Sleaze Fees On The Rise
Banks are backing off new fees on debit card use, but retaining many other fees that today are one of their main sources of income. Airlines are making billions a year in fees for things that used to be — and still ought to be — part of their regular service. Fees have become so outrageous at some airlines that a carrier that doesn’t charge some of them promotes this fact prominently in its ads. Imagine. Not egregiously screwing airline passengers. What a deal!
Bank and airline fees, however, though they get the headlines, are just the tip of this sleazy iceberg, as a sickly American economic system gropes wildly for temporary relief of any kind. The operative thinking here is that if you can’t raise stated official prices on services needed by hard-pressed consumers, get it from them any way you can.
Insurers offer another prime example of the sleaze fees phenom. This morning I got a quarterly insurance bill. It was for $60. And I had the option of paying the full amount for the year, or paying a $6 “processing fee” for the privilege of paying quarterly.
A processing fee from an insurance company? What else do insurers do but process paperwork — other than employing a few people to make visits and low-ball the damages they find?
Here’s the big picture problems with this nickel and diming fee charging madness. It makes personal budgeting much harder because consumers always end up spending more than the upfront prices listed for services; official inflation numbers are distorted because fees are not included in official computations; a focus on fees by businesses to boost profits rather than improving service makes for an increasingly distrustful marketplace.
But maybe I’m looking at this the wrong way. Maybe I should hop on the bandwagon myself instead of shaking my fist at it.
You’ve been reading this post for free. OK. But there’s a $12.50 “computer fee” to cover the wear and tear on the equipment I used to write it. And a $23.18 “veterinarian fee” to cover the pain and suffering of my cat who wasn’t getting patted during the period when I was composing this post.
Got a problem with this? Any complaints about these service fees should be addressed to your local bank, insurer, or favorite airline.
More from this writer at wallstreetpoet.com
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Great post Michael. I think one of the reasons banks, insurance companies, etc. are getting away with this is because it basically affects only the low end of the income ladder and they don’t have the power (or the ear of government) to do anything about it… Kind of like the “Check Cashing”
ThievesIndustry.This week I’d planned to downgrade my BofA Debit card to a ATM card but it appears that’s no longer necessary: “Bank of America backs down on debit card fee as customers roar back”
I do think I’ll start carrying a checkbook again (first time in 8+ years), maybe writing four or five checks a month will get them to remember just how much more work it is to deal with paper instead of the ether.
The nickel-and-dime (-and-quarter-and-half-dollar-and-dollar) chipping or nipping (“gouging” refers to main prices) at us really is a slashing or chipping of the skin equivalent to our income and wealth.
Now, many of you who also just hate big companies as a matter of course need to be consistent and decry the same from government (and view bigness of government in a healthy suspicious manner).
Serious folks are irritated at (not outraged by) nickel-and-diming by anybody as well as at being gouged by anybody or anything that tries to extract from us what the traffic will bear.
A note to Steve K. and other debit-card demoter-wannabees: Whatever happened (and it hasn’t insofar as ATMs are concerned) to being on a cash basis, if not before, now? (The rise of debit cards, I hope, wasn’t just a rejection of credit and credit cards but for some at least an insight that it’s the next most honest thing to cash.)
One other note about debit card depression: Don’t forget that some government agencies (and who knows, the private sector someday, too, if not already so) charge you to pay your bills owed to them(!) over the phone using a debit card. Whenever will consumerism be aimed at the biggest and often worst offender, government(s)?
You know what I remember when you had to pay a whole year at a time. Good companies didn’t have monthly payments for auto insurance. The fact that they charge for what is an added convenience doesn’t bother me a bit. It is no different than companies in other industries that give a break on the price when you pay more up front. I assume that the difference in language may be because the insurance companies only had the large payment option and then went to the multiple smaller payments that they ended up calling it a fee rather than a discount. That companies that were used to monthly payments already had that cost figured in where the insurance companies didn’t and so charged for it. So here we have people getting worked up over what people call something much more than the thing itself. Our culture seems to get more narcissistic and whinny all the time. I don’t need people to be nice to me. I don’t care if they are “good” to me. I want “straight shooting” and I’m satisfied.
This is a test… I’ve posted two comments in the last half hour and neither has shown up.
Neither had links or ‘foul’ language… What’s up?
SteveK, dump BofA anyway. They are backing off because of the 11/5 threat. They are waiting for the wolves to turn back to sheep, then they’ll slip the fee in unannounced. It would match a pattern of big banks over time.
There is no reason to keep personal banking at a large institution like BofA. You are not and will not be their primary customer, they serve investment firms and corporations. Because you are not the primary customer, you will be treated like crap.
Credit unions and local/regional banks serve consumers. Switch to one of them. My credit union pays me interest on all my accounts and no fees for simply having and using my account with debit cards.
On a side note, because of the sloppy way businesses handle their cyber security, I use cash as often as I can. Credit card is second because there are some protections there. My debit card is rarely used nowadays. Find a safe ATM, hopefully one in your bank or one of it’s branches, where the risk of tampering and the presence of spy cams is low, and re-learn to budget from and operate with cash.
I would Barky but I got my checking credit card account so long ago that I have “free banking for life” and have never paid BofA anything for either… ever.
They keep offering we wonderful perks if I’ll change them to something new… Their offers get smilingly tosses in the trash.
Why, other than the inability to manage money, would anyone reject credit cards?
There is nothing wrong with credit or debit cards if you have the common sense to know how (and when) to use them… And you use them to your advantage.
I’ve had two credit cards for over twenty-five years and they’ve never… EVER cost me a penny. Therefore I’ll be ‘go-to-hell’ if I’d let BofA charge me five dollars a month for access to MY money especially since my using a debit card saves them both time and money.
Personally, I like that my credit or debit cards tell me exactly where my money was spent but that feature in itself makes them completely different from “honest cash”, a term that makes absolutely no sence to me at all.