How to get even with companies that ‘fee’ you to financial death

I went to pay my slightly overdue phone bill the other day. I know I should get to it earlier, but working as many hours as I do, sometimes it’s hard to keep track of the days.

So I attempted to rectify the situation immediately and pay my phone bill in full by phone on my debit card. It seemed like the fastest, most reliable way to make sure they got paid. No muss, no fuss—right?

You’d think I’d just call them up, type in a whole bunch of numbers, and that would be the end of that. It should be even cheaper for the company for me to pay them that way, since it’s not even necessary for me to take up the time of one of their paid customer service representatives. I type in all the numbers for them, saving them the trouble and expense, and their computer does the rest. They might have to pay some IT folks to maintain their computer system, but it’s far less than paying customer service representatives to each individually take care of people like me who want to pay by phone, so they undoubtedly save money. The automated system is also more secure and makes it nearly impossible for someone to casually get hold of credit and bank card numbers, reducing the chance of identity theft and therefore liability for the company.

So, when it’s presumably cheaper, safer and easier for the company to process automated credit and debit card payments, and also presumably, reflected somewhere in my bill are overhead costs for that system and also any customer service from a live representative I might actually require, why do they charge an additional $3.50 fee to pay my bill by phone? This is not part of any late fee; this is a charge for the “convenience” of getting them their money as quickly as possible.

This is sort of similar to the gambit banks have been getting away with for the past bunch of years—charging exorbitantly for ATM use.

At one time, banks often charged either a flat monthly fee or a per use fee for ATM usage. But still unsatisfied with the elimination of having to pay the salary of a live teller for many common transactions, banks now often charge a fee for using an ATM that is owned by anyone other than themselves. In addition, the ATM owner may charge a user fee, so the consumer pays both institutions for the “privilege” of accessing their own cash.

While it may seem petty to complain, large corporations make a ton of money on such transactions. Such fees may seem small—a dollar here, 75 cents there, a surcharge of a few more dollars there, but over time, it really adds up, and from a percentage standpoint, it’s beyond exorbitant.

Take very a typical ATM transaction as an example—you need quick $20 cash. So you hit the ATM, but a branch of your own bank isn’t in sight. When you put your card in the slot, the “foreign” machine tells you that an extra $1.50 will be deducted from your account—do you agree? Probably not, but you also probably have little choice since you want your money. Later, when your bank statement arrives, you may notice you’ve been charged again, this time by your own financial institution, for using that “foreign” ATM that has already charged you. Let’s assume your bank is more “merciful” than the ATM owner and “only” charges you 75 cents for accessing that $20. You’ve now paid $2.25, or more than 10 percent of the amount to access your own money—which may be more than your credit card charges in interest for a cash advance that’s paid back promptly.

Assuming a person takes money out under those circumstances just once a week, more than $100 will be paid out annually just for accessing one’s own money—all while saving those banks a ton in salaries for live tellers.

And, the idea to charge a fee for live teller transactions has been kicked around (and even implemented in some places) leaving consumers to pay every time they do anything at all with their own money. Depositing? The bank gets a little bit.

Want some of your money back? They get a little bit more. Need help figuring out your account balance? We bet you do—and it will be a little less still when we charge you a teller fee to tell you how much money you no longer have. What a great idea—at least, if you’re a bank.

It’s enough to make one want to skip financial institutions entirely and revert to the mattress method.

But getting back to my dilemma with the phone company, I did the next best thing—I hung up instead of agreeing to their $3.50 fee and paying them. I decided to call them back and have a nice long, free chat about my dissatisfaction with their system with the a real, live, salaried member of their customer service department.

I made sure it took 15 minutes to very politely tell them I felt their $3.50 fee was a bit unreasonable and that I would be stopping by their office in Bethlehem on my way to work to pay them in cash. It was very entertaining, even if the representative was a little confused.

I figure since a portion of my bill is undoubtedly earmarked for such overhead that I pretty much never use, I need to rectify the situation and balance things out. I am considering making a habit of it, and calling my phone company (and any other service institutions I do business with that overcharge for basic functions) on a monthly basis just to say “hi” and see how things are going. I may not be able to charge them a fee back, but I can make sure I get my money’s worth, and perhaps a little entertainment too, at their expense.

(Originally published in The Easton News, February 15, 2007)