Journey against Gouging Process Fees Starts at Step 1

Like everyone else, I love the convenience that online shopping, ticket-ordering, and race registering provide me.  But, like everyone else, I abhor the feeling that I’m getting gouged.  Every. Single. Time.  “Process fees” and “delivery charges” are like phone cases and chargers that cell phone companies change and inflate with each new model because that money is all gravy ($20 for a $.13 piece of plastic molding?! .14 if you add the cool skin design) (I also hear that phone chargers are going universal by 2012 thanks to the feds).

This  year I’ve intentionally boycotted a few foot races and triathlons simply because I believe Active.com is guilty of this practice, yet I’m forced to use them if I want to pay money to put myself through hours of agony along with 2,000 other people.  But, let me get this straight.  If my race costs $60, I have to pay a service fee of $4, or something.  But if that race costs $130 thanks to the “Rock N’ Roll” branding, I have to pay $10 for the same exact programming that categorizes me into my Age Group by age, gender, anticipated time, previous race history, favorite iTunes song, and shoe brand?!  No.  I also don’t appreciate people charging me different “postage fees” or “UPS” fees when they’re obviously inflating the charge.  It’s not quite as offensive as the $40 restocking fee, but that’s the problem.  It’s almost too small to complain about, until you do the math.  I’m sure I spent over $150 in 2010 simply to let companies register me for races using a computer program written years ago that requires a few column heading changes!

Well, as I begin my campaign to tell Active.com to “keep it honest,” my cause has been supported by someone who was fed up with Ticketmaster’s fees. [And I'd like to put a plug in here for Really Big Free Marathon who has managed to get enough sponsorship to host a free marathon, which is how it should be].

Back in 2003, a class action suit was filed in California to challenge Ticketmaster’s “Order Processing Fee” as well as the alleged “substantial mark-up” of UPS delivery costs which sometimes reached $20…yes, for something that would actually cost about $5.

This past January –eight years later (yeah, I know, that’s a long time)– Ticketmaster.com’s parent, Live Nation, finally settled with the class for $22.3 million to cover the settlement costs.  This actually seems low to me, but I’ll take it to some extent because it’s still money out for them.  Keep in mind, this was a settlement, not a judgment, so we’re required to draw our own conclusions as to whether this was guilt or a business decision to stop the bleeding of $4 million in legal fees.

Class members who meet certain conditions –likely  identifiable by their credit cards and who had to have made Ticketmaster purchases between October 1999 and May 2010– will either receive a cash payment or discounts of one or more future ticket purchases.  Ticketmaster will also make certain changes to disclosures on its website.

This amounts to more than a slap on the wrist, though less than a public Singapore caning.  The $22.3 million clearly isn’t the value of the gouging that occurred over the 11-year span of selling tickets.  And how many actual cash payments are we likely to see?  Then there’s my favorite…discount for future purchases!  So, I have to contribute to their future gross profits if I want to realize a discount?  No, thanks.  I can’t wait for the class action attorneys (the real winners) to stop agreeing to discounts that require future use of the service.  What if I don’t ever want to buy from them again?  What if I no longer want to use AT&T’s dropped-call cell service?  What if I’ve hung up my running shoes?  Am I made whole?

"I will be good*" *I will be more creative in ripping consumers off.

I also love the certain changes to their disclosure. “We will be gouging you with different wording now and telling you it’s for something else.”  We’ve seen the cell phone companies and banks do this for decades now and continue to get away with unnecessary fees.  The FTC continues to help us fight this battle, but as we all know, it takes an Act of Congress to get anything done around here…(double entendre intended).

Neither Live Nation nor Ticketmaster admitted to doing anything wrong.  However, they were in the hot seat last February 2010 when the FTC charged them with a bait-and-switch tactic that caused customers to pay up to four times the face value of Springsteen tickets (some of you might say that’s their own fault for wanting to see him, but I have to tell you, he puts on a great show…at least he did back in 1985).

Perhaps someday, Live Nation/Ticketmaster will endear itself to many of its long-gone customers by reducing these fees and announcing it…followed by all the other companies.  And perhaps, I should wait for Hell to freeze over.  I do believe however in taking pro-active steps beyond what the FTC is doing –especially if we can’t get a Federal budget in the next few days– and I do believe something can be done about this problem.  I just hope it doesn’t take 8-year long class actions every time.

I’d actually love to hear others’ pet peeves and who their first target would be.

Happy Consuming,

Bill

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