How Much Do You Pay A Year In Sneaky Fees?

from the more-than-you-might-think dept

Wed, Jan 16th 2008 11:44am — Mike Masnick

For years, we've discussed how silly it is when some firms like telcos and cable companies try to hide extra charges in unnecessary fees, often pretending that those fees are required by the government (they rarely are). Usually, it's just a scam so that companies can claim a lower price in advertisements or hide rate increases. But have you ever looked at just how much those fees really cost you? According to a recent report, the average is just under $1,000/year, which is pretty impressive when you think about it. Add it all up, and companies are making about $45 billion in hidden fees each year. And, as Broadband Reports notes in the link above, we've yet to see any government step forward and note that most of these fees seem to be false advertising when they're really used to charge you more than an advertised rate.

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Filed Under: fees

30 Comments

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Anonymous Coward, 16 Jan 2008 @ 12:02pm

Trying to figure out hidden fees for groceries.

I think the law should mandate the banning of fees. Just include it in the price, just like taxes are for gas.
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Anonymous Coward, 16 Jan 2008 @ 12:09pm

Speaking of hidden fees in gas. If I saw a gas station that said NO 9/10 CENT BULLSH*T HERE I would always buy gas there.
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lets see, 16 Jan 2008 @ 12:16pm

hmm, where to begin
how about banks and lenders?

fees to assess, fees to create, etc. fees for fees, fees for crossing balance limits. Over balance fees/NSF's (which are proven to be able to be fought in court in UK), etc.

how about we start with those? I imagine they're a large portion compared to some of the small fry.
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Overcast, 16 Jan 2008 @ 12:20pm

Hmm - outta tell them "I have an exemption on that tax due to.... " and make up a big line of BS. I bet that would get customer service into a major panic, trying to figure that out, lol.

And I agree with Anon on the 9/10's of a cent. I always just 'see' a price one cent higher anyway, it doesn't really matter. But a lot of people don't see it - like my wife. She'll say, look it's $2.99 a gallon there.. I'll say... you mean 3 bucks? hehe

Same thing - and yeah, since all of these places do it, I guess they figure they can get away with it. Although, on rare occasion a company does step up and make a stand. Like Wal-Mart did on 'American Goods'. Too bad they usually turn their back on the consumer again.

You know - I'm real thankful for things like Craigslist and Ebay - it really does offer an alternative to shopping at other places.

But I disagree on Tax - I think ALL taxes should be 'added' on clearly. Imagine... Gas is *really* about $2.40 a gallon, it's just that 60 cents is tacked on in taxes.

I'd like to see the public's reaction if they had to REALLY write a check to Government each payday to pay the 'taxes' they take out... instead of them getting to it first.
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Hulser, 16 Jan 2008 @ 12:47pm

False advertising
I'm generally anti-government intervention, but I make an exception for "honest labeling" laws or whatever you want to call them. So, don't force companies to change their billing plans, but do force them to properly list out the charges in a standard format.

For example, you'd have a standard Check / No Check column that indicated whether or not the fee was really mandated by the government (or instead was some form of hidden fee.)

The obfuscated gobbledygook that shows up on current bills probably falls into the category of false advertising. Maybe you could even force this standard labeling using existing laws.

Again, let them come up with whatever kind of wacky fees they want. But just make them put it in a format that would allow easy comparison to other companies.
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Bearfx, 16 Jan 2008 @ 12:57pm

Hidden Fees
$800-$900/year without breaking a sweat.

Telecommunications companies are the #1 culprit.

I have a standard telephone line with no additional services and no long distance. The base rate for this line is $14/month. After the "taxes, surcharges, and fee's" it comes to $28/month. If you read the fine print, it states clearly, in the fifth paragraph and the 21st page that these fee's are not mandated taxes, but are "cost-recovery" fees/surcharges/whatever... I always thought the price of the service should cover the cost of providing the service, but page 47 clearly told me I was mistaken.

Cell Phone - $50/month... plus another $20 in confusing, misleading, and should-be-illegal fees and surcharges. They are clearly explained though - somewhere in the 48 page micro-print contract you signed in blood for getting the service.

Cable, satellite, Internet... Any service you subscribe to is the same. The contract is virtually incomprehensible to the layperson, and gives them the right to charge you anything they want for doing nothing you want. It should be illegal.

It should definitely be illegal, but they only way it will ever be so is if enough people complain to their senators/representatives to make them listen to the constituents rather than the lobbyists (it takes a lot of people to overcome the power of the dollar).

Whenever possible, I do business with companies that the costs and obligations associated with their product and services clear and understandable, unfortunately they have become rather rare.
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Anonymous Coward, 16 Jan 2008 @ 12:57pm

I seem to recall some congressman raising a stink about telco fees awhile back and proposing a law requiring disclosure of all fees, taxes, etc.
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Anonymous Coward, 16 Jan 2008 @ 12:58pm

Re:
But if they were included in the price, like taxes in gas, they would indeed be hidden - instead, they should be itemized right where you can see them...
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mkam, 16 Jan 2008 @ 1:02pm

Re: Hidden Fees
I agree 100%. My phone and internet company is always pulling this stuff. You know like $0.48 subscriber line charge, or whatever else is on there.
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Xeno, 16 Jan 2008 @ 1:07pm

*shocked* *sarcasm*
"And, as Broadband Reports notes in the link above, we've yet to see any government step forward and note that most of these fees seem to be false advertising when they're really used to charge you more than an advertised rate."

OMG
The government isn't stepping in to inform it's people of an obvious injustice being done to them on a daily basis? I'm shocked... really I am. Maybe after they give this a moment of their attention we can address income tax next.
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Tom, 16 Jan 2008 @ 1:14pm

I agree - this is f-ing stoopid
One of the reasons I dumped SBC/AT&T - They tell me their service costs one price, then you get the bill and its atleast 50% more than advertised! Comcast isn't perfect, but atleast I can get a VOIP line through packet8 with UNLIMITED calling and 2-3 times the bandwidth through Comcast (compared to 3meg DSL) for LESS MONEY.

If you have ever been overseas, some countries make businesses bundle tax in with everything - the price you see is the price you pay... frickin awesome.
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Anonymous Coward, 16 Jan 2008 @ 1:33pm

I think the government should interfere to the extent of creating a transparent market, ie the advertised price should be the price you actually end up paying. The fees seem to be some calculation of the cost of complying with the law of the land. This is simply the cost of doing business, we all have various constraints placed on us by the law. I think they are trying to imply that they suffer some huge regulatory burden but seem to forget about benefits such as government granted mono/duopolies, but we don't get a discount on our bill to reflect their lack of competition!
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Anonymous Coward, 16 Jan 2008 @ 2:02pm

damn lawyers! it always comes back to a lawyer...always!
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Haywood, 16 Jan 2008 @ 2:03pm

My pet peeve is; Credit Card late fees
mortgage payments as well. My bet is they target every customer for a late fee at least every other year. Brilliant really, they just say they didn't get it on time, and you are powerless to prove differently. I've solved that by using a bank that I can pay in person.
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Anonymous Coward, 16 Jan 2008 @ 2:12pm

Re:
I'm like you, 'seeing' the real price. The 9/10 thing is really retarded, and exists only to try to fool people. It's just as bad in any retail store. $50? NO, ONLY $49.99!!! Yeah right. The thing is, it's such a successful gimmick because the majority of people are idiots whose brains are fooled into thinking the price is lower than it really is.

I, for one, think the penny should be eliminated. Everything should come to an even nickel. Yeah, I know what you're gonna say, $49.95. But I still think it would help the ridiculousness of pricing to a certain point. Besides, I rarely seem to find a use for all those blasted pennies in my wallet, which seem to do nothing but dig into my behind all day long. I used to work for a Godfather's Pizza, and I dunno how they did it, but no matter what you ordered, the bill always came to an even nickel, no penny mess. That made it much easier to make change on deliveries and such. It's not so far out of an idea as you may think.
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Scheffy, 16 Jan 2008 @ 2:28pm

Somebody should build some kinda site where people can post what plans they get from various companies and what their totals actually end up being. Amounts may vary somewhat by location, user, etc. but you'd get a much better idea of the general, final price you'd pay than just by going off the volumes of PR and legalese crap they shove down your throat when you're thinking of signing up. Plus if you see wild variations in actual prices paid by different people for the same plan, it would serve as a huge red flag warning you that you're gonna get hosed by that company if you sign up.
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Anonymous Coward, 16 Jan 2008 @ 2:41pm

Re: My pet peeve is; Credit Card late fees
i enjoy the citibank solution. they offer the "6 months same as cash" credit cards and such (i know others do, but i really enjoy the citibank solution). you see, even if you pay your bill ontime, it has a good chance of sitting on someone's desk until it is processed. that is how you get a late fee with citibank - it sits on their desk (unacknowledged, of course). after all - they have a lot of mail come thru each day - how can they possibly enter all of it each day (their excuse when i did call them on it).

call them, and they will waive the late fee and applied the credit to this month - but you still didn't pay for last month - so you get the late fee again!

smooth system they have!
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Anonymous Coward, 16 Jan 2008 @ 3:07pm

Bogus System Access Fee
In Canada, the one that really gets me is the Bell/Fido/Rogers/Telus monthly system access fee that they used to say was mandatory by the government, but is not. I wonder if anyone has complained about this. I know I have numerous time.
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Vincent Clement, 16 Jan 2008 @ 3:35pm

Re: Re: My pet peeve is; Credit Card late fees
Stop paying your bills by mail. Use the internet.
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Anonymous Coward, 16 Jan 2008 @ 5:02pm

Re: Re: Re: My pet peeve is; Credit Card late fees
With Washington Mutual that wouldn't help. They won't process your bill payment for your credit card the same day unless you pay nearly TWENTY DOLLARS in yet another bogus 'fee'.

It should be a bloody automated process, it is for any MMO subscription!

Oh, and they give you the 'option' of paying on any given day you choose, but I've found that unless I pick the day the bill is due it doesn't get done until the day the bill is due anyways.

Then lets not forget the fun time they made me pay DOUBLE the bill. I setup the payment online, the next day get a call from them saying they needed some more info. Payment due date comes by and they charge me TWICE, overdrafting me. At least I got them to drop the overdraft charges, all 306 dollars of them because I didn't find out until the evening after they took out my 'payments'.

Sometimes this shit is just too shifty. Inexperience dealing with it all doesn't help either.
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wklink, 17 Jan 2008 @ 6:57am

Dry cleaner fees
My dry cleaner just raised their rates by 10 cents. The thing is, they have a large sign (visible from 3 blocks away) that says "$1.90". I always thought that sign showed a lack of foresight because surely they'd have to raise prices someday. After Jan 1, they added a sign (inside the store by the register) that says "Due to increased fuel costs and property taxes, we will begin adding a $.10 surcharge for each garment".

Now I had always assumed that part of that original $1.90 helped pay their electric bills and other overhead, but this sign implies to me that all that was free before.

What I don't understand is why they (or anyone else with these sneaky fees, for that matter) don't just advertise all garments for 10 cents and assess $1.90 in fees...
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Mike Wyman, 17 Jan 2008 @ 7:11am

Rental Car Companies
Airport car rentals are just as bad. The following are the fees/taxes from a recent Hertz car rental in Boston:

TAX: 5.00 %
AIRPORT CONCESSION FEE RECOVERY ON FLIGHT ARRIVALS: 11.10 %
VEHICLE LICENSING COST RECOVERY AND EXCISE TAX REIMBURSEMENT:: 3.79 %
CONVENTION CENTER SURCHARGE & PARKING FINE RECOVERY: 10.60 USD
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Charlie, 17 Jan 2008 @ 8:31am

Fees Fees Fees Fees
I may be mistaken, but my cable company doesn't fee me to death. I currently only carry Internet service from them. The rate I am billed is the advertised rate, plus sales tax on a portion of the bill.

In Texas up to $25 in internet access fees are tax exempt (passed in the 90's to allow local ISPs to compete fairly with AOL). So Time Warner puts a $25 internet access charge on the bill. There is another 14.95 Charge for 1 computer to access (taxable). I recently upgraded to turbo access, so there is another $15 taxable charge.

Since I pay 8.25% sales tax on anything in stores above the marked price, I feel this is fair.

When I had video service there were additional taxes, but they were City Franchise, etc, and all actual government taxes.

I won't touch land line phone service or DSL because of the fees. Wireless service, I'm stuck. My VoIP carrier has a BS $2.95 regulatory recovery fee, disclosed fairly up front, but still clearly meant to artificially lower the advertised price. And now a $1 911 fee, which I don't believe is a tax but a cost offset.
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Jason, 17 Jan 2008 @ 9:12am

Book on the subject
NPR had an author discussing this very topic a few weeks ago. Cell phone providers are the worse offenders. First they lock you in to a two year contract and then your 40 dollar plan becomes 50+ after "fees" and taxes.

Anyway here is the book - Gotcha Capitalism

http://www.amazon.com/Gotcha-Capitalism-Hidden-Every-Day/dp/0345496132/ref=pd_bbs_sr_1 ?ie=UTF8&s=books&qid=1200589648&sr=8-1
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Pro, 17 Jan 2008 @ 10:58am

Vonage
When I got Vonage it was pretty close to $25 a month just like it was advertised. Every month, they send me an email stating what is getting charged to my credit card for that month. It's been steadily climbing cents a month. It's up past $30 now... Really pisses me off.
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Ben, 17 Jan 2008 @ 11:12am

BS Charges
I recently looked @ my (wired) phone bill and noticed it was $48/ month. I make no long distance so I wondered why it was so high. I looked through the bill and found there was a $1 charge for the LD plan, Hmmm a dollar to have something I may not use, OK. Then a bit further I found the stopper $8.99/month minimum use charge. With all the taxes and everything it came to $14/ month, for not using it.

I called and canceled the service (that's another story) and payed for one lunch out each month.
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Javarod, 18 Jan 2008 @ 5:25am

Re: 9/10ths
You know, I've always said that ifn the government needs more money from us, they should up the tax 1/10th of a cent, most of us would never notice it (2.99 9/10ths aka 2.999 is how different from 3.00?), yet it'd give the government more money. Mind you, I don't think we need more taxes.
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Leon, 6 Mar 2008 @ 8:26pm

NY/NJ Port Authority
the george washington bridge was built back in 1931. since then the toll has risen from 3.00 to recently 8.00.. they said tolls would be charged until the bridge was paid off.. however, the bridge was paid off how many years ago and toll cost just seem to keep rising..

during peak hours if your driving from NJ into the NY city it's 6.00 dollars using ez-pass without it's 8.00 dollars. same thing for the trains as wells just not as high as the brigdes of course. the response to the public for the increase was to keep traffic down during peak hours.. another way to make money off the people.. 2 bucks will not keep anyone from crossing a much needed bridge to get into the city.. it's not like they have sail boats to cross over the hudson river.

Jersey's Governor Corzine is horrible.. this guy wants to increase the toll to a 1.00 that is already .70 cents on the nj turnpike and nj parkway and increase it by %50 starting 2010 until 2085. his answer was we need to start paying off the state debt. sorry but will this guy be living that long i know i won't be around by then...
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Anonymous Coward, 7 Nov 2008 @ 8:48am

hey golve you
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Angel (one angry momah), 26 Nov 2008 @ 11:57am

its plenty mad!!
Yeah so I'm glad I stumbled upon this forum...so I thought I was the only one in the world that wanted to have my taxes showed to me in clear detail. ATT/TW is unbelievable. ATT for one I was paying my bill monthly out of another account that I have and I set up the account w/ one of my credit cards which is from a different account right. So All of a sudden three weeks ago I decided I was going to go to Verizon bc of att bs. I’m like show me the fee's right that you claim I have to pay. I read the fine print alright and since they changed their policy apparently now you have to pay a extra 10% if they feel like charging you that. I'm like wtf. So I was going to cancel and they charged me next month’s bill before I had a chance to cancel-btw it wasn’t even my due date. I went to the store to find out why bc they kept giving me the run around on the phone and the lady was like we can’t give you your money back. I told her I've been paying my bill from another account and she tells me no we only do automatic payments. I said I don’t have automatic payments and she's like yes you do. I'm like I've been paying my bill by myself each month from another account and all of a sudden I'm paying automatically from my credit cards account(someone please tell me that's illegal) which I never did. I have the text messages where they send to me telling me I need to pay my next month bill before the due date. If its automatic it just goes through and they send text saying payment was received right? I wish someone would get like a mass amount of people who all feel like the taxes and crap out gov't is ignoring are insanely ridiculous and we all get together so that the media will definitely be there. Maybe after we all go on strike and they're losing money will they finally get some laws on it. Also yes I do realize even though I'm young that some taxes are needed, but honestly the fee's even at school we question why do we need this fee and that fee when we don't use the service. Especially the transportation fee for the buses that no one gets on. They told us it was for students to ride to school for free. I had a friend who talked to the bus company b/c she thought she was going to ride for free they were like 3dollars please for day pass. I'm like wow and our school told us it was for free. So yeah we do need a change!
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