Xerox and Billing Errors

This is a story about billing errors by Xerox Corporation during their servicing of our copying machine. It illustrates how alert and persistent buyers must be and, if they are not, they’ll pay more than they should and never know it.

It started when one of our associates was reviewing the service bills over a period of 18 months and found discrepancies between what the repairperson invoiced and the service bill that arrived a few days later. There were 9 mistakes on 18 bills and all the errors were in favor of Xerox. Hmmm!!!
She wrote to the Xerox customer service off ice and called Xerox world headquarters in Rochester, New York. In a series of letters documenting the errors, she cited such examples as: December 19, 1983 -­1 hour of actual billable time, 3.3 hours billed; or October 24, 1983 — 1.3 hours of actual billable time, 1.5 hours billed; or January 31, 1986 — 3 hours of actual billable time; 3.6 hours billed.

We asked Xerox to investigate their other accounts around the country to determine the extent to which this overbilling was a practice, a routine, instead of a few frolics and detours. After a number of calls, Xerox acknowledged the billing errors for servicing our machine and apologized for any inconvenience. Companies rarely pay for such inconvenience when it entails out of pocket costs. They would rather apologize profusely.

It took a little longer for Xerox to inform us that they were broadening their investigation nationwide as we had requested. This announcement came in a letter to our associate dated August 29, 1985 from Ronald L. Mercer, Senior Vice President of Xerox for customer service operations. “We are also conducting a review aimed at determining whether the problem you have reported has affected other accounts,” he said. “You can be assured that we will independently make any billing adjustments that might be in order,” he added.

Almost thirteen months later, Xerox sent out to an undetermined number of customers a form letter dated September 15, 1986. As one of the recipients we read the following words of concession: “During an internal review of our billing process, we have noticed that some invoices for Xerox Time and Materials service dated January 1984 through February 1986 may be in error when compared with the hours on the Service Call Authorization document you received from our Service representative when the service was provided. As a result of our review, we wish to refund to you the amount that we have determined was overbilled.”

There were some unexplained matters. Why did the company start the review only back to January 1984? We discovered errors before that date. Conveniently, the local Xerox customer service manager informed us on June 25, 1985 that his off ice does not have copies of these earlier service calls in 1983. Further, why isn’t Xerox paying interest on these refunds? Just how much money was refunded?

We are awaiting answers to these and other questions from Xerox headquarters. In the meantime, a Xerox spokesman told us that customers have written thank you letters after receiving the notice of refund. To such unknowing customers, it must have felt like a surprising windfall from a company honest enough to discover and correct an error.

In our reserach on billing mistakes, we have found them too widespread to be wholly accidental. The stock reply when you catch such a mistake is “sorry, it’s a computer error.” Well, not so fast. With computerized bills conveying an aura of authority and precision and with too many commercial buyers and regular consumers not being sufficiently alert and insistent, the typology of temptation for all too many sellers comes into play. Even if a few buyers do catch the errors and have them corrected, who demands to know whether there is a wider pattern of overbilling that is behind the fraud?

Readers who are interested in our report on overbilling can send a self-addressed stamped (39 cents) envelope to Bills, Box 19367, Washington, DC 20036.

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