Company adds surprise fee to lifetime agreement
A lifetime agreement should last for, well, a lifetime. At least that’s what Rick Wallace thought when he paid about $180 several years ago for a lifetime subscription to a traffic-information service.
The Seattle company, TrafficGauge Inc., offers hand-held devices that provide real-time data on traffic conditions for one of four metropolitan areas: Los Angeles, San Francisco, Seattle and Chicago.
“This is the easiest way to receive traffic information in your car where you need it most,” the company’s website boasts. “It is always on and automatically updates so it is always showing current traffic conditions.”
Rancho Palos Verdes resident Wallace, 53, bought his TrafficGauge unit at Costco in 2006 for about $60. At first he paid for only six months of service at a time.
In 2007, he decided the gadget was handy enough that it was worth spending $179.64 for a lifetime subscription.
“It’s better than having to call up data on a smart phone,” Wallace told me. “It’s always connected and easy to use.”
A number of customer reviews online echo that sentiment. “I received my TrafficGauge as a present about six months ago,” one user says on Amazon.com. “At the time, I was living in L.A. County and commuting to work every day in Orange County. This handy little device saved me TONS of time.”
So imagine Wallace’s surprise when he received an e-mail recently from TrafficGauge informing him that his $180 lifetime subscription would now be accompanied by a $9.95 “annual network access fee.”
“Remember pagers?” the company asked in its e-mail. “Essentially your TrafficGauge is a fancy pager except instead of displaying phone numbers or text it shows traffic.
“We pay a fee to broadcast the traffic information to your device over a pager network owned and operated by a third party. This fee pays for that broadcast.”
The e-mail said Wallace and other lifetime members could access TrafficGauge’s data via smart phones for no additional charge, although this would effectively make obsolete the always-on device that was the company’s selling point in the first place.
Wallace, an accountant, said TrafficGauge was clearly reneging on a deal.
“For me, a lifetime means a lifetime,” he said. “They’re changing the deal three years into a contract.”
The Better Business Bureau gives TrafficGauge a grade of F. The agency says it “requested basic information from this company but has not received a response.”
No one at TrafficGauge returned my repeated calls and e-mails.
In its e-mail to customers, the company explained that it has “the right to modify the technology used to deliver this service,” and that “we must cover the rising cost of this older technology.”
“Moving forward,” it said, “the no-cost path is your mobile phone.”
That’s a fine how-do-you-do for anyone who’s already ponied up nearly $250 for a TrafficGauge device and lifetime service. No refunds are being offered.
And if you don’t pay the extra fee, apparently your lifetime service will come to an abrupt end. “You must sign up for this charge if you wish to continue to receive service to your Handheld TrafficGauge Mobile Traffic Map,” the company warned.
TrafficGauge no longer offers lifetime subscriptions. Customers who buy the handheld devices now must pay $9.99 per month, $47.94 for six months, $83.88 for a year or $143.76 for two years of service.
Basically, TrafficGauge is telling lifetime subscribers that changes in wireless technology have overtaken the company’s original business model, and that it can no longer make as much money as it intended.
But instead of swallowing the loss, TrafficGauge is rewriting the terms of its agreement, tacking on an annual fee that lifetime customers naturally assumed they’d be avoiding by agreeing to a long-term relationship.
I’ll leave it to TrafficGauge customers (and their lawyers) to decide what should happen next. But I do know this: A deal is a deal.
Yes, consumers should be wary of any company that promises a lifetime of service for a fixed price. But companies also should be accountable any time they make such an offer.
And they should at least have the courage to defend their actions, rather than ducking requests for additional information.
Wallace told me he sent an e-mail to TrafficGauge complaining about the subscription switcheroo. “So far,” he said, “they haven’t responded.”
Unhappy regulators
Speaking of reticence, no one at the California Public Utilities Commission got back to me when I wrote last week about a state Senate report on how consumers have gotten short shrift since the telephone market was deregulated in 2006.
This week, the commission issued a response.
State regulators say they’re miffed that Senate investigators don’t think they’re doing a good job of safeguarding consumers from runaway phone rates.
“I am disappointed that the report focuses on only a few parts of the CPUC’s efforts to protect and help consumers instead of recognizing all of our efforts, which are substantial and only getting better,” declared Paul Clanon, executive director of the agency.
He said the report “chooses to zero in on large rate increases for add-on services that not everyone buys, such as unlisted numbers,” rather than citing lower costs for basic phone service, when the costs are adjusted for inflation.
As I observed in my column, those large rate increases include AT&T jacking up its fee for an unlisted number by more than 600% and its charges for call waiting and call forwarding by about 86%.
“Protecting the interests of consumers is what we do, and we do it well and thoughtfully,” Clanon said. “We are constantly improving and refining our internal processes to give consumers the best care and assistance possible.”
All appearances to the contrary notwithstanding.
David Lazarus’ column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5. Send your tips or feedback to david.lazarus@latimes.com.
