So I heard a report on NPR a while back about
Gotcha Capitalism, a book apparently (and an absolutely terrible title, if you ask me), which deals with all the hidden fees that companies charge consumers.
It's kinda amazing, really -- just today my company was double-billed by UPS for emptying one shipping canister, because there were technically two shipments that had been consolidated inside one canister. So for doing the same work they do in another canister, they charged twice (to the tune of an extra $450 or so), simply because there were "two" shipments in there. When paying my internet bill, I was also informed that starting in March Comcast will charge $3.95 if you speak with a real, live customer service representative when paying your bill. Lord knows expecting businesses to help their customers is asking something above and beyond what a normal customer should do. Working at a rental car company, I also see how they charge $4.10/gal. if you return the car less than full, because like gas is more expensive when I pump it as opposed to someone else, you know, my services are at a premium, and I even heard about another company charging a flat $2 "top off" fee to all returning customers.
So anyway it's all over the place. The best example that I heard from the book was cell phone companies who charge a fee, with some kind of clever wording, along with all the local state and municipal taxes, simply for collecting those taxes. So there's the $49.99 fee you're quoted, then taxes on top of that, then a small fee collected simply for collecting the taxes.
You get the point -- it goes on.
So the pertinent question, as I see it, is -- should the government do anything about this? Personally I wouldn't have any problem if this type of bullshit was outlawed and consumer protections were written into the law. Comcast is essentially a monopoly for cable service in the area, and they now fucking charge you for supplying customer service? The mind reels. The DMV may be a pain in the ass, but at least they don't bill you simply for walking up to the counter.
Unfortunately, writing consumer protections would obviously be insanely difficult. What is a legitimate fee and what isn't? Where do we draw the line? Can competition really fix this when the 7 or 8 cell phone providers all engage in the same fucking bullshit? When the
only cable company in town bilks you ever which way they can?
So anyway talk about government regulation, how shitty the private sector is (seriously, the myth that the private sector is more efficient than the public one is one of the bigger lies ever told -- it's just more profitable), the stupidest fee you've ever paid, whatever.
--I was going to put a silly disclaimer down here about what will happen to you in this thread if you post wrong or something, but then I didn't feel like it. Just imagine how funny it would have been, though, and like relevant to underscoring my point and such. It would have been very much of both, let me tell you.
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*The Long Tail is probably the worst offender in the category of "using an entire book to convey a point that could be illustrated in two paragraphs".
Portland Comcast's customer service is one of the most abysmal I've ever encountered (and local cable companies are pretty bad) but what else are my options for cable TV? There's Direct TV, obviously (I haven't done my homework on that), but from what I hear, it's not like they're the paragon of transparency and forthrightness with their customers, either.
Or cell phone service, for example. Is there a provider that doesn't tack on $6-7 above whatever the advertised price is? If so, why aren't they advertising that fact? I think mainly every company hides fees because they can, and it's not like they're skimming money off consumers like this to save a faltering business model, that money is going straight into shareholders' pockets.
When I go to pay my credit card bill online, the balance is on the front page of my account screen, but I have to copy/paste it because it appears nowhere on the bill-paying screens. Tricky bitches.
Don't get me started on cellphone companies.
Also, Consumerist.com
edit: and fucking Christ, I have a decently large TV, and if I can't read the fine print, it's too damn fine.
I don't see any problems with overdraft fees. I always take the approach of "Know how much money you have and don't spend more than that." I never feel sorry for people with overdraft fees.
Is that true?
Sneaky little fees are the main remaining way for companies to act out on their hatred for customers.
I think it was cell phone companies. You're not using a service they are offering and they claim it costs them money so they charge you.
On the one hand, I'm with YodaTuna on the "you know what you have in the bank" train. On the other hand, I do think it's cheap that they run the charges is descending order based on size, to maximize fees.
Also, I'm often honestly curious just exactly how those fees are justified. I mean, $30 on a single check or charge is one thing...there may well be an average cost of collections involved. But charging somebody like $300 when they'd only have (in theory) been like $16 over their balance (yay for small charges)? Is there any earthly way to actually justify that fee other than "because they can?" Especially since the entire system is automated now?
Which brings me to the issue I really wanted to bitch about. So I have overdraft protection on my checking account. All it does is, if I overdraw with a check or charge, transfer that amount from my savings to my checking. Sounds pretty spiffy. The charge for this? Like $25 per transaction. An overdraft is $35.
Now, if instead I simply transfer the funds myself then make the charge, how much do I pay? $0.
So I'm paying a computer program $25 a pop to transfer money for me automatically. There is no human being involved here. Are computer cycles really this valuable?
Basically, banks will take any and every opportunity to charge you a fee in my experience. Some justifiable, some less so.
You know what else I love? Only tangentially related, but anybody looked at a student bill lately? Discounting housing and heath insurance, I pay like $2500 a semester in tuition and another $1500 in fees. On the one hand, maybe having a nice little itemized list of exactly what each amount goes towards makes some students feel good. On the other hand, many scholarships and other financial incentives (including some offered, coincidentally, by the school or state) are based on the amount of tuition and not fees. So maybe there's a reason they don't just roll that $60 athletic fee and $40 computer lab fee into your tuition. Fuckers.
Oh, and for charging for not using long distance: our old phone company did this. Though it wasn't so much a fee for not using long distance, but rather a fee for blocking it so it can't be used on your line. If having long-distance access is a default state (and I'd assume it is) I can imagine perhaps this might cost at least some small amount extra to implement...but not per month. No, rather it's an obvious ploy to convince you to carry long distance service in the hopes that you'll wind up using it.
so basically, until you can pay off all your fees, plus the overdraft fees you incurred, you will just be overdrafted again back into debt.
its a scam.
Anyway, I don't think these retarded fees are fun to pay or anything. You might even argue that it's the company's job to give you the service you want, not for you to accomodate their operational procedures. But I just wanted to raise the point that those fees aren't always just another attempt to nickle-and-dime the consumer out of house and home.
www.tracfone.com
This is what I use. The customer service is great, too. The people don't speak the best english, and you have to repeat your name/address a few times in general, but they don't hang up until you're taken care of, even when it's weird shit that has to be sorted out at the actual cellular towers (I have no idea, but it's what happened to me).
They also send out mailers pretty frequently that give you bonus minutes when you buy minutes, and you get bonus minutes automatically for random shit, like your birthday and Valentine's day.
"Gas today is $3.149 a gallon"
You should not be able to charge an extra fucking 9/10 of a cent on every gallon, just because you know people don't pay attention and it looks slightly cheaper. There is no good reason for that shit.
Here's what happened to me a few days ago. I'm a poor college student, and it was a day before pay day, which means I had VERY little money in my checkings account. How little? $4.40. Yep. Well I hadn't eaten all day, and I needed some protein because I hadn't had meat in a few days and the fridge was empty. I got some chicken and peppers for like $4.30. I didn't overdraft. However, Bank of America has "keep the change," so they rounded up and fucked me over $35. Luckily I've never overdrafted before and I was able to get them to overturn it after twenty minutes or so, but this is the kind of stuff that Banks do to make sure that they make money -- a lot of programs that look helpful, but actually are harmful to the consumer.
Everyone does it the same, and everyone has for my lifetime at least, so I don't see the problem.
LIES! You obviously work for them!
kidding, but I absolutely hated my tracfone. Yeah, they don't tack on hidden fees because they can't, but they do actively waste your minutes that you buy. One example is how they send you ad-texts talking about deals and whatnot. It wouldn't be a big problem, but you have to read each text if you want to see any of the others in your inbox, and it costs units to read texts. Another problem is that the phones randomly switch to reading your location as out of the local area, meaning you get charged double units. I would be sitting in my room, call one person fine, then call another and realize I was roaming or whatever the term is that they use.
After dealing with them, and realizing I hated having a phone with me all the time, I switched back to a wired phone plan with decent prices.
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Oh, and the stupidest fee here in Houston is Comcast charging $25 to come out and fix your cable internet or TV connections. I'm not talking about replacing a modem - I mean coming out and fiddling with the wiring and cable lines. But wait! If you pay $3 a month on top of your bill, they'll waive that fee. That's right - we're paying a kind of insurance to protect consumers from their faulty equipment. Installing a cable also costs $100 but they don't mention that in their ads, of course.
Hell, they even start requiring the cheap airline companies to quote complete prices in advertisements soon - right now the prices can still be something ridiculous like 0.01 Euro (with taxes and airport payment you end up paying around 30 anyway).
How can you people accept being fucked over by banks that hard?
Fun story.
Girlfriend knew she was going to be overdrafted, so she put money into her account on a Sunday online to avoid this. Online, as she was told by a CSR, meant that the money would instantly be there, just wouldn't be posted. The CSR even said the money she'd just put in was there. As an arbitrary number, let's say she had 20 in there, put 50 in, and then spent 40. This isn't far from the truth, it was a small number like this. So, if she HADN'T put the money in, she would definitely have been overdrawn 20 dollars.
So she goes and spends the money, but the 40 was spent about 5 different ways. And at Compass Bank, the overdraft fee is $37, for each and every transaction that goes over. And no, they don't just take the extra money out of your credit card or savings account if you have one and say "it's ok, try not to do it again," they just take the money from your checking. And then ream you some more by charging you 5-7 dollars every day it sits in the bank, not being fixed.
So on Thursday she checks her account and she's completely in the red, by about 2-300 dollars. She panics, calls customer service, who tell her that hey, that CSR she talked to the other day was wrong-o, the money didn't even touch her account until Tuesday, and she still has to pay. Her entire savings account later (400 dollars worth), she's finally in the black, crying her eyes out on my bed, and the next day Wachovia had a new customer.
edit: page dedicated to Compass Bank and its suckage.
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@hoodiethirteen
Here's what Washington Mutual would do to me all the time when I was doing a lot of consulting and didn't have a full-time job:
Monday: Check balance: $100. Deposit personal check from client, $200.
Tuesday: Check balance online. $100. Client check hasn't come through yet. I buy dinner for $20 and gas for $50.
Wednesday: Check balance online. $100. No transactions from the last three days have been posted yet. Buy dinner for $20.
Thursday: Check balance online. $300. Deposit from Monday has been posted, but no withdrawals have been posted yet. I buy groceries totaling $190.
Friday: Check balance online. Negative one hundred dollars. The deposit that was posted on Thursday is now listed as being posted on Friday despite showing up the day before. All withdrawals are posted in the following order: $190, $50, $20, $20, and all are posted with Thursday's date. Overdraft fees on all four transactions.
I don't see how that was remotely possible without human intervention.
the "no true scotch man" fallacy.
the "no true scotch man" fallacy.
At the moment, there's a huge court case going down against the banks on cheque-bouncing. The fee the customer is charged for this 'inconvenience' to the bank is only supposed to cover the actual cost to the bank of checking the too-much amount against your account balance and rejecting the cheque. However, at the moment they've been charging ridiculous amounts like £30, which clearly isn't what it's cost them. Proper estimates (i.e., working out how long it would take a low-paying clerk) put the price at a fraction of that.
Also, very recently, Ryanair were ordered to make their flight-price advertising more in line with the actual price the flight costs after you add in taxes etc. They were advertising "1p to Amsterdam!" and the like, which, needless to say, ended up more like £60 with surcharges totalled up.
In that situation, unless they automatically take the money out of your savings account (which if they can do, there shouldn't be overdraft fees at all) I would take my business elsewhere and let my balance stay at -2300 or whatever the hell kind of insane amount they want to charge.
I once had Commerce Bank dock a 1000 dollars for an overdraft I incurred when I went to Canada. I overdrafted by about 50 bucks in total, but it all came as double ATM fees, both for being foreign (the 1-2 dollars you agree to in just about any ATM) and for literally being out of the US (a hidden 11 cent charge per withdrawal.)
So let's say that during the trip I used the ATM 14 times, in small withdrawals. 14 times 2 is 28, times 35 is 980. Just in overdraft fees.
I went and told them I thought it was ridiculous that they just post all those 11 cent charges at once, (they all came in around a day after I got back) and that in general, I was willing to wager most banks wouldn't make me pay 1000 for something like that. They ended up only charging me 50 on top of the amount I overdrafted, which ended up being around 60. 110 in total.
I think that banks are perfectly capable of setting up accounts that don't have delayed debits though. Before coming to the US, I'd never had a bank that even let me overdraft with a debit card or checking account. When you're at zero, it's zero, and debits go through pretty much instantaneously. Of course, why pay to update your shitty infrastructure when having it that way not only saves but earns money...
Then you get to deal with the wonderful world of credit reports and collection agencies.
The best way to deal with banks is to put most or all your money in one bank (This doesn't work for college students and the like, you need a significant amount of money in CDs and such or so for it to work.) Then whenever anyone does something like charges you overdraft fees, just call the manager and tell them you wish to withdraw all of your money, and explain exactly why. (Make sure to mention exactly what caused it, and make sure the bank doesn't have some insane early withdrawal fee, but for the most part it's only 90 days interest to withdraw a CD which is trivial on a 5 or 10 year CD)
99% of the time they'll apologize and fix whatever you complained about rather than letting you walk. Especially if you have a significant amount of money (say on the order of $25,000+) in the bank.
I actually tried that route after being fed up with the fee structure my bank adopted after being bought out. It's a long story but it doesn't work and you end up paying money to collection agencies.
especially if the actualy overdrafted amount that the bank actually lost is often not even half that of the total amount owed?
Or something!
At the very least they'll put a flag on your credit report and you'll have a very hard time getting anyone to loan you money until you pay it off.
Coupla clicks later, done. "Sorry, ma'am, you now have a balance of -$35". But wait...who the hell changed the plan in the first place?
This has happened before, too. Damnit, why are we still with them?
I have a student bank account with the Co-operative bank. It's meant to have a big, interest-free overdraft available. In the first year I run up a bit of overdraft, so this year I'm more careful with my money, saving up in my other bank account until I can pay the debt off. Which I do. I go in to check my balance and see that my money's gone in and am told I now have a Current Account and have been charged interest for my previous overdraft.
Surely there's something legally prohibiting banks changing their service without telling you? What if my ISA turned into a current account overnight? It's total bullshit and it really annoys me. The Cooperative have pulled this stunt a few other times previous to the above incident, claiming at the start of a new school year that I'd finished my course, and also fucking up when I OPENED the account and giving me some sort of hideous "Premium" account that had the same possible overdraft, but was designed to rape you anally with interest charges.
All in all they lose out though, because when the current issue is settled, I'll just quietly move my business to a different bank.
It could create a precedent for these kinds of cases.
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