Charter Communications, which was ranked worst telephone, internet, and television service provider by Consumer Reports, has come up with the perfect scam. The sad thing is, people are falling for it!

Last week, the company kicked off an auction where one unlucky person will win “Charter High-Speed Internet for Life”. There are a few catches with this scam. First, you must reside in an area serviced by Charter Communications. Makes sense, but this leads to the second catch: the free service is not transferable. If you move or no longer have the ability to receive Charter’s services, you’re out of luck until your town gets Charter or you move back into their service area. In this day and age, people move around and your chances of living in a town that puts up with Charter is probably quite slim.

One good thing is the company will give you the highest level of Internet service available in the market you’re living in. For many people, this means 10MB (or faster) service now, and who knows how fast it will get in the future.

My beef is really with the people bidding on this scam. To see just how gullible some people are, check out this list of bids. As of right now, the high bid is $23,852. Seems a bit high for lifetime Internet access, especially when technology evolves so quickly. Look back just 15 years… people were to have dial-up Internet access and the Mosaic web browser was just about to be released. How much would you have paid then for Internet access for life? What will we have 10 years from now for Internet access?

Ok, back to these bidders. Let’s assume the high bidder is 25 years old (because honestly, what 25 year old doesn’t have $24k lying around?). Let’s also assume that this 25 year old is healthy and will be surfing the web until they’re 85. So they are paying $23,852 for 60 years of internet access… which is $397.53 per year or $33.13 a month (Charter’s current promotional rate for 10MB service is $24.99 a month - see the issue so far?). Over the 60 years, the high bidder would have earned an average of $19.94 per month in Interest (at 2% compounded annually), which raises the true monthly cost to $53.07… seems like a rip off to me! If the $23,852 is left in a savings account, monthly interest earnings would be over $39 a month. Heck, why not put it in a money market account or buy a CD and put it to good use versus donating it to Charter?

Now if the high bidder is really dumb, they’ll put this winning bid on their credit card and throw even more money out the window!

This entry was posted on Tuesday, March 18th, 2008 at 9:59 am and is filed under Stupid Things. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.