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Fees on Every Product Under the Sun

Discussion in 'Issues Around the World' started by ethics, Nov 18, 2002.

  1. ethics

    ethics Pomp-Dumpster Staff Member

    The Washington Post has a story about the proliferation of extra fees tacked on to just about every product or service under the sun. A couple of good insights make it worth the read.

    Tacking extraneous fees onto basic bills used to be confined to a few industries, most notably telephone companies and banks. And even those institutions have outdone themselves in recent times. Charter One Bank used to charge a monthly fee for its debit card. Now it offers the card free, but customers of the bank's free checking accounts had better use it three times a month or they'll get zinged with a $1.50 fee. Think they can dodge that bullet? Free-checking customers are charged $1.50 a month if they decline the debit card and take only an ATM card.

    Meanwhile, for the privilege of paying a credit card bill over the phone, Citigroup charges $9.95. Pay your Washington Gas bill online and you'll pay extra, too; the bigger the bill, the higher the fee. For a $100 bill, the online charge is about $3; for a $200 bill, about $5.50.

    It seems that almost every kind of business has found a way to tack on extra charges -- for almost every kind of service and product imaginable.

    Full story, here
  2. Steve

    Steve Is that it, then?

    A little known consumer recourse is to simply refuse to pay the fee. During face-to-face interactions, or over the phone, simply threaten to take your business elsewhere. They will waive the fee. If paying by regular mail, simply deduct the fee from the amount owed and enclose an explanation. Call their credit department and offer the same explanation. It costs a great deal of money to gain a new customer or gain back a former one. They don't want you to leave.

    It costs far, far more to collect those unclaimed nuisance fees than it does to write them off the books. Write-offs are common and do nothing to damage your credit rating.

    At my previous employer, the threshold was around $8.00 per invoice, regardless of the invoice amount. Some bean counter calculated that it would cost at least that much, on average, to collect the disputed amount and that it was better to just write it off.

    As always, be nice about it...but be firm.
  3. ethics

    ethics Pomp-Dumpster Staff Member

    Stevent, that will work if others in the same industry do not practice and apply the same fees.

    Remember when banks started charging everyone 1.50 for ATM transactions? There was this group of people all over the US who boycotted. Nothing came from it. :(
  4. Steve

    Steve Is that it, then?

    That one's a little different because the fee comes out along with your money; there is never an opportunity to dispute it.

    The approach I recommend does work, even if every other company in the same industry charges the same fee. The major factor, to the business, is the cost of replacing you, as a customer. Even if both parties know you'll pay exactly the same fee at another business, what is important to the business in front of you is that they will lose you as a customer.
  5. ethics

    ethics Pomp-Dumpster Staff Member

    Ok, you've convinced me. I will certainly try it this week. :)
  6. tke711

    tke711 Oink Oink Staff Member

    Even with Banks, Stevent is correct, you can negotiate (read: demand) that the fees be dropped by threatening to take your business elsewhere is many cases.

    My local bank just started charging fees for using ATM machines at other banks. This is on top of the fee that the other bank is already charging me at the time of the transaction.

    I went into my local branch and sat down with the branch manager. I demanded that the fees be waived from my previous and future statements. At first I got the standard "sorry sir, that's our new policy and I can't change it." I coldly said , "fine" and proceeded to ask to close out all of my accounts. The bank manager looked very confused at this points so I told him again that I wanted to close all my accounts out right now and that cashier checks would be fine. I also added that my mortgage and auto loans would be moved as soon as possible. I then told him that it's a shame that his bank is willing to loose long term, loyal customers over a few dollars.

    Well, to make a long story short, the manager was "magically" able to waive the fees for me after that. :)
  7. Steve

    Steve Is that it, then?

    Yep, the financial services people are especially sensitive to this sort of thing.

    Years ago, my insurance company instituted a fee for paying the the six-month premium in six payments rather than all at once. Now, I recognize that there is a small administrative cost associated with doing something like that, and I was willing to pay as much as $2 extra per monthly payment for the ability to keep my own money in my own accounts for as long as possible.

    They wanted $5. I told my agent $2 was all I was willing to pay and that if the insurance company couldn't accomodate me, I'd go find one who would.

    The entire fee was waived.
  8. Sir Joseph

    Sir Joseph Registered User

    That's pretty odd. Not only does my bank not charge, it reimburses me up to $6 a month for any ATM fees I incur.
    (Of course, the bank is over the net so I can't walk into any branch, but then again how often is there a need?)

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