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Paying... to pay your bills
Online shopping made easy?
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TEXT OF INTERVIEW
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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I would love it if all (e.g.) Verizon customers who currently pay they bills online opted to pay their bill by mailing them a check. When Verizon staff had to open all those envelops and process each one of those checks by hand, now that would be sweet revenge.
My QWest phone bill got lost in the mail somewhere so I called them to get the amount deducted from my checkbook. They informed me if I used my debit card or my checking account directly, they would charge me $4. I decided to write a paper check and hope it would get to Phoenix in time...5 days. It did.
I hope this sort of nonsense will eventually be addressed by the agency Elizabeth Warren has been appointed to design.
If you even wonder why we have the extreme concentrations of wealth and income, keep this in mind as one of the contributors.
It is also known as theft, in my humble opinion.
Last year T-Mobile announced that it would institute a “Paper Bill Charge†for anyone not paying online with Easy Pay or authorizing recurring deduction. The idea was laudable as a sustainability initiative, however it failed to allow the customer to review a bill prior to making payment; this is an essential right that must be preserved. Also, T-Mobile should have phased in what was essentially a contract change at the end of their customers’ contract periods.
Fortunately, they backed off and subsequently expanded a more cooperative approach with banks offering billpaying services by EFT. (In my case this only occurs after reviewing the bill.) I find the greed for personal consumption information to be even more egregious than tacking on sham service charges.
These charges aren't confined to the commercial sector. Because of the vendor's negotiating skill, I can "go green" and renew my vehicle registration online for a convenience fee of $1.00, or I can save the dollar and make the fifteen mile round trip to the tax assessor's office.
A parallel, in my view, is the high fee charged to file income tax reports electronically. I print mine and pay the postage because it is less expensive for me. Yes, I know it costs more for IRS and California's Franchise Tax Board to process the paper and that cost is shared by all taxpayers. Let's create a win-win-win by reducing payer out-of-pocket costs, processor costs, and environmental costs of unnecessary paper. And don't be fooled by the tax preparing software companies who advertise Free E-filing. Once you are hooked on a product, their pricing strategy over time has been a mix of 1. raise the package price inclusive of E-filing or 2. separate the E-file service to create a new profit center.
The greed of the corpocracy is only exceeded by their ingenuity to screw us! By the time this has become implemented and knowledge of it becomes so widespread that the FCC or some other agency rules against it, the banks, etc., will already have created some other way to steal our money.
My mortgage company charges a $12.00 fee to make an on-line payment. I called them and told them that as long as they planned to charge me a 'convenience fee' that I would continue to pay by check. That way, THEY pay to apply my payment. Seems fair to me!
I don't like having to do that, but I refuse to give them more money than they are due. It costs them virtually nothing to accept my payment electronically.
This is another example of the 'hidden' fees these organizations are using to keep profits up since the credit rules were changed.
Great story! Just wanted to add this point that everyone should be aware of: the reason that you don't want to opt-into automatic electronic bill payment is because under the Uniform Commercial Code, you cannot shut off the bill payment if there is ever a problem. Only the billing party is allowed to do that. So, doing automatic bill payment is giving your bank, cell phone company, etc. to access your account and dip into your funds with almost no constraints. What a wonderful world we live.
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