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Ralph Nader > In the Public Interest > Hotel Telephone Surcharges

The hotel long distance telephone call surcharge racket started around 1984. I first noticed it in a Vancouver, Canada hotel when a long distance call I made came out inordinately priced on the bill. When I objected, the surcharge of 30% was immediately deleted. Neither on the room telephone nor on any of the materials in the room was there any mention of the surcharge. Indeed, even on the bill there was no breakdown between the cost of calling and the surcharge.

In subsequent months and years, the hidden surcharge was found in many of the hotel chains and other major hotels around the United States. Nowhere in these hotels was there any notice to the guests about the surcharge; it was just added. Most hotel guests are on expense accounts, so these people were not too inquiring. Other non-business guests never knew the difference.

The range of surcharges is usually 20% to 40%, depending on the hotel. The Marriott hotels are among the worst. The Anaheim (California) Marriott, for example, charges you an additional 40% of your long distance bill. But recently, some Marriott’s have been putting a notice on the phone in your room, thus moving from a form of theft to merely a form of unconscionability.

Not all hotels have a percentage surcharge. Some have a flat surcharge such as a dollar or dollar and a half. But my observation is that many hotel chains still use the percentage approach, although recently they, probably on the advise of their lawyers, are putting the guests on notice. I have yet to see, however, any explanation accompanying the notice of why such a gouge is justified.

Think of the hundreds of millions of dollars in long distance calls made every year in these chains arid you’ll get an idea of the size of this massive windfall profiteering scheme. It is difficult to argue that this surcharge is anything but a 99% profit item.

There are even more outrageous wrinkles to this scam. Once, two years ago, in a Kansas City hotel, I noticed a charge of $1.25 for a long distance telephone call on my bill. I promptly asked to see the supervisor, because I had not completed any long distance call. He looked at the bill and asked if I had dialed a long distance number. I said yes, I had dialed a number to New York City, but no one had answered. That explains it, he declared. If the phone rings more than six times, there is a $1.25 charge, even if no one answers.

In short, this hotel charges for merely dialing and doesn’t inform its customer. Because I objected, the charge was removed, with the comment that virtually none of their guests had ever objected, but the hotel’s policy, it was said, is to remove the charge if anyone does object.

Consumers send me bills with charges all the time which reflect this small thievery. They usually write that the seller. once confronted by the customer. says something like “Oh I’m sorry, it must be a computer error.” But most often, it is not an error, but part of the computer-facilitated unbundling of charges that facilitates these micro bilks which, in volume, add up to a lot of pure profit.

People even have been billed for being billed — these are called “billing charges.” They are billed by repair garages or hospitals or utilities for services they have never received. But the computer printout appears so authoritative, doesn’t it, and machines are not larcenously motivated, are they? Machines are run by merchants and they allow a far more varied pattern of rip-offs than the more visible thumb-on-the-scale in ye ole butcher shops of yesteryear.

Well, what about the law? Can’t people sue? Sadly, small crimes fall through the cracks of the legal systems. Even under consumer class action rights, whereby consumers sue on their behalf and on behalf of all similarly situated and cheated consumers, the courts make matters very difficult. Judges have said that the amounts per person are too small, finding the people is too cumbersome, refunding a few dollars to large numbers of people is too expensive and viola, the class action is impractical.

In all the six years of these telephone surcharges imposed on hotel guests without their knowledge or consent, no class action has been certified for trial. This country needs small crimes legislation to give people practical remedies to stop these high volume, low then, business crimes on millions or people. If it is too costly to find the consumers and refund the money, some courts have developed a remedy known as a “fluid recovery” which places the money in a non-profit trust fund to support consumer advocacy against similar frauds in the future.

(Readers who support reform or who have any billing fraud complaints can send copies of their bills to The Bills Project, P. 0. Box 2059, Santa Monica, California 90406)