If there’s only one company you should be able to trust implicitly to look out for and protect you, it’s home security.
After all, these are companies that you pay monthly to protect you from unwanted intrusions.
So Bob Klatskin could only wonder what was going on with his Brinks home security bill when he noticed a “cost recovery fee” of $ 1.97 on top of his monthly service charge of $ 46. $ 60.
The Palm Desert resident emailed the company asking if they were overcharged.
A Brinks service representative responded by email to say that Klatskin is not overcharged and that the cost recovery fee is applied “to all accounts.”
The charges are “to make sure we are communicating properly with your system,” the representative explained. âFrom time to time, we assess our costs with the maintenance equipment and features we provide to customers, and we make a nominal adjustment to our rates to cover the increased costs of providing the service. “
Klatskin’s monthly cost recovery fee was 97 cents last year, but has more than doubled this year to $ 1.97. It will rise again to $ 3 on Jan. 1, according to the company.
Klatskin, 69, was confused. Its Brinks contract explicitly states that its “total monthly fee” for its home security service will not increase by more than 5% per year.
Factoring in cost recovery fees, the total charges for its home security service have increased 6.6% this year. It is expected to increase by almost 7% next year.
“This is misleading,” Klatskin told me. “They found a way to charge more than the annual limit on rate increases.”
Of course, that seems to be the case – and this is yet another example of companies adding sneaky fees to people’s bills rather than raising list prices.
I wrote the other day that the Sherwin-Williams paint company is one of the latest companies to embrace this deceptive practice, adding a 4% “supply chain load” to people’s bills. at the register.
The most honest and user-friendly way to pass on higher trade costs is to increase list prices.
âWe should all be able to count on a price tag, but it’s impossible to compare costs between companies when surcharges are hidden,â said Carmen Balber, executive director of Consumer Watchdog, an advocacy group in Los Angeles.
âCompanies pull a bait and a switch on consumers when they refuse to disclose the full price of a product up front,â she told me.
Klatskin feels the same. âIt sounds like a scam,â he said. “It looks like they’re just charging more for things they should be doing anyway.”
Brinks Home Security’s terms and conditions state that the cost recovery fee “recovers the costs incurred for the provision and maintenance of hardware, firmware and software to connect customers’ homes and businesses … to alarm monitoring networks “.
That is, it covers precisely what the main monthly service charges cover – a reliable home security network.
That is, the company either doubles or charges a deceptively low list price for its basic service and then makes up the difference with additional fees.
Either way, this is a shady business practice that deliberately misleads customers into believing that they are paying less than they actually are.
This is especially the case with people like Klatskin who set up automatic payments with their credit cards and may not closely inspect the monthly bills of individual businesses.
âI only saw the full price on my credit card bill,â he said. âFor months, I wasn’t even aware of the cost recovery fees.
Katskin noted that as soon as he questioned the cost recovery fee, a Brinks service representative was quick to waive a year’s fee “out of courtesy.”
I had the same experience when I called the company and, masquerading as a client, I also expressed doubts about the charges. A representative immediately offered to waive 12 months of fees.
It’s hard not to get the impression that Brinks anticipates some people will do the math and feel cheated, and took the initiative in empowering service reps to make things right, albeit temporarily.
This calls into question the real need for the cost recovery fee.
Erica Bartsch, spokesperson for Brinks Home Security, said the company plans to spend around $ 125 million to improve its network capabilities as wireless businesses move to more advanced 5G mobile technology.
âCost recovery fees are charged by the company to fairly recover a portion of those costs,â she told me.
I pointed out that network maintenance and upgrades seem to be part of the cost of running a home security business that depends on telephone and wireless systems for service.
I also pointed out that Brinks customer contracts clearly state that the total cost of the service will not increase by more than 5% per year, but the cost recovery fee virtually guarantees higher price increases.
It reminds me of how Frontier Communications, which took over landlines from Verizon in California in 2016, added an “Internet infrastructure surcharge” of $ 6.99 to the bills of its Internet customers, who already pay up to $ 80. per month for service.
âThis Frontier supplement covers the maintenance and other costs associated with our network infrastructure and your continued access to high-speed Internet service,â the company said, although network infrastructure maintenance appears to be a fundamental requirement for an Internet service provider.
And let’s not forget AT&T, which in 2018 more than doubled its monthly âadministrative costsâ from 76 cents to $ 1.99. The telecommunications giant says the charges “help cover some of AT & T’s costs associated with wireless service.”
AT&T reported a profit of $ 5.9 billion in the last quarter. Still, he has to charge his nearly 200 million wireless subscribers a few extra dollars each month to keep the corporate lights on?
It’s like a bad joke.
The answer, as I said before, is to require companies to include all costs in one list price, which they do in Europe.
It’s ludicrous that American consumers can’t figure out the total cost of a product or service until the bill arrives – and even then, they’ll need a calculator to factor in all the taxes and every expense.
While we’re at it, what about a law that says a company can’t split current trade costs into separate surcharges?
If that’s a normal cost of doing business – like maintaining a network of services if you offer, you know, a network service – then that’s what your base price should include.
Oh, and if your contract says prices won’t go up by more than 5% per year, don’t sneakily increase your prices by more than 5% per year.
It’s not just unethical. This is a bad deal.