Consumers beware: Overbilling is common

Americans accustomed to paying bills after a quick glance should perhaps be approaching the task with a calculator and customer-service number at their side.

Consumers' monthly statements are riddled with errors, hidden fees, and even fabricated charges, experts say. Companies are increasingly disguising extra costs - tacked on to the bottom of the invoice - in terminology as cryptic as Sanskrit.

The exact scope of the problem isn't known, but consumer groups estimate that Americans now lose billions of dollars each year to needless and unjust charges.

Deceptive or erroneous billing practices are most common among industries that handle a large volume of customer accounts. This includes cable-TV and credit-card firms, electric utilities, and local and long-distance telephone companies. It doesn't help that bills have become as ubiquitous as fliers for free rug shampoos.

"These errors have certainly become more common since telecom reform" in 1996, says Mark Cooper, director of research at the Consumer Federation of America in Washington.

Possible explanations for bad billing range from a growing emphasis on speed in processing accounts to companies' increasingly brazen efforts to boost profits.

Yet many advocates also place responsibility for the continued abuse with customers themselves. They point to a psychology of trust in corporations, left over from an era when one company, like AT&T, set the lone standard for prices and services.

It's a risky mentality, consumer advocates argue, at a time when even the most trusted companies now fix advertisements to invoices, and consistently solicit new business in letters sprinkled with asterisks and fine print.

Linda Schutz of St. Marys, Pa., believes her credit-card company intentionally waited weeks to mail out her first bill, so it could charge her a late fee.

Later, the company said it would cost her $18 to get a copy of her statement. "The statements say: 'Please call this number.' And then there's no number on the paper," says Ms. Schutz, who has been trying without success to terminate the account.

Serious billing problems come in many flavors, including:

• Hidden fees not included in advertised rates, but often written in fine print.

• Unitemized bills that list the balance due without breaking apart the fees.

• Human error, in which a customer-service agent inputs incorrect data or places an order for the wrong customer.

Sometimes, as companies grow, computer-based billing systems that may be 10 years old have trouble keeping up with demand.

Meanwhile, many utilities have cut their workforces to shave costs. Today, it's rare for more than one service agent to look over customer orders, while 20 years ago the numbers were likely checked twice, according to Kathryn Dunham, vice president of The Billing College, a Teaneck, N.J.-based billing consultancy.

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