Confused Consumers

The Height of Illusion

Lights-Maurimit
  • Why it matters

    Why it matters

    Companies are using tracking technology and hidden charges to rip off consumers.

  • Facts

    Facts

    • Roaming fees charged by mobile phone providers are about to be banned by the European Union.
    • The VW emissions scandal is an example of a hidden rip-off, where software was designed to quietly deceive emissions testing stations and, ultimately, the consumer.
    • Many supposedly free services, such as free game on the Internet, entail costs when consumers opt for a higher level of service.
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  • Audio

    Audio

  • Pdf

If there is one thing I can’t reproach Deutsche Telekom for, it’s lack of transparency. I had hardly left home recently when I received the following text message on my iPad: “Your international data usage has exceeded €21.04.”

But then the company added this businesslike statement: “This information may be delayed and may therefore deviate from actual usage.” In other words, it’s perfectly possible that the facts are completely different, which, in this case, could only mean: much more expensive, and the text message is reaching me like the light from a star that imploded millions of years ago – which may also be what my bank account has just done.

In moments like this, what is a responsible consumer to do? My first reaction was to desperately search for WLAN hotspots and switch off anything that could somehow suck data out of the Web. Still, I kept getting new text messages, and the only funny thing about them were the occasionally odd amounts: €48.03, €63.21, €80.

I don’t want to upset my employer unnecessarily here, but the costs kept rising within only four days. I had neither streamed Hollywood movies night after night, nor was I traveling in Outer Mongolia. In fact, all I did was sit in the mountains of Switzerland, one of Europe’s high-wage countries, and read Handelsblatt.com.

I have sometimes had the impression that free flights can only be booked in months without the letter R in the name, and two years in advance on holidays when there is a new moon.

Despite all the pressure from regulators and big promises from providers, these kinds of costs are still being charged. They are called roaming fees, a term that only partially coincides with the truth. The word “fee” has a semi-official sound about it, and yet these costs are either purely arbitrary or simply highway robbery, which at least comes closer to the English word “roaming.” And even though this absurd rip-off is being abolished in the coming months, at least in the European Union, there are plenty of examples of similar and, unfortunately, very common tricks or even flat-out lies.

The VW emissions scandal is the most glaring example of a gradual development, and in fact, emissions levels are not even the real issue anymore, especially given that among other carmakers there are probably similarly wide differences between actual vehicle emissions on the road and in emissions testing stations.

We are talking about something far more fundamental: The fact that companies and entire industries seem to be taking us for fools, which, when push comes to shove, is more irritating and dangerous than being charged a few extra euros here and there.

We are being taken for a ride from morning to night. For me, it starts out in the morning, when I drive to the airport in a Smart car from Car to Go, the statement I receive from the Daimler subsidiary after arriving at the airport tells me: “Your last trip cost €6.18.” That would be fine, except that I’m also quietly being charged another €4.90, merely for driving into an airport. This “fee,” by the way, is always charged, whether an airport marks the beginning or the end of my trip.

This sort of thing isn’t nice, but unfortunately it’s common at a time when budget carriers are no longer the only airlines that charge for checked baggage and cups of coffee. In the same vein, I have to pay extra for a rental car if I want something as unreasonable as winter tires or GPS.

In the food industry, deceptive packaging has become so commonplace that we practically accept it as a fact of life. I also have to accept the fact that my Internet is a lot slower than my promised. Why? Because providers are permitted to tout the “maximum” but rarely achieved data transmission rate in their advertising.

The rip-off is systematic, from extortionate fees at automatic teller machines to absurd issue surcharges with investment funds or something as harmless as the allegedly free games on the Internet, where even classics like Angry Birds charge fees for advancing through each level of difficulty. It extends into the home, with printers and capsule coffee makers. The hardware, or the basic equipment, is practically free, but each color ink cartridge or coffee portion becomes as much of a cost factor as buying prescription drugs at the pharmacy.

I have to admit that I’m already hooked. But is that a carte blanche to take me to the cleaners? The Roman god Mercury wasn’t just the patron god of commerce, but also of thieves. But in addition to being robbed, we are also being egregiously deceived. Electronic devices are rarely as economical as their “energy performance certificates” claim. The Süddeutsche Zeitung recently revealed that there is apparently systematic fraud in the way measurements are determined for energy-saving light bulbs.

Calling a customer hotline is probably something only those customers should do who still believe that accumulated flight miles can be converted into free travel. German carrier Lufthansa’s Miles and More program is sitting on millions and millions of euros worth of frequent flyer miles, which will probably never be redeemed, partly because the process is far too complicated for frequent flyers. I have sometimes had the impression that free flights can only be booked in months without the letter R in the name, and two years in advance on holidays when there is a new moon.

Of course, we are not entirely innocent bystanders. In our role as consumers, we have transformed ourselves back into an animal that ultimately responds to three key reflexes with the desire to purchase something: Reasonable! Inexpensive! Cheap! Still, it has taken decades of self-sacrificing efforts by the advertising industry to successfully condition us to be this way in the first place.

The term “greed is good” has mutated from a half-serious remark to an ideology. And it isn’t as if tricks and deception only lurk where we see the word “cheap.” We are played for fools to the extreme with so-called organic foods. And I even pay extra for the fact that products don’t contain certain ingredients, such as aluminum in deodorant. For some people, the best food is food from which everything has been removed: lactose, gluten, fat, sugar, etc.

It is telling that Volkswagen did not rip us off with defective mirrors or seat upholstery, but with something that is literally intangible: software. And that software is perfect at doing what it was programed to do: to manipulate test readings, emissions testers and, ultimately, us all.

This is indicative of the future, when consumers are more likely to be ripped off in the digital world than in a reality we can touch and feel. And the fact that the Internet also gives us the illusion of total transparency makes it all the more sophisticated.

User review and comparison websites promise me reviews and the truth in the most important currency I am still willing to take seriously: the supposedly authentic voices of other consumers. But experts believe that up to 30 percent of reviews are fake. They can range from euphoric praise to the kind of criticism of competitors that can jeopardize a business.

The chef who uses various pseudonyms to give himself an excellent rating is still the most harmless of examples, especially as the manipulation begins much earlier. The algorithms used by Google and Amazon know us better than we know ourselves. They don’t just remember my previous orders and whether I pay on time. Based on my address and even the model of my computer, they know a great deal about my socioeconomic structure. Studies show that as an Apple user, for example, I’m already assumed to be more affluent – and am offered a different product platform as a result.

Even the times when I place my orders are telling. People who always order between 6 and 8 p.m. are probably employed and are considered less price-sensitive, because that’s when people in a hurry tend to order products and services. And that’s also when, unbeknownst to me, a higher price might magically appear on my screen.

An advisory council on consumer affairs appointed by the German Justice Ministry recently discovered that travel companies were tailoring prices to consumers’ personal attributes. This is merely the beginning. Anything that is technically possible is eventually done – and certainly more frequently in the United States than in Germany. So far, lawmakers have approached these revolutionary innovations much as a child’s toy car would approach the Mars mission.

On the other hand, is it really as bad as all that? Couldn’t the algorithms actually lead to greater social justice? Online socialism 2.0, so to speak? Here’s an example: The European Commission is currently investigating allegations that Euro Disney, the theme park outside Paris, prices package deals for British and especially German customers at several hundred euros more than for French customers – based simply on the assumption that Germans have more disposable income.

Such practices are not only unfair but amount to discrimination. Most of all, they no longer have anything in common with the archaic principle of the “honorable businessman.” But what is his moral foundation even worth today? Honor and honesty? Good faith? Responsibility and accountability? Decency and fairness?

“Culture change” has become one of the most abused concepts in business, a veritable “display-window word” that reveals only one thing: That there is apparently dissatisfaction with the prevailing culture, or else there would be no need to change it. Or, more precisely, company PR departments have discovered a public sense of dissatisfaction that needs to be responded to – and words are the cheapest form of response. Conversely, true change is a rare bird, whether at Deutsche Bank or, most recently, at Volkswagen.

The truly dangerous aspect of all this is that every piece of deceptive packaging, every fake emissions value and every crude advertising lie “fuels our distrust of the system as such,” warns Klaus Müller, head of the Federation of German Consumer Organizations. “This cannot be good, and it ultimately is not in the best interest of the economy.”

Whenever opinion research companies have polled Germans recently on how satisfied they are with the social market economy per se, they have received strongly negative responses. A clear majority believes that it reinforces inequality, widens the gap between rich and poor or simply no longer works the way it used to.

This even makes me worry – that at some point I will no longer merely view a cup of yogurt I’m eating as a product in deceptive packaging, but the market economy behind it, as well.

 

To contact the author: tuma@handelsblatt.com

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