Paying... to pay your bills

Online shopping made easy?


BILL RADKE: If you pay your bills on time, you are to be congratulated -- and possibly charged a fee. That's right, some lenders, telecom companies
and other providers will charge you a charge for paying what they charge you. Let's get an explanation from Los Angeles Times consumer columnist David Lazarus. Good morning, David.

DAVID LAZARUS: Good morning.

RADKE: Please explain.

LAZARUS: It's called pay-to-pay. It's remarkable.

RADKE: Pay-to-pay?

LAZARUS: The notion that you're being charged a fee to give them money is simply astounding. Let's look at some examples of this. Let's say you're running a little late with your mortgage payment or whatever, if you are to go Chase, Wells Fargo, Bank of America and you want to use their automated phone system -- no human beings within sight -- $15.

RADKE: And this is not a late fee, this is just a charge for using their automated systems?

LAZARUS: Just a charge to pay your bill using automation. And when you talk to consumer advocates about what is the real cost of an automated transaction, a few cents, if that.

RADKE: Yeah, isn't that the point, part of the point of automation?

LAZARUS: To save money, exactly. And yet these guys are charging $15. I asked Chase, "How can you charge that much for an automated transaction?" They said, "Well, that's how much we charge." And you look at some of the other charges out there. For instance, this week Verizon Communications is introducing a new $3.50 charge if you pay your bill online, automated phone system, or to a service rep without using their recurring, automatic bill paying system.

RADKE: So that's unless you have it taken straight from your bank account, which some people don't like to do. I mean it feels a little insecure, right?

LAZARUS: Some people want to be in the driver's seat. It's that simple. And it's your money. You should be able to make that choice. Moreover, let's remember, you're giving your money to a company. That's what you're doing. They're in the business of receiving your money for a service provided. So the notion that a Verizon, for example, will tack on another $3.50 just because you're not paying them in the manner they would like to be paid -- it's extraordinary.

RADKE: So the only conclusion is pay attention and shop for that?

LAZARUS: Pay attention. Be sharp. And also complain because pay-to-pay is just ridiculous.

RADKE: We need more complaining, says Los Angeles Times consumer columnist David Lazarus.

LAZARUS: Thanks and pay up.

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What does one do? Seems the best idea is to take your business elsewhere.
Thanks for an informative article that should make everyone go and comb through their bills to see what small charges may be adding up.

NJ Grant www.gofreegovernmentmoney.com

I am often to blogging and i really appreciate your content. The article has really peaks my interest. I am going to bookmark your site and keep checking for new information.

With regards to the pay to pay situation what does one do when a company charges you to pay your bill no matter how you pay it? The Metro cell phone company charges a fee for every possible way to pay your bill. They do not offer a free way to make a payment. Now that should be illegal. Can someone tell me if there is anything I can do about this.
Thank You

Dear Marketplace Radio,

I am writing to update you on my efforts to complain to Verizon Communications, Inc., about their new "Pay to Pay" scheme, whereby Verizon contracted with a third party, without customer consent, to extract a new $3.50 fee for paying via a credit card.

On the afternoon of 10/20/2010 I was called by Mark Reddick of Verizon's Executive Customer Relations. I thanked him for getting back to me and asked if he was empowered to use his last name in communicating with customers. He replied that he was. Further, he offered that all Verizon employees are allowed to use their last names when communicating with customers, however that some are given the authority to use only their first names with customers if they elect to. Apparently the two customer service representatives I had dealt with on this issue previously elected to use that option.

I next asked Mr. Reddick if he was authorized eliminate this new fee that was offensive to me as a Verizon customer and embarrassing as a Verizon stockholder. Instead of answering my question, he offered to refer me to this new third party company. I responded that I was interested in speaking with the authorized executive at Verizon, not in being distracted by a third party. (Apparently one of the services this third party offers is to receive complaints that they are not empowered to act on, perhaps acting as a "safe" sink for dissatisfied customers.)

I asked Mr. Reddick a second time, if he was authorized to eliminate this new fee, and he again did not answer my question, instead, he pointed out that as a customer who payed through direct debit, I would not be charged.

Again, now for a third time, I asked Mr. Reddick if he was authorized to remove the new fee. Again, he did not answer, this time offering to make a one time restoration of $3.50 to my account.

I pointed out to Mr. Reddick that he still had not answered my question: was he authorized to permanently remove the new "Pay to Pay" fee or not? I pointed out to him that this was a yes or no question.

After the fourth attempt, Mr. Reddick finally answered my question. The answer was no, he is not empowered to make that change.

I thanked him for providing a straight answer to my question. I asked him to connect me with an executive who was empowered to rescind the ridiculous new fee. I asked him to name that executive. The only name he provided was that of Ivan G. Seidenberg, who is Verizon's CEO. I asked him for Mr. Seidenberg's contact information. Mr. Reddick offered to provide me with a United States Postal Service address. I pointed out that in the 21st Century, more rapid means of communication were possible, several of which Verizon was in the business of providing. Further, as I was operating my automobile at that moment, if he would kindly e-mail me Mr. Seidenberg's e-mail address and other contact information.

Mr. Reddick agreed to provide Mr. Seidenberg's contact information electronic contact information to me by e-mail.

I am writing to Marketplace Radio today as more than one week has gone by and I still have not heard from Mr. Reddick.

Earlier today I called him at the number below and left a voice mail. Next, I e-mailed him at the address below and requested that he fulfill his promise immediately to provide Mr. Seidenberg's contact information.

I received an automated response to the e-mail saying: "I will be out of the office October 28 returning on November 3rd. If you are in need of immediate assistance, please contact one of my peers on 212-321-8700."

The next step after yet another delay, or delaying tactic, will be to call this number.

I will report on progress in a future posting.

Thank you again for reporting on this story.

Mark Frautschi




Mark D. Reddick
Executive Customer Relations
Verizon Communications, Inc.
(212) 321-8457

Reference (needs to be updated):

New message posted on Verizon's site: "Important: We recently let you know that one-time payments using a credit/debit/ATM card would soon be processed by a vendor who would charge a $3.50 fee. This change will not take place as scheduled and we will notify you in advance of any future changes."

We win!

I think that denying knowledge of a fee is a tactic, and those who do just want to get you off the phone.

This charging to pay their way must be illegalized! I thought there was already a law out there stating that the business practice of offering a "free" item if a customer pays for a service by that business is illegal? Any lawyers out there willing to do some research about this and publish it? Such a service will be very much appreciated by your fellow bill-payers, and benefit you, as well. Thank you in advance!

Dear Marketplace Radio,

Earlier I wrote that I had contacted Verizon Communications and requested to speak with an executive empowered to affect the "pay to pay" policy and to request that the rediculious $3.50 charge for nonrecurring credit and debit card payees be rescinded.

I described my unsatisfactory response from Amy, a Verizon employee so disempowered she was not allowed to use her last name.

Amy neither accepted nor denied my request. Instead, Carmen, an equally disempowered employee wrote, saying that Amy was out of the office at that time.

Carmen further wrote that the policy could not be changed and that fee goes to a vendor and Verizon has no part in that fee.

I replied to Carmen that this statement was obviously untrue. Verizon had no difficulty changing from no fee to "pay to play". That was as easy as finding a vendor to hid behind, and to use that vendor to shift a new cost onto the customer. Verizon chose the nameless vendor they now hide behind. Verizon could obviously choose to revert to the previous system and or another vendor, process the cards themselves, and so on.

Whatever Verizon chooses for a vendor, Verizon also obviously chose to leave their customers out of the decision.

I renewed my still unanswered request to speak with an executive empowered to effect this policy and asked not be shunted around to disempowered employees who are not allowed even to use their last names.

I have met some really wonderful people who work for Verizon. People who really want to make a difference. It is painful to see so many of them hamstrung by a set of disempowering policies. That's a lot of money and effort to prevent employees from helping customers. You would think that Verizon could save a lot more than $3.50 a month on some of their customers by growing a customer oriented culture within their organization. They could probably get a better job done with a smaller head count that way.

I'll write again with further developments.

Thanks again for letting us know about what Verizon apparently hopes the vast majority of its customers will not notice buried in its complicated bills.

Mark Frautschi

Dear Marketplace Radio,

Thank you for your coverage about new fees Verizon Communications will impose on its customers who deign to pay their bills online using a credit or debit card. As a Verizon customer I am outraged and as a Verizon stockholder I am profoundly embarrassed.

After I failed to find the announcement for these new fees in Verizon's web pages, I wrote to customer service and complained about them. I cited numerous problems with the fees, ranging from bad customer service, bad customer relations and a study Clay Shirky cited in his book Cognitive Surplus, about a chain of day care centers in Haifa, Israel, that imposed fees for parents who picked up their children more than a few minutes late. These fees broke the relationship of trust between the parents and the day care centers and actually multiplied the rate of late pickups, a pattern that persisted even after the ill-conceived fees were rescinded.

I received a short reply from a woman named Amy, who is not allowed to give her last name. Amy addressed none of the concerns in my letter, instead, pointing out that as long as I continued to pay my bill by directly debiting my checking account, I would not be charged this new fee. Amy said that she "hoped" that this would allay my (singular) concern.

Amy also shifted the blame. She pointed out that the fee was not Verizon's idea. It was being imposed by a new card processing company, a company that Verizon had chosen.

I wrote back that her letter did not allay any of my (multiple) concerns and requested that someone with the authority to address them contact me and that her letter amounted to a nicely worded brush off.

If someone with more authority contacts me, someone allowed to use their last name, I will let you know.

Perhaps I will point out to this person that it was Verizon's choice to use the new card professing company and that one way to shift costs from Verizon to its customers is to choose a company that charges a per transaction fee.

Verizon can, of course, complain to this unnamed company. I wonder whether their Verizon's complaint would be answered by a person with permission to use their last name? Verizon is also free to renegotiate its arrangement regarding processing fees with this new company, or with the previous company, instead of creating a new minority among its customers with the express aim of imposing a new fee on them. If enough of Verizon's customers and shareholders complain, perhaps Verizon can be dragged to the view that placing their customers' interests last is bad a policy, one that lacks dignity, lowers brand equity and is simply bad business. Some companies, like Zappos, have seen that placing their customers' needs first turns all of these liabilities into assets. If Verizon could only get this single clue, it could be one hell of a company.

Thank you for bringing Verizon's ridiculous new fee out of the shadows.

Mark Frautschi

These financial and services companies better stop and think about what they are doing. People get very angry when they feel they are getting cheated by businesses that act like they should be so privileged to take more of our money which is getting harder to earn. The first thing that cheated, angry people do is demand more government to come down hard on these thieves. The party that is perceived to be in the back pockets of the banksters will lose votes to the other side. (Fellow commenters, this next statement is not an advocacy, it is a warning.) You can demonize the one one side for being socialists, but when given a choice between do gooder socialists or theives which one will be the populist choice?

I would be interested in what various parties mean by "paying online". I pay almost ALL my bills via online bill pay from my bank-this means I control the amount and the date of the paper check or electronic transfer that Metavante creates for me. Since I generate the payment via my bank's website and it's links, I don't see any additional charges from banks, towns or mortgage holders. I also have a central site for all my record keeping-who wants to jump site to site just to pay a bill?


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