Why Verizon's introduced a new $2 fee
Steve Chiotakis: 2011 has been the year of the uprising. Protesters drawing attention to Wall Street chicanery, or customers complaining about being nickel and dimed. Bank of America knows all too well about the hazards of fee implementation, after its debit card fee fiasco. And now phone company Verizon is getting an earful from its customers over a proposed new charge. It would add two bucks each time a customer makes a one-time online or phone payment.
Marketplace's Nancy Marshall-Genzer is with us live with the latest. Hey Nancy.
Nancy Marshall-Genzer: Hey Steve.
Chiotakis: So, how similar is this outrage compared to the backlash over at Bank of America?
Marshall-Genzer: It's very similar. The two companies gave the same rationale for the fees. Remember Bank of America said it was losing money on its debit cards, so had to charge a monthly fee for them. Of course, it never implemented that fee because of that consumer backlash. Now Verizon is saying it has to pay more to process one-time payments, so it has to charge more to make up for that.
Chiotakis: Is the fee warranted then, if Verizon is losing money?
Marshall-Genzer: Verizon certainly thinks so. But it is facing quite a backlash on the web. Twitter is just exploding with complaints -- many of which I can't repeat on a family show like Marketplace.
I think part of the problem is people don't fully understand the fee. If you're in an automatic payment program you won't be affected; if you pay by check every month, you won't pay more either. The fee is just for people who call Verizon to pay their bill, or make a one-time payment online.
Chiotakis: One-time payment -- who's going to be hit by this the worst, Nancy?
Marshall-Genzer: Consumer advocates say it's going to affect the people who can least afford it, people who have to choose which bill to pay every month.
I talked to Mark Cooper about this. He's the head of research for the Consumer Federation of America.
Mark Cooper: Verizon now looks at these people and says well, I want to get the same rate of profit off of them I get from my high-end customers. And also, Verizon may be telling these people, you know what? Go someplace else. We don't want your business.
Keep in mind that, even if these customers wanted to go someplace else, there aren't a lot of choices.
Chiotakis: OK. Marketplace's Nancy Marshall-Genzer in Washington. Nancy, thanks.
Marshall-Genzer: You're welcome.