So-called “junk fees” – also known as service charges, termination fees, convenience fees and administrative costs – can take you by surprise, turning a good deal into a ripoff. While the federal government has recently taken aim at such fees, it’s up to you, the consumer, to read the fine print and beware of hidden charges. Here are a few tips.
Where to look for junk fees
Hidden fees are often buried in the tiny type of an agreement. Many show up at the end of the transaction.
- Service charges are tacked onto the advertised price. Essentially, the company hides the actual price of the good or service by offering a discount, then regaining the real cost with added fees.
- A package of additional products or services the consumer didn’t ask for is “already installed” and cannot be removed. Car dealerships are prone to this.
- Early termination fees if a consumer isn’t satisfied with the service and cancels.
- Airlines may charge extra for luggage, seat assignments, food and other amenities once considered part of the regular ticket price.
What you can do about hidden fees
- Research companies before hiring them. Check online reviews but be savvy about it. A 5-star average on 400 reviews means something, but a 5-star review from a handful of customers doesn’t hold as much weight.
- When negotiating with a salesperson for a product or service, ask for a complete list of fees, taxes and service charges that will be added on to the advertised price.
- Challenge any surprises and be willing to walk away from the deal. The prospect of losing the deal often motivates a seller to waive some charges.
- After the salesperson gives you a final price, carefully read the agreement before authorizing it. Don’t be hurried into signing before reading the fine print.
After the agreement
Keep your records. If the agreement is signed digitally, request a digital copy and file it for safekeeping.
With any monthly service, such as cable or cell phone coverage, read your bill each month to ensure you didn’t miss anything during the sales process. Call customer service and dispute any surprises.
When you have a complaint
Contact the vendor and request a financial remedy. If that doesn’t work, ask to speak with a supervisor. Always maintain your composure. Finally, document your conversations, including names and dates.
If these steps don’t work, go outside the organization. The Better Business Bureau, the consumer arm of your state attorney general’s office or a state agency that regulates the business in question are all potential resources.
For example, if you file a complaint with the BBB, the organization will contact the business and seek to mediate a settlement. Cooperate with that process. If the offending business makes a reasonable effort to work with you, even if it means a compromise agreement, the BBB will note that for future consumers visiting its site. The complaint history is on the BBB site for future consumers to see.
The Federal Trade Commission, which is currently working on making it easier to cancel monthly subscription services, also offers tips, sample complaint letters, and other ideas on handling problematic businesses.
Related – Plugging a Budget Leak: Review Your Subscriptions
