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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 749510  
Subject: Don't Let Your Phone Company Screw You Date: 7/7/2001 10:02 PM
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Check out this Washington Post article on higher long distance rates

http://www.washtech.com/news/telecom/11003-1.html

intercst
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Author: zay34kc3 Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 44664 of 749510
Subject: Re: Don't Let Your Phone Company Screw You Date: 7/7/2001 10:41 PM
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From the article:

Under the agreements being mailed to consumers, AT&T, MCI, Sprint and Qwest are limiting lawsuits by saying that by using their services, customers agree to waive their rights to sue, even in class-action lawsuits. Any disputes that cannot be resolved informally must be resolved through arbitration, the agreements say.

I'm all for anything that will reduce frivilous lawsuits (including many class action suits that merely exist to "hurt those big bad companies" and line the pockets of attorneys), but there is something fundamentally wrong with this.

As I understand it, under contract law, there must be a meeting of the minds for a contract to be enforced. If someone has been duped or misled or a part of a contract was never clear, it's not enforcable. I highly doubt that posting a notice on a website or sending obtuse announcements in 6 point font stating that you agree to binding arbitration merely by using a service would constitute a meeting of the minds.

I also think such a thing goes against the rule of law. We are all equal before the law, and we all have the right to seek redress through the courts. "Agreeing" to binding arbitration in this (or any manner), IMHO, violates that concept.

Perhaps the Supreme Court will decide this way one day. I highly doubt Congress could get off its lazy ass and do it.

zay34kc3

Lawyers are welcome and encouraged to correct any misunderstandings on my part. However, by reading or even clicking on the URL for this post (regardless of whether or not it downloads), you hereby agree to binding arbitration should I offend you. You may not take me to court or become part of any class-action suit against me.

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Author: LudditeAndroid Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 44665 of 749510
Subject: Re: Don't Let Your Phone Company Screw You Date: 7/7/2001 11:17 PM
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Yep zay. The common legal term (which most of you already know) is "informed consent."

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Author: PK227 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 44672 of 749510
Subject: Re: Don't Let Your Phone Company Screw You Date: 7/8/2001 1:15 AM
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The exact same thing happened to me last year. We have gone to the same time share for 20 years and I have always used my *** calling card while there for long distance calls. Only when I got the bill this time, it was for $600. (I talk a lot) So I called them and said...huh?? They informed me that my rate had changed and that I was also being charged $1.25 per call for a connection fee. When I objected on account of I was a long time customer and thought at least a "phone call" to let me know about these new charges would have been nice...they said....we can raise our rates any time we want to. I allowed as that may be true...but they wouldn't be able to do that with my rates any more because I was canceling my account. I now use...Sam's Club (I hate WalMart but I can be bought) calling cards while on vacation and AOL long distance at home. This is totally unacceptable behavior and we should all vote with our feet. Of course, AOL probably could raise their rates any time they felt like it too, but they haven't so far, but I suppose one has to check periodically to see what the actual rates are....what a pain.

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Author: JoycePieritz Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 44695 of 749510
Subject: Re: Don't Let Your Phone Company Screw You Date: 7/8/2001 2:10 PM
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If you use ATT check your long distance bill. You might notice a 9.9% (yes percent!!) surcharge labeled "Universal connectivity charge" The bill I got last week said to call a number for an explanation, which I did. Ready for the explanation?

Well, it seems the nasty old government requires the phone companies to help provide funds for service to folks who live in out-of-the-way areas, and this costs money, so, being the philanthropists they are, ATT charges you 9.9% of your loing-distance bill to cover their costs.

Let me guess, if I talk a lot, all that extra money goes to the government to provide rural areas with phone service? Do you really think it does? I don't!! What a rip-off!!!

Joyce

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Author: tngirl74 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 44698 of 749510
Subject: Re: Don't Let Your Phone Company Screw You Date: 7/8/2001 2:14 PM
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If you use ATT check your long distance bill. You might notice a 9.9% (yes percent!!) surcharge labeled "Universal connectivity charge" The bill I got last week said to call a number for an explanation, which I did. Ready for the explanation?

I forget the details, but Gore slipped part of this in to assist with his internet.

Creep.

tngirl



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Author: MrDonCorleone Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 44701 of 749510
Subject: Re: Don't Let Your Phone Company Screw You Date: 7/8/2001 3:24 PM
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As I understand it, under contract law, there must be a meeting of the minds for a contract to be enforced. If someone has been duped or misled or a part of a contract was never clear, it's not enforcable. I highly doubt that posting a notice on a website or sending obtuse announcements in 6 point font stating that you agree to binding arbitration merely by using a service would constitute a meeting of the minds.

First off, the requisite legal disclaimer: nothing in this post constitutes legal advice. Thus, no one reading or informed of the contents of this post should interpret anything written herein as legal advice. Perhaps most importantly, no one should make any decisions based on the writings in this post without first consulting an attorney licensed to practice in your state. I am not that lawyer so do not rely on what I'm writing.

That said, I do have some particularized knowledge of this area of the law (arbitration was one of my two focal points during law school and I was acknowledged, even as a recent graduate, as the "arbitration expert" at my former firm). Nonetheless, because the results of my Oregon Bar Exam aren't yet in, I'm not yet entitled to offer legal advice. So, just consider this post to be a collection of educated guesses of a recent law school graduate and we'll probably be fine.

And now on to the real point of all this . . . arbitration is one of the law's most favored areas. You are correct to state that contracts require a meeting of the minds. Some can be oral (e.g. sales of goods under $500), some must be written (e.g. permanent transfers of real property), and particularized rules abound. Yet, through it all, contracting parties must always mutually assent to the contract. It is generally essential at law (though not always at equity) that the two parties agree on the substance of the contract.

Arbitration takes this to a new level, however. In the 1920s, Congress enacted the Federal Arbitration Act. It was a rather expansive act that basically created favored status for arbitration agreements. Since that time, and particularly within the last 30 to 40 years, the Supreme Court has really picked up the ball and run with it. In Prima Paint, for example, the Court created the "severability" doctrine. Granted, strong dissents opposed the doctrine, but the doctrine stood firm and remains to this day. The severability doctrine states, in effect, that an arbitration clause contained in a contract will remain effective even if the contract itself is void. That's right: if the contract containing the arbitration agreement is void in its entirety, if no provisions of the contract can be enforced, if you need not perform under the contract at all, you will still be bound to adhere to the arbitration agreement because the arbitration agreement is "severable" from the rest of the contract. Practically speaking, the only way to avoid the arbitration clause would be to prove that the arbitration clause itself, not just the contract, is void or otherwise unenforceable for some reason (e.g. it was entered into fraudulently, under duress, etc.).

As if it's not apparent from that alone, the Court has expressly stated that arbitration agreements receive a strong presumption of validity. In practical terms, the burden will usually lie with the consumer to prove that the arbitration clause it "entered" with a company is invalid. And that, under today's favored view of arbitration, is a tough row to hoe.

For a case on the same note as the one you mentioned, a recent case (Hill) involving a consumer who purchased a Gateway computer is illustrative. Boiling it down to its bare essentials, the Hills ordered a Gateway computer, which arrived with all components and some documentation that included an arbitration clause. Even though the Hills didn't notice (or didn't care, I don't recall specifically) the arbitration clause, they were held bound to it because they didn't return the computer to Gateway. In other words, if you're going to accept the item, you're going to accept its terms as well. Gateway "agreed" with the Hills to sell it pursuant to an arbitration clause. While it may sound unfair, because the Hills had no idea of this when they ordered it, it becomes fair because the Hills are entitled to return the computer to avoid the clause. It would only be unfair if the Hills had to keep the computer and thus be bound to the clause. Their option to return is, in effect, their option to get out of their arbitration "agreement."

"But the arbitration agreement was buried in fine print!" you say . . . well, the Supreme Court, in a recent Montana case (Casarotto), struck down a Montana state law requiring that arbitration agreements be listed in bold print on the first page of a contract. The Court held that this was an invalid law because it singled out arbitration agreements rather than addressing contracts in general (i.e. the state law discriminated against arbitration agreements, treating them as if they were "second class" contracts, which the Court does not allow). Thus, such "no fine print" provisions directed against arbitration agreements are preempted by the Federal Arbitration Act.

The upside of all this, depending on your perspective, is that arbitration agreements will almost invariably be upheld according to their terms. Thus, the FAA and the Court don't much care what your arbitration agreement says, they merely care that it's enforced. So, you can choose to incorporate state procedural rules of arbitration (like in Volt Info. Sciences) or basically whatever else you want; you just have to be prepared to adhere to any such agreement you make. Reading between the lines, then, you have to be careful to read the fine print if you want to avoid arbitration: the likelihood is high that even if you don't notice the arbitration agreement you signed, you'll be bound to perform it (unless, of course, you choose to return the product or otherwise choose not to receive the benefit of your contract).

Naturally, this is nowhere close to an adequate primer on contract law or arbitration law. I just wanted to hit a few key points to get some proper perspective into the discussion. Arbitration is heavily favored in the law, and it seems to get more favored all the time. It's not necessarily bad, but it sure is likely to be binding.

In closing, let me reiterate some very critical points: I am not yet a licensed attorney as my bar results aren't yet in. I cannot offer legal advice. Nothing I've written is legal advice and you should not interpret this as legal advice. I just wanted to offer my opinion based on what I've read. Do not under any circumstances make any decisions based on what I've written. Arbitration is a complex area and you are highly advised to consult an attorney licensed in your state prior to making any arbitration related decisions.

Thanks for reading this far, and I hope this little "mini-lecture" has helped clarify things a bit.

David



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Author: stephan1000 Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 44711 of 749510
Subject: Re: Don't Let Your Phone Company Screw You Date: 7/8/2001 6:16 PM
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http://www.washtech.com/news/telecom/11003-1.html
Zay wrote: ...there is something fundamentally wrong with this.


I agree. This is wrong. I think this is not a legal move, but one of bluff and intimidation.

It reminds me of all those "No Refund" signs I see in stores. Never mind that many of those signs contradict our consumer protection laws ( www.ftc.gov ). Many companies are banking on the ignorance of their own costumers.

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Author: stephan1000 Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 44716 of 749510
Subject: Re: Don't Let Your Phone Company Screw You Date: 7/8/2001 6:48 PM
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MrNotaLawyer wrote:
...Even though the Hills didn't notice (or didn't care, I don't recall specifically) the arbitration clause, they were held bound to it because they didn't return the computer to Gateway. In other words, if you're going to accept the item, you're going to accept its terms as well. Gateway "agreed" with the Hills to sell it pursuant to an arbitration clause...


Coming back to the phone company. Could a consumer send in a prepaiment with a note on the check saying that the acceptance of the check will imply the voidance of the arbitration clause?


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Author: RidinTheTide Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 44804 of 749510
Subject: Re: Don't Let Your Phone Company Screw You Date: 7/9/2001 11:18 PM
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The phone companies are starting to get under my skin. They are operating under principles that can only work if the product they supply is not a commodity. When the public starts waking up to the fact that this service is a commodity, and when the paradigm shifts from requiring local/LD service to choosing cell-phones there will be a wake-up call (pun somewhat intended). Those pre-paid calling cards work great no matter where you are, too.

My belief is that they are aware of this shift and trying to maximize cash flow prior to the mass exodus (if it really does ever come).

An example:

When signing up for local service at a new address I was asked if I want the "linebacker" plan. After asking what it is and how much it costs, I declined it. I was immediately challenged with scare tactics like "Do you know what that big gray box is hanging on the pole outside your house?" I said "No, do you?"

I was told that if something went wrong with wiring in my house I would have to pay a service technician $40/hour to repair it. I responded that rather than do that I would allow them to do a present value analysis to decide whether to pay for it themselves and retain that monthly cash flow or lose my business entirely. My cell phone could be made to suit my needs fine and if another company doesn't want to fix me up free of charge then I'll do the analysis based on the $7/month I've saved since this point in time and decide whether or not I want to pay them. If many people do this they'll be statistically better off just fixing it. If not, I'm not losing anything I truly need.

The phone operator continued on yet another tactic and I butted in and told him that this was the third time I was telling him that I declined the service and he should just advance through his prompter system until he gets past the linebacker persuasion sequence. He did. CRM software my #^@!.

Now, how many people pay $7/month for this insurance -- that's about $84/year. How often do they think the wiring is going to be faulty?

These guys aren't operating on customer satisfaction but on customer momentum -- it's easier to stay where you are or say "okay" when scared into potentially having to pay for something the phone company should have an interest in maintaining themselves. The monthly bills are also small enough that they may pass under most people's cost-saving radar.

Sorry for the rant. I prefer to spend money with companies that actually behave like they care about their customers. I'm all for profitable business models -- but I'm also for getting a fair value in exchange for my money.


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Author: telegraph Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 44845 of 749510
Subject: Re: Don't Let Your Phone Company Screw You Date: 7/10/2001 10:50 AM
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re: Phone companies

"
Sorry for the rant. I prefer to spend money with companies that actually behave like they care about their customers. I'm all for profitable business models -- but I'm also for getting a fair value in exchange for my money."

When you buy a new car, you are going to be hassled about doing your financing through the dealership/car company and 'extended warranty'. Both cost you money. the extended warranty is 'insurance' that most people will not benefit from.

When you watch TV, look at any of the ads on TV......how do you differentiate beer? cigarettes? cereals? it is not done on the 'merits' of this brand vs that, but purely on marketing hype. Really, the Swedish Bikini team and any relationship to the product?

When you sign up for insurance, brokerage services (full service, wrap plans, all-on-one statement convenience, etc, it is the same thing. Lots of extras thrown in.

You go to MacDonalds or Whattaburger, and they try and upsell you. Fries with that? Dessert with that? Supersize?

Just different businesses.



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