest, most generous response.

David R. Henderson writes:

@Antischiff,
Fantastic idea. Thanks.

Daniel Hill writes:

Change cell phone providers. Clearly this lack of accountability is deeply embedded in Verizon's corporate DNA. Even if you eventually solve this one, the problem is systemic. It's why hell will freeze over before I'd ever do business with Comcast again.

The Original CC writes:

Yeah, they are really terrible. I had a similar (but not identical) issue when I went overseas. They offered me one plan and then after I accepted it and traveled, they denied that such a plan ever existed.

James writes:

For the nonlibertarians who frequent this blog, this is a great opportunity for you to help Dr. Henderson see what he his missing (Markets really can do amazing things but only because governments make the participants behave themselves.)

Please get the government to intercede for him.

James writes:

[Comment removed pending confirmation of email address. Email the webmaster@econlib.org to request restoring this comment and your comment privileges. A valid email address is required to post comments on EconLog and EconTalk.

[Also note: This commenter is a different "James" from the one commenting earlier in this thread.--Econlib Ed.]

john hare writes:

I've been with AT&T for cell phone use for over 25 years. Sometimes it's better and sometimes relatively worse than the competition. Without the competition though, I'd probably still be paying several hundred per month for a single line with no caller id, texting or any of the other goodies.

With existing competition, a single blog post like this can cost Verizon thousands. Enough similar things can clobber their bottom line. Thanks for helping keep your provider in line, which by extension keeps mine in line.

Grant Gould writes:

If there is one thing that my 12 years in the telecoms business taught me (apart from "it's time to leave the telecoms business!") it is that no company that has ever been a monopoly in its past, or is descended from monopolies, will ever reconcile itself to customer choice.

Verizon still thinks like a monopoly, and resents its customers' reminders that it isn't.

Rob writes:

Grant Gould,

That is why a number of years ago I switched to T-Mobile. They seemed to get customer service. Unfortunately, in my current city and specifically in my neighborhood, their coverage is awful. My home office has a dead spot, if I could make a call from it, it would probably drop.

So I am with AT&T now. Which in less than 6 months has been a disaster to deal with, but provides great cell service.

Ken writes:

Econ log is generally an informative blog. I read it every day and it has taught me a lot about economics.

It's unfortunate that Prof. Henderson has chosen to use this site to vent his personal frustration about a consumer issue.

Is the $80 that he was incorrectly charged worth undermining the purpose and mission of EconLog? I don't think so.

John writes:

Customer service is poor because Verizon is part of an oligopoly. It's well known telecoms are in an oligopoly due to the unique difficulties that come with selling spectrum rights. Did Prof. Henderson really just discover the existence of monopolies (market failure)?

Johnhare writes:

@Ken
My interpretation is a bit different. Corporations should be held accountable. How do you suggest doing that with one that has been unresponsive through four layers of contact?

David R. Henderson writes:

@Ken,
Econ log is generally an informative blog. I read it every day and it has taught me a lot about economics.
Thank you, Ken. I appreciate that very much.
It's unfortunate that Prof. Henderson has chosen to use this site to vent his personal frustration about a consumer issue.
As I wrote in the post, it wasn’t just a vent. If I had written it within 24 hours of the incident, it would have been just a vent.
Is the $80 that he was incorrectly charged worth undermining the purpose and mission of EconLog? I don't think so.
First, I’m glad that you can see that the $80 was incorrectly charged. Second, and more important, have you read some of the posts I’ve written in which I’ve congratulated and celebrated companies for their great service, great products, etc.? Here and here are examples. Have you objected to those too? Or is your objection asymmetric?

Hazel Meade writes:

I had problems with Verizon in the past as well. When I was a graduate student, I had a "prepaid" phone with Verizon. This is often a cheap solution for poor people who can't afford a monthly plan. However, Verizon requires it's "prepaid" users to deposit a minimum amount to the phone each period. If you don't use all of your prepaid minutes, you end up with a gradually increasing balance, and if you don't make the minimum payment, you forfeit the balance in your account.
It amounts to a minimum service fee of around $10 a month just to keep your phone active, even if you aren't using it. it also tend to lock people into Verizon because they don't want to forfeit the balance in their prepaid account.

Ultimately, when I switched out of Verizon, to a different carrier, I lost around $75 which had built up in the account because I keep paying the required minimum but wasn't using up the minutes.

I felt quite taken advantage of, as a grad student living on a stipend. And I can imagine how poor people who get trapped in such "prepaid" plans must feel.

Solution: Never ever use Verizon. Unfortunately, I need internet access, and Comcast was almost as bad (they tried to bill me for renting a modem that I didn't have). But I will never use Verizon as a cell phone carrier. It's personal.

Antischiff writes:

Ken,

Dr. Henderson put his situation in an economic contest, but anyway, him and the other authors here determine what the blog is about.

Also, should he have to mention that Verizon is one of the most hated companies in America, as part of a hated oligopoly that helps insure Americans pay more for cellular phone and internet services than people in other developed countries?

Antischiff writes:

Dr. Henderson,

Usually companies will ask that you send them a private Twitter message to provide them more information after tweeting to them about a problem, just in case you haven't seen this process unfold before.

Foxhuntingman writes:

I had a similar experience with Verizon.

Maximum Liberty writes:

Professor:

You say,

She told me that she couldn't adjust the bill down by $80 but she could adjust it down by $50. I told her that I found her claim implausible: if it was possible to go in and reduce the charge by $50, I said, then it was hard for me to believe that it was impossible for her to go in and reduce the charge by $80. So, I said, what you're telling me is not that you can't reduce the charge by $80 but that you won't reduce it by $80. Bree kept going to the "can't" word.

She was probably being truthful with "can't," as to her own personal ability to make a change. Call centers generally constrain their employees' ability to make retrospective changes that result in refunds, because call center employees are likely to abuse it to get out of conflict. So you have to escalate a couple times just to get to someone with authority to offer anything. One more escalation might have gotten you to someone with a few hundred dollars in authority. This is a particular instance of agency and the theory of the firm.

Ricardo writes:

Switch to Google's Project Fi. I pay less than $30 per month (I don't stream video unless connected to WiFi) and I can use it overseas seamlessly.

David R. Henderson writes:

@Maximum Liberty,
She was probably being truthful with "can't," as to her own personal ability to make a change. Call centers generally constrain their employees' ability to make retrospective changes that result in refunds, because call center employees are likely to abuse it to get out of conflict.
Very good point. Thanks.

kingstu writes:

AT&T really took care of me (we should also praise companies when they give great service).

My wife made several calls to the UK (I told my wife to use the Facetime call feature which is free with WiFi). AT&T charged us a bunch of money which was correct since my wife did make the calls.

I called AT&T and they offered to add an international calling feature for $4.99 and then immediatley cancel the feature.

Charges were reduced from about $50 to $4.99...

Daniel Klein writes:

Great post, thanks. Good to expose the chicanery at Verizon.

Gerald Arcuri writes:

When I read the title of this article, I thought I might be in for a description of a really horrific customer experience. The situation described by the author is a walk in the park compared to the experiences that I and many other people have had with the likes of Verizon, Citibank, Wells Fargo, and other corporate behemoths.
What struck me about this article is the author's almost naive, Pollyanna expectation that it might be any other way with the "Customer Service" department of Verizon. The simple fact of the matter is that these companies don't care a whit about their customers. "Customer Service" is a useful facade, but the people in the C-suites couldn't care less whether the customers of their companies are satisfied. They run giant juggernauts that simply run roughshod over customers.
"Your call is important to us." Ha.

Daniel writes:

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