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I'll quote the same thing I posted on Slashdot in response to another comment: I'm under the impression that most of this stuff is a complete racket though. Su
by LogicHoleFlaw 17y ago
I'll quote the same thing I posted on Slashdot in response to another comment:
I'm under the impression that most of this stuff is a complete racket though. Sure, Sprint can put several thousand dollars on your bill in one month because you used your data plan in Canada or something. But did that actually cost Sprint very much? If not, who cares if you cannot pay the bill? As long as you can at least pay enough to cover Sprint's costs, it shouldn't be a big deal for them if you simply owe them a lot of money.
Actually, it does cost Sprint money. If a credit card charge is declined the card issuer charges Sprint a fee. Failed billing is a huge issue for telecommunications companies.
I wrote billing software for a large telecommunications company and dealt directly with this issue. Something like 40% of all attempted credit card charges were declined for one reason or another. That is a lot of money lost to no good end.
I personally and single-handedly implemented the system which would attempt to authorize (not withdraw) one month's worth of billing from new credit card signups. It is amazing how many people hit their credit limit when you check to see if $45 is there. And even then a large number of those who pass that check will fail to pay their bill when you attempt to charge.
Asking for (and storing! WTF) SSNs to sign up for a service contract is heinous, I agree. But there is a lot of money lost to attempting to charge the credit cards of people who then fail to pay their bills.
- thras 17y agoThe number of failed credit card authorizations each month sounds like a useful economic indicator. There might be quants on Wall Street that could do something interesting with that sort of data.
- chrisbolt 17y agoThe fee is insignificant compared to the cost of the bill, or the cost of a chargeback if a card holder disputes a charge.