MONEY | 10 Ways to Cut Cable Bills (Updated Feb. 14, 2016)

Lieber doesn't suggest this one. I do. Also land lines.

Feb. 7, 2016–Right after his fine story on pesky recurring credit card charges, Ron Lieber has another good article in the NY Times yesterday on how to pay less for your cable service, internet, phone, alarm system or other utility.

He sat in on BillFixer agents who lower your monthly bill in return for keeping half the savings for a year.

(This business model is not actually so new. It was used by a New York City company 20 years ago that lowered my phone bill. It is also used by companies that promise to get you a cut in your property tax.)

Since good information can save you money, I will summarize the tips that Lieber picked up in his investigation, along with what I learned from the 40 comments on Lieber's article that I plowed through.

First, I should say that Lieber has a question about the ethics of BillFixer's claiming to be the customer when they are only an agent. This does seem to be illegal, long part of agency law.

However, commenters don't think it is unethical given the refusal of companies to talk with anyone but the customer and the unwillingness of cable-phone companies to communicate their prices in a transparent way. (I have asked for a list of discounts, for example, and I was told that this is internal information only available online to company agents.) Several commenters on Lieber's article argued that in their view cable companies don't treat their customers fairly or ethically, so they don't have "clean hands". The Roman Catholic moral theology that I learned has a special dispensation for untruths that don't qualify as lies, because the questioner has forfeited the right to the truth...

In any case, the following tips bypass the ethics/legality issue of agents claiming they are someone they are not, because you, the consumer, are urged to use them for yourself if you have the time. I have added a few extra tips along the way to the ones that Lieber provides. The last tip is my own.

1. Try coming in as a Leaver. The “Cancel My Service” option on a phone tree may be the best place to start, because the best deals may be reserved for the staffers at the cable company who are responsible for trying to keep customers (they are called retention specialists). It costs a bundle to get a customer–they don't want you to leave without giving you a fine offer.
2. Be nice. The cable company call center gets some abusive customers. You may feel that they deserve it. But the agents just work there. They have the authority to give you deals that they might not feel like giving to people who make them feel bad. They might also do some mean things to you. It has happened.
3. Be prepared. Two ways to prepare: (1) Get information on what other companies are offering. (2) Ask your employer, former employer (if you are retired; see below) or union (or employee association) if there is a discount available for employees. Did you know that government employees or retirees get a 17 percent discount from AT&T? When I first heard about this I was astounded. It applies to Federal, state or local employees, and retirees.
4. Fish around. Sometimes the deal may be a free service or an upgrade on service status. 
5. Ask for a new-customer discount. With new plans every month, you are.
6. Ask for a credit. Often a customer-service agent can just hand out a one-time credit; it has happened to me. Chatter on about a lot of unexpected bills, the needs of your children or parents, or whatever; better if it's true, which it probably is. The agent may decide to give you the credit based on considerations that have nothing to do with what you are saying, like getting on with other business.
7. If you are a retiree, say so. Two reasons: (1) It means you probably have allowed ample time for this business. When they ask if you want to be put on hold, say "No problem, I'm in no hurry. This is important to me." (2) Be aware that corporate and government discounts usually continue for retirees. Just bring in or fax or email proof–such as a pension payment showing source.
8. Be cautious about a proposed new plan. Does a reduced fee require a new contract? Commitment? Minimum period? Be on orange or red alert.
9. Write down the details. Then call back. Confirm you got what you were promised. You may have not been fully informed about your deal.
10. Cut the cord. Do you really need cable TV? Do you really need a land line? "Cut the cord" usually means cutting out cable TV and telephones. Of course most of us still need an Internet connection and this is ultimately delivered on a phone line (DSL) or a cable-company (FIOS or wire-cable line). My wife Alice and I watch our favorite shows via the Internet–Netflix or whatever, and friends send us links to free classic movies on YouTube etc. Most young people we know don't bother with a land line, because their iPhone is with them wherever they go. Increasingly we are relying for phone service on the iPhone.

CREDIT CARD | Curb Recurring Charges! (Updated Feb. 14, 2016)

Squeezing dollars from customers at fitness centers.

The New York Times has a good story on recurring credit charges by Ron Lieber. (He has another good one on how to save money on cable-phone-alarm charges.)

He describes a new free service called Trim that checks for and gets rid of charges for services you don't need or want.

The top three offenders, according to Trim, are:

#1 and #3: Experian and TransUnion, which charge you a monthly fee for "credit monitoring"–i.e., providing a credit score (FICO or other report) that you can get free from some credit card companies or from annualcreditreport.com.

#2: Planet Fitness, which requires a registered letter to cancel your monthly fitness center charges. This is a more serious problem than the credit score charges because the monthly charges are much higher. The YMCA and a fitness club in LA are also on the list of offenders. NY Sports Club has had the same requirement as Planet Fitness. The way it worked for me at NY Sports Club, I went in to the local branch where I had signed up many years before, to cancel my membership. They didn't tell me what I needed to know, which is that it can only be cancelled by a registered letter to a headquarters address. In fact the branch membership officer called in two other people so they could hear how she handled the request to cancel. Instead of telling me how to cancel, they offered to reduce the monthly amount to avoid a re-signup fee. But, again, they didn't say that this reduced amount is only good for three months, and they went back to billing me for the full amount every month. It's just a scam to collect fees from resigning members long after they have moved on from the club.

I wrote to the New York City Public Advocate to suggest a law that you should be able to cancel a membership the same way you sign up, but never heard back. If the local branch of a fitness club can sign you up on the spot, you should be able to cancel on the spot at the same place. Maybe this should be a NY State or even a Federal law. It's common sense.

Meanwhile, when you see a clause like that on any membership signup agreement, just walk away. If they have scam built into their membership form, you can imagine how many other ways they will be trying the squeeze revenue out of you.

MONEY | "Annuity-Peddling Scoundrels"

Retirement Assets. For sources and explanations of data,
go to the Investment Company Institute Fact Book,
http://www.ici.org/pdf/2012_factbook.pdf.

Yesterday I posted something on "Annuities: Caveat Emptor".

This morning, January 19, on the first page of The New York Times Business Section, I read Ron Lieber ("Your Money") on "Finding Advice for More Modest Retirement Investments". He makes a significant off-hand reference to "annuity-peddling scoundrels".

So I am re-posting some of what I said yesterday, expanded (and modified) in light of Lieber's  comment and some data that he references. The chart above shows tax-advantaged non-annuity retirement assets, as of the third quarter of 2012.

The Direct Benefit and Government plans are mostly safe from predatory annuitization because they are already paid out in that form and it is often not easy to take out the money in a lump sum.

But I worry that some people who own a piece of the $5.3 trillion of IRA assets or $5.0 trillion of Direct Contribution plans (401k, 403b, 457 etc.) might be persuaded to convert their assets to an annuity.

Pension industry posts suggest that annuities are seen by some as a new gold mine for people in the insurance industry. One writer suggests that annuities are a great opportunity to expand one's income. The writer is referring to the income of sellers of insurance products.

The arguments advanced for why consumers should buy annuities are:
- stability
- safety
- diversification

In principle, economists like annuities because in theory they best match the need for people to have income until they die with a product that does it. Even President Obama is quoted as favoring annuities in a retirement strategy.

So yes, in some situations an annuity might make sense: (1) Liquid assets that are not tax-protected. (2) Severance payments. An annuity might be a good way to make sure the money lasts as long as you do.

But if the prospects that are being pursued by annuity sellers are largely in tax-advantaged investments, they  need to be very careful or they will be giving away a big piece of their retirement assets by buying annuities:
- Their risks go up because they are giving up control of their money. If there is a sudden need for capital, all they are getting is the regular return. This is a huge loss of access. This is inherently desirable only when the annuity is being sold to someone who cannot make financial decisions rationally and for whom the capital is tempting to spend.
- Insurance companies love annuities because they get to invest the money - so they pay their agents well to sell them. I have heard as much as 12 percent of the purchase price can go to the agent. Someone is going to pay for this, namely buyers in the returns they get.
- In the current interest-rate climate interest rates are bound to be on the conservative side. We have had a zero-bound environment for four years. Who says this environment is going to change soon? (I have said elsewhere that we are in a zero-bound purgatory that will last until we figure out why we are in it and why it is not heaven. No sign we are there yet.)

So if what you have is a 401k or an IRA, it is crazy to roll them over into an annuity. Far better to maintain control of them and when you get to be 70.5 years old, take the Minimum Required Distribution every year. For no fee, just the cost of the transaction, with no 12% load, the mutual fund or broker will figure out the MRD and pay it out like an annuity. Yet you still have control of the underlying assets and in an emergency you have access to them. You also don't pay taxes on the income until you take it out.

Maybe I am just imagining a problem that doesn't exist. Maybe none of the 8.7 percent of retirement assets that are in annuities were rolled over from tax-advantaged retirement assets. But given the temptation and what we saw happen in the mortgage industry, I fear the worst and would love to see data that would either confirm or contradict my concern. The Investment Company Institute does not show on p. 122 of its 2012 Fact Book.the value of IRA accounts that were totally withdrawn. I would like to know that number.

In my view, agents who sell an annuity to someone to be paid for by selling a tax-advantaged retirement asset should have their license taken away.