The dangers of experiencing monopolies

15th March 2021   ·   0 Comments

You’re paying your monthly bills. You review your paper bill or your account online. Suddenly, you’re shocked and traumatized. How did your monthly payment jump by 50 percent? What can you do?

If your service provider is a so-called regulated monopoly like Entergy, Cox Communications or New Orleans Sewerage & Water Board, you might spend hours or days trying to get your bill back to its previous cost or one that is more affordable. Maybe you will, maybe you won’t. The reality is you’re in the monopoly danger zone.

A monopoly is a company that controls the majority of the market share of its goods or services, has few to no competitors and its customers have no real choices for the goods or services provided by the business. Without viable competitors, monopolies can charge higher prices, provide inferior products and services and engage in corrupt behavior.

Entergy has no competitor, and AT&T and Verizon are not yet available citywide, so Cox is still the top ISP and holds the biggest market share.

Keeping the lights on and having access to the internet are daily essentials. Consumers who experience price jumps on their Entergy, Cox Communications and S&WB bills, may have to make payment plans or postpone paying other bills. Even with scheduled payments, customers may find themselves playing catch up to mounting costs and debt.

Microsoft, AT&T, Facebook and Amazon are also monopolies.

Monopolies can have a negative impact on both physical and mental health. They can block access to major purchases such as homes and cars, access to credit and financial products, and prohibit wealth building, especially for Black people.

Take the case of VantageScore, a consumer credit-scoring model, created through a joint venture of the three major credit bureaus (Equifax, Experian and TransUnion). It’s fair to say that this is a monopoly.

The danger in having a credit score from these consolidated credit reporting bureaus is that the score you get can determine everything from whether you can get a job to whether you can buy a home and it can affect your mental and physical health.

Having a poor credit or no credit blocks you from getting prime loans and credit (if that makes sense) and leads some people to rely on payday lenders’ predatory loans. According to the Consumer Financial Protection Bureau, even a low end fee of $15 per $100 charged by a payday lender, works out to an annual interest rate of 400 percent.

There are reports that have concluded that Blacks and others, including elderly people, are denied access to financial products, no matter their creditworthiness. In other words, discrimination in lending is still a thing, as is discrimination in credit scoring and redlining.

Monopolies are dangerous for those on the lower end of the economic scale and even more so for people who are at or below the poverty level.

Monopolies are illegal, yet there is little enforcement of the Sherman Anti-Trust Act. There are laws against predatory lending and redlining, but, again, they are not being enforced.

Nonetheless, sticker shock bills, discriminatory credit scores and denial of essential services for people who can’t afford them is unacceptable.

So, what can we as consumers do about the excessive costs the monopolies are forcing us to pay and discrimination in monopolistic credit scoring and lending that keeps us from earning the American Dream?

We can fight back. We can make calls from the bottom to the top of the corporate hierarchy, from the local and regional personnel, the live online customer service representative and the corporate office.

We can write and send official complaints to corporate board members and regulatory officials, in the case of Entergy, Cox and Sewerage and Water Board, the City Councilmembers on the Council’s Utility, Cable, Telecommunications and Technology Committee. We can also make official complaints to the Better Business Bureau and the Consumer Financial Bureau.

To get the monopolies to be equitable and fair in pricing is action. To do nothing is to continue to be a victim.

This article originally published in the March 15, 2021 print edition of The Louisiana Weekly newspaper.