Tips: Avoid paying to pay



Posted on December 8, 2010 at 12:32 AM

Jessica Aguiar thought picking up the phone to make her mortgage payment directly with her bank wouldn't be a big deal. It wasn't, until they tried to hit her with an extra $20 fee.

"They said it would be 20 dollars, and I was just a little bit angry and shocked," she said.

Jessica's mortgage company isn't the only business adding fees just for paying bills over the phone. We call it "paying to pay".

"If they're charging me to speak to a customer service representative that I'm already speaking with I think that's ridiculous," she said.

One survey found banks, utilities, phone and cable companies hit customers with fees ranging from $1.99 to $25, all for just paying over the phone and for using the company's website.

"It's just unacceptable that businesses charge you a fee for the privilege of paying for the service that you're already paying for," said Ed Mierzwinski, USPIRG.

Guess what? It's legal. Mortgage, utility, phone and cable companies can all charge you to pay by phone or online.

"The fees intended to help cover the cost of the workers wages and benefits," said Nessa Feddis with the American Bankers Association. "Frankly, $10 doesn't sound like a lot when you think about how, you know, it's probably 10 or 15 minutes for that customer rep."

One company says the extra fees offset the cost they pay to support the transaction, but consumer advocates don't buy it. They say most businesses and credit card companies have reps on duty 24-7, so paying last-minute shouldn't cost more.

"The banks already had those people working on the phones and, if they're not collecting payments, they're trying to sell something else," said Mierzwinski.

Here's how you can you avoid paying to pay. First, pay early. Use a check or directly through your bank's online bill pay service. That way you don't have to enlist extra help or fees for a last minute payment. Really, the bill ball is in your court.

Remember, not all businesses can charge you a fee for paying last minute. Credit card companies can't unless you ask for an "expedited payment" to a customer service rep. If they do, file a complaint with the feds, and let me know about it.