How Marriott and AT&T Use Technology To Steal From Their Customers

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(This post originally appeared on Forbes)

I like to write about the latest tools and technologies that can help business owners like myself do things quicker and better. But sometimes I come across stories about how technology is used for the wrong reasons. And unfortunately this past week two stories emerged featuring two large, well-known and well-respected American companies that did just that. One was fined by the FCC. Another settled and has to pay millions.  Both effectively stole from their customers.

Hotel chain Marriott International was fined $600,000 by the Federal Communications Commission for illegally deploying “jamming” technology to force their guests and conference-goers to use the in-house Wi-Fi at its Opryland Hotel in Nashville. You’ve been in this situation before, right? You want to get online at a conference but the hotel’s service at the conference facility is so exorbitantly priced ($250-$1,000 at the Gaylord Opryland for example) that you just use your phone’s data connection as a hotspot for yourself and your group, effectively circumventing the hotel’s Wi-Fi service. But not at the Gaylord Opryland! Apparently (and not allegedly, because this is fact according to the FCC) the hotel’s employees used jamming tools (I’m guessing something like wifijammer or wifikill, or any other of the vast array of apps available to the high-school-level-hacker) to stop their guests and conference-goers from using an outside connection.

Marriott issued a statement saying “Like many other institutions and companies in a wide variety of industries, including hospitals and universities, the Gaylord Opryland protected its Wi-Fi network by using FCC-authorized equipment provided by well-known, reputable manufacturers. We believe that the Opryland’s actions were lawful. We will continue to encourage the FCC to pursue a rule making in order to eliminate the ongoing confusion resulting from today’s action and to assess the merits of its underlying policy.” Protected? As a loyal Marriott Rewards Member and admirer of the chain, I’m trying my best to be sympathetic. But I’m finding it difficult. This practice will probably come as no surprise to frequent conference-goers (like me) at the Gaylord Opryland who have to endure poor internet signals throughout the hotel along with the flagrantly overpriced amounts the hotel charges for food and beverages to its captive guests.

Marriott should be ashamed of themselves. And so should AT&T.

That’s because this same week we found that AT&T Mobility was ordered by the Federal Trade Commission to pay $105 million back to its customers that were victims of a practice known in the industry as “mobile cramming.” In its complaint against AT&T, the FTC “alleges that AT&T billed its customers for hundreds of millions of dollars in charges originated by other companies, usually in amounts of $9.99 per month, for subscriptions for ringtones and text messages containing love tips, horoscopes, and “fun facts.” In its complaint, the FTC alleges that AT&T kept at least 35 percent of the charges it imposed on its customers.”

Unlike Marriott, AT&T wasn’t fined.  But they settled.  And responded as follows: “While we had rigorous protections in place to guard consumers against unauthorized billing from these companies, last year we discontinued third-party billing for Premium Short Messaging services. Today, we reached a broad settlement to resolve claims that some of our wireless customers were billed for charges from third-parties that the customers did not authorize. This settlement gives our customers who believe they were wrongfully billed for PSMS services the ability to get a refund.” Beleaguered customers of AT&T (and other mobile carriers) are tired and confused by the complicated statements we receive every month and, let’s admit it, we’re not really sure about all those fees.  But hey…they’re generated by advanced software billing systems so it must be fine, right? Thank goodness someone was paying attention enough to raise the alarm to the FTC.

So what’s the lesson here? Actually there are two.

Good technology doesn’t replace common sense. It’s easy for companies to blame their questionable practices with technology. Your phone’s always-reliable data connection stops working in a place that charges for Wi-Fi? A computer-generated invoice has dubious charges? Don’t let an employee shrug her shoulders and tell you “that’s what the computer says.” Computers can be wrong. They’re (at least for the time being) controlled by humans. Ask. Push. Yell. I’m going to bet that your common sense is more on target (or at least more honest) than a software application developed in-house by some IT guy at hotel or mobile service company.

Large companies are not above stealing from their customers. I hope that Marriott, as a company, would never condone such actions and that the general manager of the Gaylord Opryland was fired as a result of this incident (I also hope the company will install better Wi-Fi throughout that resort and consider lowering its prices for a glass of the house white, but I won’t hold my breath). I hope that AT&T, as a company, would also never condone over-billing its customers and whoever was behind the erroneous billing at AT&T Mobility also lost his or her job. But I’m not holding my breath here either.

That’s because both large and small companies will always seek to use technology to improve productivity and increase their profits even if in some cases it’s at the expense of their customers. Just spend an hour perusing through the archives at Consumeristand you’ll see plenty of examples. As customers we have to be awake, question, complain and fight.  And as business owners we must never hide a questionable practice behind technology.  We don’t have the legal resources of a Marriott or AT&T.

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