Personal Soap Box: Insight Communications, Inc & the “bundling” trap

I have subscribed to Insight Cable, telephone and internet for a number of years for services at my home. Over a year ago I asked if they would allow me, as a loyal customer, to add the unlimited long distance they were advertising for new customers to my phone service for the advertised rate (free). They allowed me to do this, never explaining that I would now be bundled into an introductory service plan. I thought they were just doing smart business by rewarding a long time customer. Nope – after a year I was informed that my “introductory package” price was being jacked up an extra ten dollars. I discovered a new line on the bill that showed “unlimited long distance” as costing me $11.95, an astronomically high amount with today’s options from VOIP (voice over internet protocol) companies.

Since the $11.95 was a line item, I thought I could merely call and cancel that particular service. Again – NOPE! Sure, I could drop down to basic phone service at $23.00 per month, but my internet and cable charges would jump up higher than what I would be saving by losing the unlimited long distance. I was TRAPPED by Insight’s bundle. Not only that, I walked into it blindly by not being told and not realizing that I was being put into an introductory offer. I am currently pondering the legalities of this. Specifically, if nothing on the bill and no contract exists that says the prices listed are only because they are bundled together, is it unlawful (civilly or criminally) to refuse to drop a single, unwanted service. If enough of us are frustrated by this practice, we could apply market pressures and possibly explore the viability of a class action lawsuit. Beyond that, though, there are some lessons here that are a tenuously about economic justice.

First of all, Insight is engaging in poor business practices in that they effectively punish people who become loyal customers. Their marketing is targeted only to getting people to switch away from some other provider. Unfortunately, they know that most people do not make changes readily and will continue on with them even in the face of mounting charges on their bills because of the effort it takes to change. The second lesson then is that our reluctance to change is our enemy. We must fight against that lethargy and be willing to reject deals such as these that promise short term savings, but cost more in the long run.

The third lesson is that when a company gets large enough, they no longer have to reckon with the individual customer. They can use their economic clout to make the customers conform and even force billions of dollars in welfare type loans and incentives from the government. This became even more evident when I called to talk to Insight about canceling certain services. I spoke with a person who appeared to be inflexible both by nature and training and who gave me the most ludicrous explanation for the charges. They insisted that they simply put $11.95 down for the long distance charge as a random number and it could have been placed on any other particular item so the cost of the phone service was just $35.00 no matter which way you worked it. Again, $35.00 for phone service is ridiculously costly in this day and time. When possible, go small. Smaller companies have to be responsive to individual customers to thrive.

Tying this personal soapbox back into the theme of justice is pretty easy. Those without resources need to band together to have a voice and to be treated with justice, especially in these economic times of trouble.

Oh, just so you know, I canceled the long distance, canceled cable, plan to go to a VOIP company for phone service and will look at Windstream’s prices for internet.

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13 Responses to Personal Soap Box: Insight Communications, Inc & the “bundling” trap

  1. Pingback: Best Business Practices: Customer loyalty versus switchover marketing « Bluegrass Business Law

  2. Katherine says:

    This is completely not related to your post (which I whole-heartedly agree with BTW) but I just wanted to touch base b/c your email link does not connect on your info page. I am a former CHFS worker-turned attorney and I am really enjoying your blog. If you have time please shoot me an email at siereveldlaw at g mail dot com. I really appreciate it. Thank you.

  3. Dron says:

    Very nice site!

  4. supa says:

    Hey, have read your blogs and they are very inquisitive. I am currently work as a social worker for DCBS and have experienced the ups and downs of working for DCBS. You are obviously an attorney in lexington and have also experienced the ups and downs of DCBS. there is alot of stuff that i agree with in your writing and unfortunately i agree with them and can do little about. THere is a culture built in DCBS that is proliferated throughout the agency. The culture is “cover your ass at all cots” and this basically is at the heart of everything that you have written about. There are many things that i would like to change about it, but alot of times parents are the ones who do need to also partake in the change, and do not. Politics often gets in the way Judges, governors, county attorneys, senators, can make a change, but do not want to be seen as “soft” and are tough on the lower socioeconomic classes. I’m going to end it here. i’ll check back in.

    supa

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  7. Ferinannnd says:

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  8. Floyd says:

    The greed that is business in the US today is the reason the banks are in trouble, and we the taxpayers are bailing them out. GREED. This is why cable companies operate as they do, because they have a territorial monopoly, and local governments are unwilling to do anything to change this money minded, carpet bagging manner of doing business.

    What I as an Insight customer would like to see is a direct competitor. Now Insight will argue that they have competition, in the form of the phone company, and satellite. UNTRUE. The phone, and satellite have much the same way of doing business. Also I would like to know why I cannot get an ala-carte cable choice. You know I pay for what I choose to have on my cable. If I do not want FOX News, I should not have to pay for FOX News, or for that matter any other network on the cable network. Then Insight pushes the more desireable channels further up the food chain, and in order to get just one, you have to buy several others. Like going to the men’s store, buying a suit, and having to buy a pair of pants with three legs. Why?

    Somehow this territorial monolopy has to be broken, and the only way to do so is for the customers collectively demanding better service, and be willing to just give up cable service until either we get a direct competitor, or Insight lowers prices, and gives us an ala-carte line up.

    At the same time Insight does not communicate with us the customers, except to sell you more services, or request you pay your bill. Oh they also communicate with us if they are going to raise your rates. Otherwise silence.

    Bundling, is a trap, a means to squeeze more money out of you. Avoid it at all costs, because one year later your costs will increase.

  9. Pretty interesting post – raises some interesting points for debate. I just stumbled upon your blog this morning and wanted to say that I have really liked browsing some of the posts. Anyways, I’ll be subscribing to your feed and I hope to read more very soon!

  10. Dharma Cat says:

    I have a ‘bundle’ package from Insight. Internet,cable and phone service for a price that keeps going up. The phone bill has voice mail listed on a separate line and cost $3.00 per month. I don’t NEED or WANT voice mail. I have a perfectly good answering machine. Insight will not deduct the charge for voice mail. They explained they can simply turn it off, however I’d still be charged for it. I had to set my phone to go to my answering machine on the 3rd ring, otherwise, Insight voice mail answered it. To hear the message, I’d have to dial a phone number, then enter a pass code number, listen to the messages, delete them, then curse at the cat… But wait, there’s MORE!
    Today, I noticed that a few channels on my cable are gone. They’re dark with the exception of a white scroll indicating I no longer can view that channel unless I call the indicated phone number and purchase a digital receiver. Purchase a digital receiver to watch a shopping channel and the OXYGEN channel? It’s not that those channels are important to me, it’s the fact that it’s one more thing. There’s got to be a better ‘bundle’ from a different company.

  11. Not to mention the fact that Insight clearly has a monopoly in Lexington. It’s not like we can call up Time Warner and then tell Insight where to stick it.

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