The 2008 Customer Service Hall of Shame

By Karen Aho

The economy's in the tank. Corporate profits are down. Business owners are having just as hard a time getting loans as wannabe homeowners.

So you'd think that businesses would be treating their patrons like royalty, right? That this would be exactly the right time for businesses to coddle their customers?

Wrong. When the economic going gets tough, some companies apparently get tough-minded about customer service, squeezing out the last dime of profit by cutting back on critical customer-facing positions such as phone personnel.

• Update: 2009's Hall of Shame

"We've seen a fall in customer service as we've gone into a recession," said Richard D. Hanks, the president of Mindshare Technologies, a customer-service consulting company. "As the cost cutting occurs . . . they start to cut the wrong things."

That reality is borne out in the results of MSN Money's second annual Customer Service Hall of Shame, a ranking of companies with the worst customer service, based on a nationwide survey commissioned by MSN Money and conducted by Zogby International. The scores for our Hall of Shame companies are, on average, down from a year ago.

And the 'winner' is . . .

The company at the bottom of the customer-service heap is Time Warner's AOL. A remarkable 47% of people who had an opinion of AOL's customer service said it was "poor." Analysts said that rating may have something to do with its effort to transition from an Internet service provider -- where it still has more than 9.3 million paying subscribers -- to an ad-supported Web portal.

"I don't know what to attribute that to," AOL spokeswoman Dori Salcido said. "I just do know that we continue to improve customer service."

AOL fits squarely in the category of company that dominates our list: communications companies and banks that provide complex and at times highly technical products. Tens of millions of customers rely on those products almost hourly. And, should something go wrong, those customers get anxious and demand a fix -- now.

That's still no excuse, analysts say. In their zest for quarterly profits, these companies tend to favor acquisitions over beefed-up service staffs. They also lean toward confusing fees over straightforward price increases -- strategies that don't play well for the long haul.

"Most of these companies actually aren't thriving," said Michael Shames, the executive director of the Utility Consumers' Action Network, a California nonprofit that monitors business practices. People don't look at companies with poor customer-service scores and say, "Here's where I should invest," he said.

For the survey, conducted online in March, Zogby asked more than 7,000 people across the country to rate their customer experiences with 140 leading companies in 14 industries, including airlines, hotels, insurance companies and big-box stores such as Wal-Mart. Respondents could answer "excellent," "good," "fair," "poor," "not familiar" or "not sure."

The companies in the Hall of Shame were ranked by the percentage of people familiar with a company who answered "poor."

Although AOL didn't get ranked last year, corporate sibling Time Warner Cable did, and it made the top 10 then and now, receiving a 29% and 31% "poor" response, respectively. Time Warner Cable was one of four companies -- along with Comcast, Sprint Nextel and Bank of America -- to make a repeat showing.

The Hall of Shame

1. AOL's response. Post your experiences here.

2. Comcast's response. Post your experiences here.

3. Sprint Nextel's response. Post your experiences here.

4. Abercrombie & Fitch's response. Post your experiences here.

5. Qwest's response. Post your experiences here.

6. Capital One's response. Post your experiences here.

7. Bank of America's response. Post your experiences here.

8. Time Warner Cable's response. Post your experiences here.

9. HSBC Finance's response. Post your experiences here.

10. Cox Communications' response. Post your experiences here.

Click here to see the full list of companies.

Continued: Size often a culprit

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