Did you know that if you’re not having your telecom invoices audited, you could be forfeiting 10% or more of your network services spend? Over a decade ago Gartner Group, Inc. the world’s leading information technology research and advisory company, estimated 10% of IT service spend is unnecessary. As telecom services have become more complex, this percentage is sure to have increased. Our work in telecom expense audits over the past decade supports that assumption.
As rates for services decrease, carriers have been quietly tacking on surcharges and fees. These fees can amount to 25% and more, in addition to the taxes and fees the government requires you pay. It can be difficult to determine what a fee is for and which ones you are required to pay. The description of fees on invoices can be misleading. Since they fall “below the line,” they appear to be just another one of the many regulatory surcharges and taxes that organizations are required by law to pay. But they’re not.
Many of these are not government-mandated fees. They’re invented by the carriers to generate revenue and increase profits without having to raise rates. Here are a few blatant examples:
- Over a decade ago, AT&T created their Administrative Expense Fee (“AEF”). More recently, AT&T increased this rate by 50%.
- Another Big Three carrier has gone one step further. Their Subscriber Line Charge, which almost all carriers charge, is $2.45 per line per month. By comparison, AT&T charges less than 27 cents per line per month.
- One health system client changed carriers and found their bill jumped up by $4,000 per month – just in this one fee alone.
Carriers are counting on organizations to look at rate comparisons when they’re shopping for services. But rate comparisons often don’t give a true picture of what you will ultimately pay. When comparing all carrier-specific charges, methods and procedures as well as rates, the bidder with the lowest rate may not look as attractive.
Often when organizations try to question these fees, frontline reps dismiss the concern. This may be because they don’t have the knowledge to accurately inform the customer. Carriers justify these fees by saying that they’re “customary” charges. They might even lead you to believe that these fees fall within industry standards – whether they do or not.
Regardless of what the carriers say, some fees can and should be challenged.
Getting these charges reduced or waived requires someone who has the expertise and skills to research regulatory and administrative fees, and who knows the industry inside and out.
As you probably know all too well, carriers do not easily part with sources of revenue. But when they’re substantially challenged by someone who has expertise in their contracts and regulatory standards, they’re more likely to relent.
Organizations like yours should not have to pay out thousands of dollars simply to line the pockets of telecom carriers. Overcharge Recovery Group can help you identify what you’re paying in those fees, negotiate with your carriers, and, in some cases, recover overpayments for you. At the very least you can use this information for leverage during contract negotiations.