This screed is a plea to be free from hidden fees. Oh, how we hate them! In 2006, the Ponemon Institute conducted a study in which it discovered that every year, any given adult likely pays close to $942 in hidden fees and surcharges. Most of these surcharges will be spread out over large numbers of smaller products, with the actual hidden fees being quite small in value, as well. But government action has been unable to keep up with the burgeoning hidden fees. It’s gotten so ridiculous that President Obama’s National Economic Council lashed out against “hidden fees” charged by airlines, hotels and other businesses at the end of his tenure. So you’ve got to begin to protect yourself from the “gotchas” that so many companies have begun to embrace — most recently, the airlines.
Airline fees: In recent years, the airlines have jumped whole hog onto the hidden fee bandwagon. The extra fees that airlines now charge passengers—for everything from in-flight snacks to choosing a window or aisle seat—can accrue alarmingly fast. And when you can easily find yourself bumped from an overbooked flight, or sitting inexplicably on the tarmac for hours without taking off, they can seem like insult added to injury. And this trend isn’t changing anytime soon. An annual report for Spirit Airlines noted that in 2013, the budget airline reaped more than $668 million in non-ticket revenue, increasing that category from a little over $2 per passenger to more than $50 per passenger. United Airlines just announced plans to join Frontier, Allegiant and Spirit and begin charging passengers for carry-on luggage!
- Consider shipping your luggage. Ground transport via UPS, FedEx, or even Express Mail can cost less than checking at the airport—and makes tracking lost bags much easier.
- Refuse to pay extra for seating: Get to the airport a bit early and go immediately to the gate where you can ask to change your seat to something a bit more comfortable.
- Leave your pet at home. A good pet-sitter is often more economical than the stiff fees (usually more than $100 per one-way flight) required to bring animals on board.
- Pay fees in advance online. The good old-fashioned method of calling an airline to reserve by phone can now cost up to $35. You can usually minimize those fees if you pay them at booking time (with some airlines they are just $10 as opposed to $25 at check-in)
- Bring your own snacks, travel blanket, and pillow in your carry-on. And if you shell out once for a set of headphones, keep the adapter plug to bring with you on your next same-carrier flight.
- Don’t discount the “discount” airlines. Southwest Airlines, for example—long considered a budget option—is actually one of the only domestic carriers that doesn’t charge any extra fees.
Bank Fees: Like the airlines and utilities, the retail banking industry has been using nit-picky fees as a way of generating more revenue. Last year, banking consumers paid out $32.5 billion in bank charges and penalties. Initially, it started with overdraft fees in the 1990s. Then ATM fees started skyrocketing in the 2000s. Now, banks have large lists of fees – some as many as 50, just for checking accounts.
Free Yourself: We recommend that you try to find online banks that don’t rely upon gimmicks. A discussion of these preferable checking accounts can be found at our Gimmick-Free blog. And a new app will also help you find the best checking account for you. After all, the best way to show your dissatisfaction is to take your business somewhere else. That sends a message that even banks will get…..eventually. And if you have been subjected to bank fees that you believe to be unfair or misleading, we strongly recommend that you file an online complaint with the Consumer Financial Protection Bureau. It takes but a few minutes but has proven to be very effective in forcing banks to return any contested fees.
New car fees: You negotiate what you think is a fair price for a vehicle and then go into the sales office to write up the deal. There consumers often get sideswiped by a variety of bogus charges that can add thousands of dollars to the purchase price. Dealerships can add as much as $999 for “documentation fees,” that supposedly reimburse the dealership for filling out purchase paperwork, according to the AutoFraud Legal Center. Some states limit these fees to as little as $75. In other states, the fee is completely at the dealerships discretion. In addition, some dealerships also levy “floor plan” fees; “dealer preparation” fees; advertising, destination, delivery and processing fees. All are discretionary.
Free Yourself: Before heading out to a dealership, go to RealCarTips’ average documentation fees and know whether you are overpaying. Then make sure to ask the dealer about these charges while you’re still in the process of negotiating the deal. Factor those costs into the price when making comparisons. If you don’t like the negotiating process may also benefit from services, such as Costco’s (COST), that prenegotiate the price of vehicles at a set level below invoice and demand clear and upfront disclosures.
Event ticketing fees: So-called “convenience,” “processing” and “service” fees can add as much as 21 percent to the price of a concert or sporting-event ticket, with Ticketmaster being among the more unconscionable violators. Ticketmaster fees are among the largest unavoidable levies in the consumer marketplace, amounting to some $1.6 billion in added costs, according to government agencies. They’re unavoidable because many venues no longer provide their own ticketing services, leaving the consumer to deal with third-party vendors that charge these fees.
Free Yourself: If the concert/event operator doesn’t provide a way to get tickets without added service fees, the only current recourse for consumers is to forego the event or complain to authorities. Complaints may not help with the immediate purchase, but they could be effective in the long run. The New York attorney general, for instance, has already suggested that these fees may violate New York laws. Additionally, if not clearly disclosed in ads, these mandatory fees may also violate Federal Trade Commission (FTC) rules regarding deceptive disclosures. Both agencies — as well as most other government offices — offer an online complaint process that can be completed in minutes. We recommend services like Brown Paper Tickets, which charge few, if any, fees.
Resort fees: These were once relatively rare add-ons that covered extras, such as beach-side cabana service and luxury hotel gyms. Now, they’re so commonplace that it’s difficult to book a hotel in a tourist mecca, such as Las Vegas, without facing added fees that can range from $10 to $100 a night. Honest hoteliers who disclose the full cost of a stay upfront are put at a disadvantage by these sneaky levies, which are often collected at the end of the hotel stay or added on like a tax when the consumer is paying for the booking.
Free Yourself: Shop carefully, making sure to review the fine print at online booking sites for any additional fees that might be added to the advertised price. Save a copy of the disclosures, if a fee is added later. The FTC and some members of Congress are now calling for “all-in” hotel pricing, noting that while hotels say the fees are for extras, such as coffee in the room and other amenities, the charges are mandatory. Consumers can’t simply decline them as they would for other extras, such as room service. Adding mandatory fees that weren’t disclosed before booking is likely a violation of Unfair and Deceptive Practices acts, which are overlaid in both state and federal laws. If you’re hit by one of these fees, complain to the FTC and your state consumer affairs department.
Telecommunication fees: Couching added charges as “regulatory cost recovery” and “administrative” fees, telecommunication companies often deceive consumers into believing that their bills have been inflated by government taxes, when these fees actually go to the phone and cable companies themselves. Calling the big four — AT&T (T), Verizon (VZ), Comcast (CMCSA) and Charter — an “oligopoly on steroids,” is probably now an understatement. Many companies, including Time-Warner and Comcast, now charge broadband customers a monthly fee to rent a modem, usually around $6 or $7
Free Yourself: Unfortunately, while you can comparison shop for cell phone service, the chance of having choice when it comes to telecommunications or internet services provided at home is increasingly rare. It is expected that even more mergers will occur with the incoming Trump Administration. If you have a choice of cable, TV, phone and internet providers, shop around or, better yet, cut the cable cord. We show you how. If you have no choices and feel you’re being overcharged and underserved, look into using new high tech antennas to get your TV for free.