You’ve got to pay your bills each month but can you imagine actually paying EXTRA just to make that payment? Yes, we're talking about you being charged just to pay your bills! We found it’s happening across the country. But who’s charging? When is this allowed? When is this just illegal? And how can you fight back?
Homeowner Jessica Aguiar knows all about it. She thought picking up the phone to make her mortgage payment directly with her bank would be no problem, until it tried to hit her in the check book with an extra fee. “They said it would be 20 dollars, and I was just a little bit angry and shocked.”
Galtime found Jessica’s mortgage company is one of many businesses now making money by charging customers to pay their bills over the phone and even online. It’s called “paying to pay” and it’s frustrating to Jessica, who tries to pay her bills on time each month. “If they're charging me to speak to a customer service rep that I’m already speaking with I think that's ridiculous.”
We uncovered banks, utility providers, phone and cable companies hitting customers with fees ranging from $1.99 to $25.00 for dialing up a customer service representative or even using a company’s website to make a payment.
USPIRG consumer advocate Ed Mierzwinski thinks it’s outrageous.“It’s just unacceptable that businesses charge you a fee for the privilege of paying for the service that you're already paying for.”
Unacceptable, maybe, but it is LEGAL for mortgage, utility, phone and cable companies to charge you to pay by phone or online.
BUT when it comes to credit card companies, courtesy of the recent Credit CARD Act, it’s ILLEGAL to charge a fee for paying unless you’re asking the bank’s customer service rep for an “expedited payment.” What’s that? That means any payment that needs to be immediately posted. Like it’s due that day.
We called banks that issue credit cards undercover and our survey revealed some still aren’t following the law. One told us:
"ANYTIME YOU MAKE A PAYMENT WITH A REPRESENTATIVE IT’S 10 DOLLARS."
That’s just wrong.The company can only charge if you want the payment to be credited to your account ASAP.
What the heck are these fees for? Banking industry officials told us the charge covers the cost of doing business and the fees intended to help cover the cost of the workers’ wages and benefits.
When we asked one national cable company why it charges fees to pay by phone and online it told us:
"CONVENIENCE FEES ARE ASSESSED TO OFFSET THE COST OF TECHNOLOGY RESOURCES TO SUPPORT THE TRANSACTION."
It was quick to point out it’s not the only business charging:
"MANY OTHER COMPANIES INCLUDING UTILITY COMPANIES, CREDIT CARD COMPANIES, PHONE COMPANIES AND OTHERS CHARGE “PROCESSING FEES”. MOST OF THESE COMPANIES CHARGE USUALLY BETWEEN $5.00 AND $25.00."
Consumer advocates balk at this and say most businesses and credit card companies have reps on duty 24/7 so paying last minute shouldn’t cost more!
How can you avoid paying to pay?
Try to pay early with a check or online through your own bank’s online bill pay service. That way you don’t have to enlist extra help, or fees, for a last minute payment.
If you think you were wrongly charged a fee by your credit card company file a complaint with the US Office of the Comptroller of Currency. For complaints about a local credit union or state chartered bank, contact your state’s division of banks.
If you ever need to fight your bank on when it can charge you, here's the specific text of the Credit CARD Act which prohibits charging fees, unless it's an expedited payment:
‘‘(l) LIMIT ON FEES RELATED TO METHOD OF PAYMENT.—With respect to a credit card account under an open end consumer credit plan, the creditor may not impose a separate fee to allow the obligor to repay an extension of credit or finance charge, whether such repayment is made by mail, electronic transfer, telephone authorization, or other means, unless such payment involves an expedited service by a service representative of the creditor.’’.
Location Title 1 Section 102
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