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‘Convenience fees’ for paying bills are widespread

THIS STORY APPEARED IN

January 04, 2012|By Todd Wallack

After just a day of heated complaints by angry consumers on social networking sites, Verizon Wireless last week shelved plans to charge customers a $2 fee to pay their bills with credit or debit cards. Despite the outrage over Verizon’s “convenience fees,’’ similar charges are almost everywhere.

Such fees are routinely imposed by telecommunications providers, electric utilities, lenders, schools, and government agencies on consumers who pay bills with plastic or get help from customer service employees.

RCN, a cable television company that serves the Boston area, charges $1 to make a payment through its website, $4.50 to use its automated phone system, and $6.95 to make a payment through a customer service representative on the phone. NStar, one of the state’s largest utilities, charges customers a $4.95 “convenience fee’’ to pay via credit card or debit card and $1 to make a payment in person at certain stores or outlets.

HarborOne Credit Union in Brockton recently started docking borrowers $9.95 to make a loan payment with a credit or debit card.

“It’s unfortunate that only a few of the fees have been targeted’’ by critics, said Jeff Kagan, an independent telecommunications analyst in Atlanta. The fees, he said, should all be made to “go away.’’

Analysts say companies are rolling out the fees to boost profits and steer customers away from costly services. Many companies have to pay processing fees (usually around 2 percent) when they accept a credit card, for instance. And it costs money to hire additional employees to assist customers.

But the boom in social networking sites, such as Facebook and Twitter, is making it easy for customers to band together to fight fees they particularly dislike.

Before Verizon, for instance, Bank of America Corp. scuttled plans to charge a $5 monthly debit card fee after more than 300,000 people signed a petition on Change.org to protest the fee, and many customers threatened to close their accounts.

Consumer advocates and analysts said Bank of America and Verizon Wireless caught attention while similar fees from other companies go unnoticed because both are dominant players in their industries and receive close attention from the media. In addition, the fees came at a time when many people already felt stretched by the weak economy.

“The bottom line is people need to feel the fee is fair and they are getting something for it,’’ said Barbara Anthony, the state’s undersecretary for consumer affairs and business regulation.

Countless other payment fees remain.

AT&T Wireless charges $5 to make a payment in person with a clerk or via phone with a live agent. And T-Mobile USA: $5 by phone with an agent.