5 Companies That Treat Their Customers Like Crap

Each year there are some companies that are winners and some that are losers for consumers; some that do the right thing, and some that screw over their customers to make a buck.

With this in mind, Consumer Reports publishes its annual “Naughty or Nice” list of companies that had either really good or really bad customer policies over the past year. As CR editor Tod Marks says in a video accompanying this year’s list, “The list is a thumbs up or thumbs down on a specific company policy. To be clear, it’s not that we’re rating the company. We want to underscore some really great – and some not so great – policies.”

Consumer Reports may be criticizing individual policies, not companies at large, but many of the names on the 2012 “naughty” list have consumer problems that go far beyond, say, a confusing return policy. So let’s take a look at some of the companies that made this year’s naughty list, and examine why consumers should be wary of them in general. Though hardly comprehensive, this expanded list can help steer consumers away from some of the more terrible companies and policies out there.

1. Ticketmaster. Charging customers ridiculous fees simply to take possession of the tickets they purchase. Who could that be but Ticketmaster? According to CR, customers can either pay $2.50 to print a ticket from their own computer or $14.50 for expedited shipping. (Otherwise tickets may not arrive by snail mail for 10-14 days – not enough time for many event-goers.)

That policy is absurd, no question. But as anyone who’s gone to even a few concerts or other large events over the past decade or two knows, Ticketmaster’s sins extend far beyond its egregious fees (which also include high “convenience” and “service” fees).

In 2010 the Justice Department gave the OK for Ticketmaster, the nation’s biggest ticket seller, to merge with Live Nation, the world’s biggest concert promoter, creating the mega-company Live Nation Entertainment. As part of the massive $889 million deal, the companies had to agree to take the unusual step of spinning off competing companies so the new entity would not technically be a monopoly. But as many consumer advocates have noted, the deal is still terribly anti-consumer.

Ticketmaster also has a long history of lobbying for anti-scalping laws around the country. The company has its own astroturf group, the Fans First Coalition, which does legislative battle against a group backed by StubHub, the largest legal ticket resale site. While it’s true that the existence of scalpers can ratchet up prices for individual concert-goers, watchdog groups like National Consumers League have ultimately come down on the side of the scalpers on this one, arguing that Ticketmaster’s plan to limit the free trade of tickets would be even worse for consumers.

Ticketmaster’s attempts to play a central role in every aspect of every ticket purchase in America have prompted performers like Louis C.K. to try new models for selling tickets in a fair way. C.K. cut Ticketmaster out of his 39-city U.S. tour earlier this year by selling tickets directly from his Web site. In doing so, he also lobbed a blow at StubHub and individual scalpers, since the tickets could not be resold. His straightforward approach to selling tickets may not work for all artists (despite his popularity, C.K. made less than he would’ve if he’d used the corporate middleman), but it received high praise from his fans.

2. Forever 21. At Forever 21, Consumer Reports again highlights a significant anti-consumer policy: “If you return an online order to a retail location, you can only exchange the item or obtain store credit. If you mail it back, you can get an actual refund,” the publication reports.

Indeed, return policies that seem designed to intentionally confuse customers and/or lead to fewer returns are a problem at Forever 21 and many other retailers. But F21’s return policy is just one reason consumers should be wary of the chain.

F21 is a leader in the so-called “fast fashion” or “disposable fashion” industry, selling heaps of cheap, trendy clothes that often fall apart or are discarded after just a few wears. F21 and its ilk (H&M and Zara are other big ones) offer a constant stream of new styles; rather than offer a few “seasons” of clothes throughout the year like traditional retailers, they get many new pieces in every week. With this constant influx of new clothing and its rock-bottom prices (made possible in large part by sweatshop labor), F21 has helped manufacture a demand for $7 blouses. At that price, you’re not expected to buy just one; you’re expected to buy a new one each week.

Fast fashion is enticing to consumers, for obvious reasons. Who doesn’t occasionally dream of having a closet full of dresses in every color? Fast-fashion peddlers call this the “democratization” of fashion. Fashion for the people!

But in reality the whole premise of fast fashion is a terrible deal for everyone involved: the overseas workers who are paid meager wages and often toil in dangerous conditions; the independent fashion designers whose work is often ripped off; and, to get back to my original point, consumers, who end up spending significant sums of money on clothes designed to fall apart. They end up caught in the fast-fashion hamster wheel of shopping, shopping, shopping, with little obvious incentive to invest in quality, ethically sourced items that will last.

3. Time Warner Cable. Time Warner landed itself on this year’s naughty list by recently announcing a new $3.95 monthly fee for leasing a cable modem. As Consumer Reports notes, “Time Warner joins a list of other Internet biggies to do so, including Cox, Comcast and Bright House. Although Time Warner and other companies allow customers to purchase and install their own modems outright, less tech-savvy folks might be reluctant, assuring the companies a steady stream of extra revenue.”

Beyond that pernicious new fee, there’s a reason Time Warner is a frequentcontenderfor Worst Company in America (as determined by readers of the blog Consumerist). Personal anecdotes suggest that, at least in the New York area, you’d be hard-pressed to find someone who’s satisfied with the company. The company elicits hurled insults from progressives and right-wingers alike; it’s something we can all agree on. Search for the company’s name on Google, and you’ll see that frequently searched terms include “Time Warner monopoly,” “Time Warner scam,” “Time Warner complaints,” and “Time Warner awful.”

Indeed, Time Warner has a monopoly or near-monopoly on cable services in many parts of the region, leading to an environment in which the company has little incentive to be consumer friendly. So – surprise! – it isn’t. It gets away with charging a lot of money (including, as we just discussed, whatever new fees it feels like), while offering service that’s often spotty and providing terrible customer service. There’s nothing to love.

4. Delta Airlines. Delta caught Consumer Reports’ attention for this gem of a “deal”:

When our reporter booked a domestic economy flight (the restricted fares most people choose) via the carrier’s website, Delta offered him the chance to “add convenience and peace of mind.” “Flex this fare for just $737,” the offer shouted, as if you’d be crazy not to jump at the deal. Trouble is, our reporter’s super-saver fare was just $248, so Delta was tripling the price to make it refundable. Gee thanks.

Good one! But that’s not the only raw deal consumers can expect from Delta these days. The Web site Consumer Traveler reports that Delta (along with US Airways) is planning to change its “interline baggage” rules. The site explains that “interlining baggage is when one carrier transfers checked luggage to another for the traveler, thus meaning no need to pick up bags at a connection point and rechecking that luggage with the next carrier. This also may avoid the need to exit and re-enter security.” Starting in January, Delta will no longer transfer your bag if you have a connection – even if the carrier for your connecting flight is a “Skyteam partner.” Kind of a big deal, that, especially since multiple-airline itineraries can often save consumers money.

This comes on top of the already outrageous checked-bag fees, which were once unheard of on major airlines but have now become the industry norm.

Here’s one more thing to be wary of: within the past few years Delta has turned getting bumped from a flight (a passenger’s worst nightmare) into a game. Literally! When checking in, passengers can enter a weird “silent auction,” in which they bid on how much they would accept for getting bumped. You know, like "The Price Is Right." Then Delta can take the lowest bid for screwing its customers by overbooking their flight. Fun for the whole family!

5. Spirit Airlines. It’s no surprise that another company from the airline industry gets the thumbs down. Here’s why this one got called out:

“The company just upped the freight to a maximum of $100 to stow a carry-on in an overhead bin (it’s free if you can stuff it under the seat), depending on whether you declare the carry-on in advance, at the airport, or wait until you’re at the gate. That’s more than you could pay for a checked bag.”

Spirit reportedly gets more customer complaints than any other airline, by a significant margin. In one month this year, Spirit got 8.27 complaints per 100,000 passengers. (United came in a distant second, with 3.5 complaints per 100,000 fliers, while Southwest got a mere 0.2 complaints per 100,000 fliers.)

The airline has gotten bad press for moves like denying a 76-year-old veteran a refund after he learned he was dying of cancer. Other consumer grievances include a made-up-sounding “passenger usage fee,” which is charged to customers who purchase tickets anywhere besides the Spirit ticket counter (who does that anymore?) and for which the airline is being sued for violating anti-racketeering laws.

So happy holidays, consumers, and may 2013 bring us less of the nonsense listed above.