Verizon Backtracks On $2 Convenience Fee

Velcroman1 writes with a followup to yesterday's news that Verizon would be implementing a $2 'convenience fee' for certain online and phone-based bill payments. In addition to dealing with outrage from customers, Verizon also felt resistance from the Federal Communications Commission, who decided they would investigate the matter. Today, in a brief press release, Verizon announced that they've canceled their plans for the new fee in response to customer feedback.

Comments

Don't you love asshats

[Anonymous Coward]

That charge you for the privilege of paying your damn bill! GAHHHH!!!!!

Re:Don't you love asshats

[Anonymous Coward]

Really it was just a thinly veiled attempt to force customers onto their auto-pay system because if you switched to auto-pay they waived the fee.

Re:Don't you love asshats

[QuantumLeaper]

That what my Gas company does, they go though a 3rd party to pay online, but if you auto-pay you don't get charged the 3rd party fee....

Re:Don't you love asshats

[LifesABeach]

Just a thought, but I was under the impression that charging a fee for accepting a credit card for purchases was illegal. I guess some grinning show off at Verizon found a loop hole. Calling it a "convenience fee?" Go figure.

Re:Don't you love asshats

[pclminion]

Just a thought, but I was under the impression that charging a fee for accepting a credit card for purchases was illegal.

From what I understand, you are permitted to charge a fee for a credit transaction but only if it is a flat fee not based on the transaction amount. Around my location it is very common for places to charge $0.35 for a debit/credit transaction.

Re:Don't you love asshats

[mysidia]

you are permitted to charge a fee for a credit transaction

You can charge lots of fees, but you may not charge a fee for using a credit card, or you would be in violation of Visa and Mastercard guidelines, and subject to losing your privilege of processing MC/Visa, if your violation were reported by your customers:

From Mastercard credit card acceptance guidelines

Charges to cardholders. A merchant may not directly or indirectly require a cardholder to pay a surcharge or any part of the merchant processing fees charged in connection with a transaction. However, fees are allowable if they are charged regardless of the form of the payment, and merchants can provide a cash discount.

Minimum/maximum transaction amount prohibited. A merchant may not require, or indicate that it requires, a minimum or maximum transaction amount in order to accept a valid and properly presented MasterCard.

Re:Don't you love asshats

[kidgenius]

Umm....you didn't read your quoted section entirely. If I am a vendor and only accept credit and cash, I charge everyone the same amount, and give a cash discount. I have thus just charged a credit fee.

Re:Don't you love asshats

[speculatrix]

Dear Verizon,
From 1st January I will be charging you for $2 for reading the bills you send me and making the payments on time, this is a convenience fee to you as it means you will not have to chase me for late payment.

I am also charging you a fee of $10 for writing this letter to inform you of the change. If you wish to call me and discuss it, I will charge $50 per hour for the discussion, or $30 for reading any letters you send and replying to them.

love
a customer

Re:Don't you love asshats

[antifoidulus]

Yeah, which gives them plenty of opportunities to gouge you with either erroneous fees or overages that they hope you will not notice. That was the real motivation.

Re:Don't you love asshats

[Anonymous Coward]

For all the furor over Verizon, there are multitudes of companies (Kentucky Utilities, BOA, my local water company, etc.) that do this.

Worse, they frequently don't give a sufficient grace period to pay the bill without accruing late fees (especially if you travel on short notice a lot), so you are left with either paying that or for the honor of paying by phone.

Of course, they don't offer automatic bill pay through your credit card (only complete access to your bank account will do), and have even been told by a Bank of America representative that it is illegal to pay a debt with a credit card (WTF!?) as the reason they don't offer automatic bill pay with a credit card, but will happily charge you $25 for paying by phone.

It would be nice if there were investigations into the seedy billing practices of companies (hell, one time I tried to return an item to Guiry's in Colorado, to which they took the item and stated they would issue me a check. Much later, they claimed I stole the item and apparently the sales receipt as well, and refused to return my money. Lesson learned- only pay through a credit card), but since companies are Super Citizens, they get to float all manner of shady practices and only a few get caught in the limelight for their sleaziness.

And especially with the utilities, since they are the only game in town, you will comply with their terms.

Re:Don't you love asshats

[Fnord666]

It seems you're correct. If that's the case, there are literally hundreds of convenience stores and gas stations around here that are violating their merchant agreements. Maybe I ought to make a weekend event out of reporting as many of them as I can to VISA...

I ask the merchant if they are allowed to charge a % fee for using a credit card. When they say that they can, get them to itemize it on the bill of sale. Once you have that, dispute the fee with your credit card company and get them to reverse that part of the transaction. Worked every time so far.

Re:Don't you love asshats

[EdIII]

It's a completely illegal practice as far as the contracts are concerned, but wide spread. Ethnic store owners are the biggest violators. Every time I went down to China Town, the Korean markets, Mexican grocery stores, .etc, the signs were (still are) prominently displayed. $10-$15 minimum for credit and $1.50 for the transaction.

In fact, I view it as a sign of an upcoming bubble that will burst with the credit card debt that more ethnic store owners even accept credit in the first place. 9/10 places I went for pho and dim sum did not accept credit cards at all just 3 years ago. They all do now and I believe it is because their customer base ran out of disposable cash income and needed to start running up credit just to live.

I totally understand it. The idea of credit is bullshit to most Chinese people I know and they think it is crazy to rack up debt like that. It's a cultural thing. Why does VISA get 3% of my revenue (not profit) just for being there? Fuck that shit. Cash mother fuckers. Cash. I am paraphrasing a friend who owns a tea shop.

It's not that Verizon was trying to pass off the cost to the consumer (which is ultimately passed off anyways via a raise in commodity prices), it's that they were also penalizing online transactions. Going paperless and paying online actually saves them a considerable amount of money and manpower. I thought that was the whole point?

Somebody that big and visible trying to get away with it was just foolish. They are a giant compared to the small little grains of sand that the convenience stores are.

Don't bother reporting the small guys to VISA for doing it to you. One way or the other you are paying for the ease of settling your debt. Debit fucks you to your face. Credit fucks you from behind. Either way, you are getting fucked.

Cash and cash discounts are the best way to live. Which is why I respect the small ethnic places so much. They are willing to give you the discount because they are acknowledging the bullshit of the costs as they see it. Better than not getting a discount.

 

Re:Don't you love asshats

[Mia'cova]

The recent financial reform bill explicitly made it legal to charge different fees on different methods. For example, having different fees for visa and american express cards. The financial reform bill overrules whatever you find in the guidelines produced by the credit card companies. That said, I believe your source is dated prior to the new law coming into effect.

Re:Don't you love asshats

[Mia'cova]

The new financial reform bill makes it legal to charge up to a $10 fee for any method of payment. They can also do cash/check discounts. Basically, it ensures this is legal such that retailers can set fees/discounts to ensure they aren't losing money on certain low-value transactions. Also, by now being able to set fees for one brand of card differently from another, it fosters some competition. So we might see higher fees on visa/mastercard than debit for example.

Re:Don't you love asshats

[AngryDeuce]

The idea of credit is bullshit to most Chinese people I know and they think it is crazy to rack up debt like that. It's a cultural thing. Why does VISA get 3% of my revenue (not profit) just for being there? Fuck that shit. Cash mother fuckers. Cash. I am paraphrasing a friend who owns a tea shop.

Cash is also great when you're trying to hide income from the IRS. Not saying that your friends are trying to cheat the government, but it's certainly much easier when there is no paper trail. A family acquaintance owns a few laundromats and has openly bragged to us about how easy it is to funnel money out of there without anyone knowing anything because it's completely cash-based.

Maybe they're bullshitting, maybe not...just repeating what I was told.

Re:Don't you love asshats

[EdIII]

Well it can be easier to hide income from the IRS with cash. However, you have to track your commodities and collect state sales tax too. If you review your consumption of commodities it is not that hard to see a massive discrepancy in cash revenue declared versus what should be received. In a situation like that your margin for profit on undeclared revenue is pretty small if you want to remain reasonably safe against an uncomfortable audit.

Laundromats could be easier since customers bring in their own soap and all you have to account for is water and electricity usage which could vary wildly. Not like you track each purchase with coin counters or anything.

Strip clubs are the most famous since that is nearly impossible to track. The booze is only a small part of the business overall.

However, most business owners I know are not trying to cheat the local government out of sales tax, or the federal government either. Their big problem is understanding why VISA should get 3% of revenue when VISA does not mop the floors, wash the dishes, or cook the Kung Pao chicken. VISA gets 3% for doing absolutely nothing for them.

I have a hard time understanding it too. Percentage based is a fucking ripoff and a half. It's only that high partially because of fraud.

- 3% of revenue
- 14-29% interest rate on debt
- yearly fees

Just how much do they fucking need for running a transaction? It's not like they really care to do it that securely either.

So I completely understand the thoughts that different cultures have when they look at it, even simplistically, because at the end of the day VISA is doing nothing for merchants other than providing a different payment method.

For small retail shops it just does not make a lot of sense to them when they personally interact with the customer and carrying a small amount of $cash around should not be out of the ordinary. It's not like it stops people from getting mugged to have no cash on them. They still lose their wallet, identification, and have to cancel all their cards. In fact, if you kept a small amount of cash on you, in a bill fold, separate from your identification, you could mitigate a lot of that frustration in the first place.

Which is why I mentioned the bubble. Those same business owners that would never touch a merchant account 3 years ago turned to me for help because, in one guy's own words, "my customers don't have that much money anymore. VISA still has a ton of money to give me".

VISA makes sense for online transactions where you can't take cash, don't want to mess around with checks (even though I work with payment processors that can do it in real time), and need an easy way to take money. For anybody reading this, check transactions don't run on a percentage. Just expect about 50c to a $1 per transaction to run it. That includes account validation and available funds validation in real time. You still have the risk they write too many checks until yours clears, but the risk of that $25 bank fee is well mitigated.

3% for credit cards online is still steep, but you can wrap that up in the price of the commodity or service and hopefully it all washes out with your competitors.

 

Re:Don't you love asshats

[Renraku]

Auto-pay is hilarious. All my friends have had trouble with it but continue to use it. "Oops, my mistake!" they say after they plunder your bank account for $500 because they billed it multiple times. "Here's your $500 back, less the bill you owed..and you're still in the red because your bank hit you with a couple of overdraft charges!"

Big Red Will Still Get Their 2 bucks

[greyline]

They may have backtracked on this "convenience fee", but Verizon will still get their $2 from their customers, just not as obviously.

Re:Big Red Will Still Get Their 2 bucks

[hawguy]

I'll bet that if you actually read the contract, it won't say how much you are going to pay, and that it is has clauses that allow changes to the contract with notice.

They wouldn't be breaching the contract (unless they wrote it very stupidly, and I bet their lawyers won't let them do that) any more than if you called up and said "I want to add this extra service, and I won't pay any more than the contractually agreed to price of $80."

I have read the contract, have you? I don't see anything in it that says they can make me pay for any non-governmental related surcharge:

What Charges Are Set by Verizon Wireless?
You agree to pay all access, usage and other charges that you or the user of your wireless device incurred. For Postpay Service, our charges also include Federal Universal Service, Regulatory and Administrative Charges, and we may also include other charges related to our governmental costs. We set these charges; they aren't taxes, they aren't required by law, they are not necessarily related to anything the government does, they are kept by us in whole or in part, and the amounts and what they pay for may change.

And while they can change the terms of the contract and the prices I pay, if they do, I can cancel my contract without an ETF if it affects me an a material way, and a $1 surcharge on all payments sounds like a material effect:

Can Verizon Wireless Change This Agreement or My Service?
We may change prices or any other term of your Service or this agreement at any time,but we'll provide notice first, including written notice if you have Postpay Service. If you use your Service after the change takes effect, that means you're accepting the change. If you're a Postpay customer and a change to your Plan or this agreement has a material adverse effect on you, you can cancel the line of Service that has been affected within 60 days of receiving the notice with no Early Termination Fee.

Re:Big Red Will Still Get Their 2 bucks

[Grishnakh]

When the libertarians get their way and eliminate all government regulation, we'll see that. It'll be just like that shining bastion of Free Market economics where The Invisible Hand reigns supreme: Somalia!

Re:Big Red Will Still Get Their 2 bucks

[bill_mcgonigle]

Somalia is Better off Stateless.

great

[larry bagina]

I have not canceled my offer for them to lick my asshole.

And...

[Pharmboy]

...they will no doubt try to make themselves looks a hero for not screwing us over by adding that charge. Yes, us. I was already looking at other carriers, only for the principle of charging us more for costing them less.

This is as bad as when the phone company charged $4 a month for "touch tone service" when it actually costs them less to provide it than to deal with pulse dialing.

Re:And...

[Obfuscant]

This is as bad as when the phone company charged $4 a month for "touch tone service" when it actually costs them less to provide it than to deal with pulse dialing.

Back when this was a regular charge, it did cost more to provide touch tone dialing. They had to add the DTMF-to-pulse decoders to existing systems. About the time that the old step-by-step hardware was replaced by something more modern (crossbar) and the pulse decoding became the more expensive part, the special charge for DTMF was removed.

Re:And...

[quacking duck]

Not in Canada, where Bell still charges about $4 for touchtone service. My parents are grandfathered into a plan without this fee (they dial out pulse, and can then switch to touchtone if they have menus to navigate), but for all new traditional landline connections it's a non-optional fee.

Just another reason I ditched my landline when I finally got a cell phone.

Saw This Coming

[kaellinn18]

When are these idiots going to realize that bullshit charges like this aren't going to fly anymore? First Bank of America with their ridiculous ATM card fee and now Verizon with this. Consumers are finally waking up, and they're tired of what basically amounts to theft.

Re:Saw This Coming

[AthanasiusKircher]

When are these idiots going to realize that bullshit charges like this aren't going to fly anymore? [snip] Consumers are finally waking up, and they're tired of what basically amounts to theft.

Sort of. The thing is, most businesses bury such excess charges within general service fees anyway, if they feel like they want to make more money and are confident that enough people will pay for it. The "theft" will often happen anyway: it will just be buried in a general service fee rather than enumerated separately.

These itemized fees can go both ways. It depends on how many people want or use the itemized fee item. For example, for a long time, credit card companies were happy to charge ridiculous fees for people who were delinquent, along with other random penalty fees, as well as apply huge rate penalties, etc. Thanks to Congress last year, their ability to do this is much more limited. And thus my low fixed-rate credit cards went away, because their profits from me were no longer subsidized by the delinquents. (Not that I ever carried a balance anyway....)

For another example, people in my town seem, for the most part, to approve of the fact that the city makes over 1/3 of its budget from street-cleaning fines, because it uses an algorithm for setting street-cleaning dates that most people have trouble remembering. They could just bundle the city budget in local taxes instead, but they choose to make it off of forgetful people instead. Personally, I think it's more than a little immoral to charge more for tickets for obstructing a street cleaner than for actual hazardous parking activity (like, for example, parking too close to an intersection, and until a few years ago, parking too close to a fire hydrant), but maybe that's just me. (If there are any street cleaning fanatic defenders out there, be aware that last year due to a change in service, the street cleaners NEVER came by during the appropriate marked ticketing hours for a period of over six months... only later on the appointed days. My neighborhood suffered no unseemly build-up of detritus during this period at all.)

On the other hand, the change to an itemized fee-based structure for food on airlines seems a reasonable thing to me, particularly for short and mid-length flights where you don't necessarily need to eat a real meal. I'd prefer to have the choice of paying for a $10 crappy meal or not (and bringing my own if necessary), rather than having it bundled into the cost of my flight even if it's terrible. (I'd be even happier if the TSA would let me bring in whatever food and drink I want, rather than being forced to pay the airport premium for a lot of it.)

Anyhow, my experience is that consumers are actually rather accepting of such miscellaneous fees and fines, as long as they don't tend to apply to them very often. Companies (and governments) therefore often choose them over blanket fee increases. But even though many of them may be evil or immoral, I don't see a grand consumer effort to get rid of most of them... because a lot of people often benefit from them (as I used to benefit in my credit card rates).

Similarities?

[nikomen]

This may be slightly off-topic, but don't some Satellite/Cable companies do similar things? I seem to recall a particular provider charging $5/month if you didn't sign up for auto-pay and/or paperless billing. The reason was that they wanted to save trees. However, the same nameless provider would send mailers at least a couple times a month if you canceled their service, thereby negating the the "tree savings." Seems like Verizon and other companies are just trying to make another buck by taking advantage of their customer once they've been locked into a contract.

Re:Like GoDaddy

[nikomen]

The problem with boycotting Verizon is that there are few other (decent) options available. :-( With GoDady, however, there are many other choices.

Consumers, bend over, we'll screw you another way

[kawabago]

The entire phone system is wrong. Phone companies should be coming to consumers with ever cheaper prices for more bandwidth. Instead they keep finding ways to charge more for less. It is time for people to take control of their data needs and put cities in charge of data infrastructure just as they are for water and sewage. The phone companies could bid to manage cities data infrastructure within the limits set out by the people. This would put people back in control of their own infrastructure and take away the phone companies ability to over charge for service.

2011 year of the corporate fuck up?

[Nadaka]

Netflix, bank of america, Verizon, godaddy, etc. Is 2011 year of the corporate fuck up? Is it that corporations are making more boneheaded mistakes? Or is it that people are not willing to tolerate these boneheaded anti-customer mistakes anymore?

Re:2011 year of the corporate fuck up?

[Anonymous Coward]

You'll find 2012 to be much, much worse for the corporations. To answer your question: it is, of course, a combination of both. Corporate arrogance and greed reached a critical mass where they felt more and more like they could get away with anything. This caused them to make numerous mistakes. The consumer is becoming increasingly aware of how they are getting fucked over and are not tolerating it. There have always been people that are aware, but more and more people are becoming aware, so we have a critical mass of people.

Both causes amplify each other and cause the other. It's not stopping, and 2012 will be much, much worse for the corporations.

They need more competition

[Karmashock]

Whenever you see companies treating customers like garbage it means they don't have enough competition. That's all Verizon is telling us here. They're saying "you've basically allowed telephone companies to operate as local monopolies and so as monopolists we don't have to compete for customers."...

Simple as that. It's our own fault. If you don't like what they're doing then don't let them monopolize things anymore. Open up their area for more phone companies. Let other companies run telephone lines if they want in parallel. See if Verizon treats their customers poorly then... they'll be too terrified of losing them. As it should be...

Not the first time they've pulled this shit

[ArchieBunker]

Years ago when the FUSF telecom fee expired (to pay for the 1898 Spanish American War) Verizon decided to introduce a new fee that somehow just randomly was the same value as the old federal fee. They backed down pretty quick once the feds got involved but for christ sakes like John Stewart said "BE A PERSON".

Re:Way to plagiarize

[TheRealMindChild]

greylines sentence:

They may have backtracked on this "convenience fee", but Verizon will still get their $2 from their customers, just not as obviously.

Harry McCracken's tweet:

When Verizon says it won't charge $2 for online payments, it's saying it'll get $2 out of you in some less obvious manner. Some victory.

I see NOTHING plagiaristic. Having the same idea isn't the same as plagiarism.

Re:Why all the hostility against a la carte pricin

[dgatwood]

Yes. This fee screws the people who can least afford it. People who pay their bill online or by phone on a one-off basis are usually the people who are struggling to pay that bill at all. By charging those folks an extra fee, Verizon basically said, "Screw the poor." To which I say, "Screw Verizon."

Sure, those folks pose a higher risk of non-payment. That doesn't mean Verizon has the right to discriminate against them, and it certainly doesn't mean Verizon is justified in charging them extra fees that increase the risk of non-payment. They're basically starting to act like credit card companies, and need to be dealt with in the same way that we dealt with them—with harsh federal regulations that punish such behavior. It's really the only way to deal with companies that are so big that they feel unthreatened by competition.

Re:Definition of plagiarism

[mysidia]

But considering I put a nice little ;) at the end basically means I wasn't trying to stir up something all that serious

I would say plagiarism is a very serious matter, and allegations of the sort should never be tossed around lightly.

Re:Like GoDaddy

[Grishnakh]

You're a complete moron. GoDaddy never changed their mind.

Re:Yay FCC!

[Grishnakh]

Have you tried buying an HDTV-specific antenna?

When the signal works, you get either black bands across the top and bottom of the picture, making the effective picture area smaller, or

I never see this, because all stations broadcast in HDTV now. If you're watching on an old tube TV, then yes, you'll get letterboxing; that's the price of being obsolete.

An "expanded" picture that loses stuff off the left and right sides, or

Again, not a problem if you have a proper ATSC TV.

A picture that switches back and forth between normal and zoom because the cable company is failing to detect which format the program is in and it is jumping back and forth. (Yes, a cable issue, but based on the HDTV problem.)

I don't waste money on cable, so not a problem. I'm only addressing HDTV, not the cable companies' mangling of it. Don't like it? Stop paying them good money for lousy service and buy a rooftop HDTV antenna.

If you have an HDTV, you get a beautiful picture that has nothing of value on the left and right sides because the programmer knows the std def viewers won't see it.

Never noticed this, sounds like a hollow complaint.

Or a programmer that forgets that there are std def viewers so he moves important information (like the score of the football or soccer game you are trying to watch) into the HD areas and those get cut off

Not a problem if you get a proper TV. Why are you trying to hold everyone back to 1950s technology?

TV used to be TV. You could watch the station 20 miles away and you might have some snow but you could watch it.

Yep, and telecommunications used to all be by telegram. Then people decided they were sick of ancient technology.

You didn't like the "15kHz buzz"? Well, get your TV fixed because it's broken. Mine didn't do that unless I mistuned it, and I was certainly capable enough to tune a TV, even if you weren't.

Wrong. EVERY NTSC tube TV makes that noise, no exceptions. You're just too deaf in the high-frequency range to hear it.

One station that transmits two streams -- of exactly the same thing. No gain in programming.

My local PBS station alone transmits 4 streams of totally different programming (#5 coming soon).

And sorry, I don't see any of the picture/letterboxing problems you're complaining about with my 37" 720p TV. Maybe you should get rid of your 40-year-old TV and get something from this millennium.

If you don't ever want TV technology to change, do you feel the same about phone technology and computer technology? Why are you even on here? Shouldn't you be using a C=64 instead?

Uncle Sam Beat You To It

[Shakrai]

If you can just keep opening new lines of credit to pay off old ones

I'm confused; isn't this what the Federal Government does?