Friday, May 14, 2010

The art of price gouging; the Optus way

A friend of mine responded to an advertisement for a $39 plane ticket between Adelaide and Melbourne. Booking two return tickets, she was surprised to find that the total amount came up to $200, instead of the expected $160 or so. Welcome to Australia, where price gouging is a common practice.

In July last year, Telstra implemented a $2.20 charge on customers who pay the phone bill over the counter. After much public hue and cry, Telstra unilaterally withdrew this charge in November. Telstra's competitor Optus is more surreptitious; recently it quietly imposed a $0.55 fee for the same reason but through the "back door" way. If you pay an Optus bill over the counter, a $0.55 charge will appear somewhere in your next bill. Since most people do not scrutinize the details in their bill, they will just pay the next bill again without realizing they have been price-gouged. Not a single mention of this has been made in the papers. The public has either been completely fooled or completely made a fool of. Now that this is working fine, Optus has already announced that it is increasing this charge to $1.30. Before long, you will find many other companies using the Optus way to gouge you.

(A gouge is a chisel-like tool used to shave small amounts of wood, such as when used to make a shallow depression. Price gouging probably derives its meaning from this word. Currently a class action suit is brought against the 4 major banks in Australia for unlawfully charging bank customers for all kinds of reasons. Price gouging will continue to pop up now and then unless legislations are effective enough to stop it.)

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