Have you seen the movie “The Smartest Guys in the Room?” Its about greed and the Enron conspiracy and how their top executives stole and looted from the public. If you haven’t seen it, you should, its a great movie, showing the reality of greed in the corporate world.
In the telecom audit arena, I’ve seen the same kind of behavior by telecom executives as those depicted in the movie. Its all about greed. We as telecom audit professionals and telecom cost savings personnel, along with many business telecom consumers all know who they are. Those devious “smartest guys in the room” don’t work for Enron anymore, I think that they are the telecommunications carrier managers and attorneys for the top telecom carriers in the country who devise complicated yet binding legal contract billing methodology in order to maximize profits so that they can effectively gouge unsuspecting business telecom consumers to the tune of billions of dollars. They are raking in billions of dollars in added revenue each year as a result. As a telecom audit professional, I see the real effects that these contractual nuances have on customer telecommunications bills.
As I work my share of multi-million dollar corporate telcom audits for BottaBoom Telecom Auditing, meticulously combing through the vast myriad of charges on phone bills and solving the complicated over-billing puzzles I encounter, I envision these people who devise telecom contract language and policy (the telecom carrier brain trusts) sitting in some conference room for hours and days at a time. Their greedy mission is to find all of the ways to tilt the zero sum game of telecom billing their way in their favor, to enhance their profitability and ensure that the business telecom consumer is squeezed for every last penny. And, I must say, when you closely examine their revenue enhancing tactics and the fine print of telecom contracts in detail, the terms are frighteningly brilliant and quite effective at legally allowing telecommunication companies to get away with legally gouging the typical business consumer.
Professional telecom auditors seem to be the only ones who can unlock the secrets of their greedy billing tactics and navigate through them. But I guess I should be grateful, If it wasn’t for these vast billing issues and their complicated legal nuances and protections to wade through and solve, I’d be out of work. But not only are professional telecom auditors the real heroes in all of this, they are the most ethical and the ones who wear the white hats. The telecom auditing profession requires meticulous sleuthing with a well-trained eye who possesses many years of technical telecommunications and auditing discipline to see through the muddy waters of telecom billing and pinpoint the areas of telecom expense waste for large US companies. We have to outsmart the smartest guys in the room and often do.
At a recent cell phone bill audit project meeting, I had a high ranking Vice President of one of the big five cell phone carriers recently tell me with a straight face, “we really don’t want to present ourselves as being greedy or trying to lock our customers into unreasonable contract terms.” I retorted with, “you must be kidding me, that is exactly what your company does.” That is like Bernie Madoff saying he did not run a Ponzi Scheme! I went on to explain to this VP in detail all of the numerous billing scenarios and term commitment tactics used by his company against my client by his employees and management. Thereafter, he could not possibly defend his company. The contractual rules commitments of many cell phone providers and carriers are in place to trap companies and mandate that you stay with their shoddy cell phone service for years as paying phone prisoners and by legal obligation. There is often no real freedom of choice in today’s cell phone business because of how these deals are written and created by the phone companies.
I want to focus here on cell phone contracts. Let’s examine some of the unbelievably twisted billing tactics. What kinds of slimy tactics do we see on cell phone contracts? Here is an example of what I am talking about with one of the big five cell phone carriers that I recently encountered during a telecom audit:
The client signs an order that is presented to their company as a master agreement main umbrella service contract for all of their cell phones and blackberries. This commits the company for two years with the cell phone provider. But when we looked closely at the fine legal print of the contract that the smartest guys in the room dreamed up we found that if you don’t formally stop (terminate) the contract in two years, the contract automatically renews.
And, don’t think that this master agreement contract governs every move you make as a customer. For example, If you order new cell phone equipment from the carrier on one of your cell phones before the master agreement term is up, the new order commits you to an extra year or two of service, beyond that of your umbrella agreement. And, if you order from the carrier’s support center, this commitment is two years. However, if you order through your sales representative, it’s only one year. And remember, if you call in and place an order that is often legally binding even though you are not provided with the contractual terms when you place the order! Keep in mind that the cell phone carriers are covered legally for all of this behavior.
So all of this is really very confusing, so you flee to the carrier sales representative to clarify matters and help protect you and reassure you. But to further complicate matters, the representative explains time and again exactly what you want to hear, not to worry, they’ll handle everything, in two years you can walk away with no early termination fees. The reality is more often than not, you cannot walk, you are trapped and those phony verbal promises never existed because they’ll be denied later. Make sure, to get everything in writing or you’ll never be able to defeat the smartest guys in the room.
And, the issue of cell phone terms has Congress working on the problem as well.
http://news.cnet.com/8301-10784_3-9774874-7.html
I personally think cell phone carrier terms and conditions are the worst, but the cell phone carriers aren’t the only telecom providers to employ the smartest guy tactics enhance their billing revenue. Most long distance and local carriers do this as well. The most flagrant example I find of customer gouging is the minimum monthly revenue commitment scam and misrepresentation of contracts. I’m not talking about a $10 or !5
usage commitment on a small phone bill. I am talking about $1,000 to $10,000,000 and higher usage commitments to carriers and their unreasonable penalties. If you exceed the commitments, the carrier gets paid the extra revenue. If you fall short, you pay a penalty. And it’s all perfectly legal and contained in the fine print. Is that really fair? No. Does this generate a ton of additional revenue for the telephone companies? Yes.
As we wade through all of the contractual jargon and rules, we’ve come to appreciate those that have created them, because they are so effective. Moreover, they actually play into the hands of some telecom carrier sales reps. Ever heard of the bait and switch swindle? It happens in telecommunications contracts, more than you might think. But that is another article for another day.
If you are such a customer who is frustrated by all of the red tape and tactics employed by the carriers and inflicted by the smartest guys in the room, consider a professional telecommunications billing advocate like BottaBoom to fight for you. As phone company business customers continue to grow angrier and get ripped off by unscrupulous telecoms, I see more class action suits to combat and get justice for these blatant and unethical contract and billing tactics.
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Tags: cell phone bill audit, phone bill audit, Telecom Audit
April 30th, 2010 at 3:46 am
Nice piece. Agree with just about everything you write.
I’d also point out that a lot of telecom auditors are guilty of the same crime of taking advantage of the user’s lack of knowledge. I review a lot of proposals and SoWs from auditors, on behalf of our clients, and I can tell you there are a lot of telecom wolves in auditors clothing out there. I see proposals where the contingency rates are 40 to 50 percent of savings for a 24 month period. That’s just crazy.
Keep up the good work.