Add-Ons Add Up 401
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.
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Add-Ons Add Up
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Software production is assumed to be a line function, but it is run like a staff function. -- Paul Licker
Car-rental extras... (Score:5, Informative)
- extra local taxes
- the hard-sell "collision damage waiver,"
- the charge for an extra driver
- the ever-popular "refueling charge" should you not fill up the tank.
- At the San Francisco airport a $12 surcharge helps pay for the car-rental shuttle bus
- a state-mandated $10 at Boston's Logan Airport helps fund the city's new convention center
- last month, also in Boston, Dollar Rent a Car slapped on a $1.84 daily "peak-season" fee
I am renting a car in the near future, where they also threw on a "Premium Station Surcharge" for picking the car up from the airport instead of a local station. That comes to around 20USD. Plus, often, you have limited kilometres, so you had better count on adding on a few dollars if you go too far....be careful out there - it's a dark world (Score:5, Informative)
When I returned it, they charged me 110 dollar *per*day* of "under age fee" because I am under 25. AND they taxed the fscking fee (at the same 17-18% rate which I have no idea where comes from)! is that funny, eh? considering in CA AVIS charges like 10-15 dollars for the same underage deal, I can just smell "bullshit."
If I didn't check the reciept, they'd probabbly just let it slip (I think if you don't file a complaint right away or some such, you waive your rights after a certain time). Eventually it got sorted out and such, but still it took a several phone calls, placed on hold, explanations, transfered, re-explanations, the whole works.
Point is, be careful out there, guys (and gals) - companies will rape you when they have the chance, so check your bills and add things up. And yeah - renting from AVIS in LGA is not a good idea.
UK seems a little better. (Score:2, Informative)
Re:Vancouver Airport (Score:2, Informative)
Re:Per Transaction Fees Suck... (Score:3, Informative)
If they don't like the extra 3%, then the ought to pay using a debit card.
If they like federal fraud protection and some remote resemblence of accountability from the financial institution they should avoid debit cards like the plauge.
There is always two sides to any issue. I use my credit card like a debit card, simply because I don't like being liable for a several thousand dollar piece of plastic.
Re:Per Transaction Fees Suck... (Score:5, Informative)
*chuckle* Debit cards charge a higher fee, closer to 5%, if memory serves. Many retailers would rather not accept debit cards, but at the moment, Visa and MasterCard are demanding that if a store accepts their credit cards, it must accept their debit cards, too. There is currently a class action lawsuit going on (or there was, last time I heard) to settle whether or not this is illegal bundling of services. If the retailers are victorious, debit cards will no longer be accepted at many places, and Visa and MasterCard will likely go bankrupt as well because of the massive damages that the retailers are claiming (won't affect you as a cardholder, the debtors will just take over and it'll be business as usual).
Happened to me... (Score:5, Informative)
I got my first credit card so I could get an Internet account. The interest on it was outrageous so I paid it off monthly.
This went on for years until one morning I discovered my car had been stolen. Fearing that there might have been some old mail in the glove compartment, I got all of my cards(including other cards at better interest rates) cancelled, reported as stolen, and reissued with a different number.
While calling people who charged my first credit card monthly(three accounts and a few online services) I accidentally gave them the number of one of my newer cards. I didn't bother making the necessary corrections because it didn't matter to me.
A week later, the issuer of the first card sent a replacement but left the expiration date the same which was two months away. I put it away and ignored it.
The date of expiration on the card came and went and I got nothing. Not having any outstanding balance and not receiving any mention from the issuer I assumed they had dropped me.
Two years later, I get a monthly statement from these guys. Surprised, I look at it and it's several dollars for maintenance. It seems that they assumed I still had a valid card and since I did not use it they were going to charge me for the honor of not using it(a new policy it seems).
Politely, I explained that they never issued me an updated card, their interest rates were too high, they could cancel my card, and I wasn't paying the fee. Worked like a charm.
On a side note: for the few who read this, it *really* pays to call your credit card issuer, act dumb, and ask them why their interest rates are so high(even if they aren't).
Tell them about all the mail you get about other issuers promising lower interest rates(you get those all the time, remember those numbers).
Tell them about how those cards are offering to transfer your balance for *free*.
Explain that you like to do business with them but those offers are tempting and, "Is there anything you can do?"
Although I have relatively good credit(I think) I have heard from others that this will work even if you are really bad. The worse thing that can happen is they say no and you can brush it off with an "OK, just checking" attitude.
Try it. It *REALLY* works!
I blame myself... (Score:4, Informative)
As the article says, the fees that are shown separately as fees are done so very intentionally...You don't see anywhere on your wireless bills your share of the $415,000 in PAC campaign contributions that SBC made [citizen.org] in 2002 alone. Or, the $548,000 that AT&T made.
Or, conversely, that they receive millions in 'corporate welfare' every year in the forms of subsidies and tax breaks that don't translate into lower prices, but....You guessed it:
Higher profits!
Point by Point (Score:5, Informative)
Yet, do they charge less for customers who use less than average? I think not.
Sprint decided to charge some of its PCS wireless customers -- primarily those with poor credit ratings who were on a special price plan -- $3 when they wanted to speak to a customer-service representative.
The less money you have, the more expensive everything is for you. The more expensive everything is for you, the less money you have. Now even insurance companies charge you more if you have less-than-perfect credit. Cell phone companies charge you more. Land utility companies charge you more. I've even seen surcharges on Apartments, Hotels, and Rental Cars for less-than-perfect credit.
a state-mandated $10 at Boston's Logan Airport helps fund the city's new convention center
This is a privately levied tax! Amazing! Basically, a for-profit piublicly run private venture (convention centers are all for-profit, and have nothing to do with the public good, hence they are private) taxing people who don't even have the right to vote in that area.
Dollar Rent a Car slapped on a $1.84 daily "peak-season" fee -- "leaf-peeping season," you know.
Why don't they use their GPS tracking to detect when renters drive the cars on popular leaf-peeping routes and charge the fee that way? It'd be like being able to put a private virtual toll anywhere! They already do this to detect when customers leave the "allowed" area, and charge them heftily if they do...
Meanwhile, for the privilege of paying a credit card bill over the phone, Citigroup charges $9.95.
How can it possibly be legal to charge someone for paying their debt to you?! Oh wait, it's free if they mail in a check, so the creditor can hold onto it until it's late, then charge more fees... You're basically paying for the proof that you paid on time.
It has launched a preferred-guest program that,.... to any customer who signs up. And the cost of signing up is also free....
customers who sign up for this preferred service tend to spend 25 percent more than the average guest
Doesn't sound very "free" does it?
How do they do it?
There is software out there called "Customer Relationship Management" (CRM) software that many banks, insurers, and utility companies are using to target fees and customer services. There are several ways this is accomplished using the profitability score, the risk score, and the opportunity score:
1) When you call customer service, you punch in your account number. The computer looks your account up and if you're a "good" customer (i.e. profitable), you get bumped to the head of the queue. If not, you wait.. and wait.... and wait..
2) The computer periodically measures the profitability of your account. If you are a very profitable customer, it may reduce or relax fees on your accounts.
3) If you start to pile up money in your bank account, the computer will sell your personal information to places like mortgage lenders, car lenders, and other high-dollar financing brokers to start trying to separate you from that money.
4) If your average balances start to decline, down go your scores and up go your fees!
5) Use all of your cell phone minutes every month without going over, and all three of your scores drop and you'll never get decent customer service. Some cell phone companies are even working on technology that will decrease the likelihood of your call being dropped depending on your profitability score; when there is contention between customers on a crowded cell. Say there is a full cell, and a highly-profitable customer drives into it - the software will determine which unprofitable customers can be dropped so that the profitable customer doesn't get dropped.
6) If a bank is taken over, this software determines which accounts the suitor keeps, and which ones are sold off to other subprime banks (probably with higher fees).
7) Pay off that credit card balance every month, and you'll start to see your interest rate drop gradually in order to encourage you to carry a balance (I know for a fact Capital One does this. I have a card and for every month I pay my balance in full, my daily rate drops by a few ten-thousandths of a percent). Conversesly, you may also see 'participation' fees levied against you if you don't ever pay interest.
8) You may also see 'participation' fees if you don't use your card for a number of consecutive billing cycles.
9) Call customer service frequently? Maybe you better think twice about that
10) Paying $4 to use a teller at your bank? Profitable customers don't have to. (i.e. you have your mortgage with them)
Exercise some critical thinking skills and I'm sure you can see where people you do business with will look for opportunities to measure your profitability. Once you can see where they are trying to manipulate you, you can turn it around and begin to manipulate the system in your favor.
Try a Credit Union for some fee relief (Score:5, Informative)
- never charged a monthly fee for any account
- provided me with a free supply of printed checks
- called me (years ago) when the interest rates on money markets became higher than those in my savings account just to ask would it be ok if they transfered part of my savings to a money market account?
- provided an ATM card with 16 free uses per month (half for merchants / half for cash withdrawal)
- provided a list of credit unions in my area which have no-service-charge ATMs (there are no local branches of my Credit Union)
- provided free on-line banking which gets better each year
- introduced their on-line bill paying service with two free years of use, then, after charging for it for a year, they reduced the monthly fee.
Maybe not all of them are as good as this one, but they do generally behave as though service to members is important. There is an alternative to fee happy banks and you should seek them out.Re:Vancouver Airport (Score:5, Informative)
The good ol' Canadian Govt (swindlers 'r' us), are also charging an additiona $20-25 in "security fees" each way as well. Not to say that any of it goes to airports to improve security. Nope, it all goes into general revenue in Ottawa.
One local carrier had a "fly for $1" day to illustrate how insane the fees were. The ticket cost $1, with all of the extra fees, levies, etc added on, the final cost of the ticket was nearly $100.
Re:Fuck banks (Score:3, Informative)
Jesus. I've seen my bank do the opposite - reorder so I didn't overdraft. Did I say bank? I meant Credit Union, which AFAICT is the only way to not be fucked in the ass. I left Fleet due to their add-on fees.
Re:Fuck banks (Score:4, Informative)
For example, you have $100 in your checking account. You deposit $500 on Monday. On Tuesday you write checks for $25 and $80. On Wednesday you write a check for $100. When you check your balance on Friday, you see that the $100 check is posted first, and depending on fees your bank levies against you, they hit you for a $25 overdraft fee. Then the $25 and $80 checks are posted: two more $25 overdraft charges. Then your deposit is posted on Wednesday or Thursday. So you expect your balance on Friday to be $395. Bzzt! Your bank has you for $320.
Again, I keep a balance above $500, mainly because of this bullshit practice. Yet, it galls me that I have to wait three days for a deposit to be posted when my bank charges me $3 for teller assistance. That's worse than any $2.50 ATM charge (which I never pay) in my book.
Ticketmaster.com (Score:5, Informative)
Today I bought a 25$ ticket from ticketmaster--$6.50 "convenience fee", $4 handling fee, $1.50 shipping charge.
Which would be reasonable except that delivery consisted of generating a pdf for me to download and print.
Mortgage points and auto loan 'doc prep fees' (Score:5, Informative)
Points have always pissed me off. Points are extortion charged by the lender to convince them to make you a loan - even if you have good credit. Another little advantage to this scheme is that they are the equivalent of interest charged up front. Each point is equal to 1/8 of a percent of interest on the loan amount, and it's paid up front.
The real trick is that it's the equivalent of that interest rate charged over the life of the loan. This would be fine if you kept the loan over the full 30 year (or whatever) term. However, based on turnover and people selling, moving, etc., the average loan is only kept for 7 years. Therefore the effective interest rate increase can be many times higher.
Considering the cost of homes and the amount loaned, this can be many thousands of dollars that you get screwed out of.
Bottom line: unless you're going to keep the loan over it's full term, never pay points. It's just not worth it. Take a slightly higher interest rate up front. Of course, YMMV so check it out and do some math based on the how long you expect be in that particular home and loan.
Another one is "document prep fees" when buying a car. This one is for filling out the form and processing the title at the MVD/DMV. This can run into the hundreds of dollars and it represents a few minutes writing your name and address on a form and writing a check to your local MVD/DMV office. Sure you might wait in line a while, but the folks there generally try to be helpful and can certainly tell you what you need to get titled and licensed. Is $300 - 400 worth eliminating the (maybe) frustration of that process? Personally, I'd ask for the MSO (Manufacteror's Statement of Origin) and do my own title work (with the help of the MVD/DMV clerk if necessary.)
Re:Per Transaction Fees Suck... (Score:5, Informative)
Most (if not all) credit card companies have policies against charging extra for credit card transactions.
http://usa.visa.com/personal/about_visa/contact_u
From Visa's web site:
Can merchants set a minimum purchase or charge me a fee for accepting my Visa card?
Visa merchants are not permitted to establish minimum transaction amounts, even on sale items. They also are not permitted to charge you a fee when you want to use your Visa card.
If you run into a problem like this with a merchant, please notify the financial institution that issued you your Visa card. These institutions have access to the appropriate Visa rules and regulations and can help you document and file your complaint. You'll find their address and/or telephone number on your Visa statement. Their telephone number may also appear on the back of the card itself.
Re:Fuck banks (Score:2, Informative)
ticketmaster DOUBLED the price of my ticket... (Score:3, Informative)
What started as a $14 ticket had a $.75 fee if you wanted to print your ticket off the internet, a $2 day-of-show price increase, both of which seemed fairly reasonable (though they should be giving ME a discount for printing my own ticket). Without any warning at all, at checkout, they tacked on a $3 'transaction fee' and a $5.50 per-ticket 'handling fee,' and a $1 building maintenance fee, PLUS tax, (which is not applied at the door), and my total came out to $29.67, MORE THAN TWICE THE ORIGINAL TICKET PRICE.
um, I took my chances at the door, and got in for $14. Too bad that's not an option for most bigger venues.
Re:Uh? (Score:2, Informative)
When you put your check in it gets cleared either immediately, or in a batch at the end of the day (Usually immediately now)
They can then use that capital for short-term high-interest loans for 3 days, which makes them a whole load of money.
The 3 day thing is because in the old days it had to be *mailed* - One day to the clearing house, one day back, one day to process - 3 days.
When they automated everything they decided not to pass the benefit on to the customer...
Re:Mortgage points and auto loan 'doc prep fees' (Score:2, Informative)
A point [etrade.com], also called a discount point, is in fact equal to 1% of the loan amount. Not sure how you get the 1/8 of a percent figure.
Re:Per Transaction Fees Suck... (Score:3, Informative)
Re:Per Transaction Fees Suck... (Score:2, Informative)
If the customer doesn't understand the difference and says a debit card is credit (since they look very similar) and doesnt enter their PIN than a transaction fee higher than a credit card is charged.
I had heard that a lawsuit (not sure if its the same one you are referring to) was aimed at this particular confusion between debit and credit cards causing large fees for debit transactions because of requiring the customer to self determine the card type, which would be quite cheap if the customer had identified their card as a debit card and had entered their PIN.
Use you LOCAL bank! (Score:1, Informative)
Here in Mass. there is the SUM network that shares ATM machines, which can limit your exposure to ATM surcharges if your bank is a member.
Get a good deal and support your local businesses at the same time.
Debit cards fees are cheaper (Score:2, Informative)
Re:Ahhh, the old screw you foreigner tax. (Score:3, Informative)
Dammit, i'm a Mexican and I really would like to deny what you're saying. Sadly enough, in many backwater parts of the country that's just too true. And it's not only for tourists either.
All I can do is to apologize in behalf of the honest, working people in the rest of the country, and hope that those idiots come to realize that scaring away tourists is not gonna help this country at all.
Re:ebay too (Score:3, Informative)
You agree that you will not impose a surcharge or any other fee for accepting PayPal as payment.
Re:Mortgage points and auto loan 'doc prep fees' (Score:3, Informative)
This sounds like the assumption is that the saved money will be invested at a 12.5% return, which sounds a little high, but I may be wrong with how the math works.