From stores… banks… hotels… Web sites

With the economy suffering, companies are relying more on extra fees and charges to stay profitable. For example, a company will offer low prices on consumer goods, then bury a $5.99 surcharge in the fine print of the contract or just neglect to tell you about additional costs until your bill arrives. These nickel-and-dime charges add up. According to a survey conducted by independent business-research firm Ponemon Institute, the average consumer can expect to pay $946 this year in sneaky fees. Be on guard for…

STORES

  • Debt forgiveness insurance. Electronics and furniture stores offer tempting deals that let you charge your purchase to a store credit card and delay payment for up to 18 months. As long as you pay the full amount on time, you’re getting the equivalent of an interest-free loan.
  • Sneaky twist: Some stores now tack on a monthly $5 fee to ensure that your debt will be paid if you suffer “grave circumstances” (such as death). Sometimes, it’s listed as “insurance fee” on your bill, other times it’s just added to the amount you owe. Miss even one of these debt-forgiveness payments and you trigger all the back interest for 18 months — even if you pay off the original purchase amount on time.

    Self-defense: Never ignore small monthly charges on a store credit card… never pay an amount less than you owe even if it looks like the store is mistaken.

    BANKS

  • ATM denial charges. You can now be charged for using an ATM even when you don’t withdraw money.
  • Example: Recently, I needed cash but wasn’t near a branch of my own bank. So I withdrew money from a different bank’s ATM. I tried to get $400, but the machine let me have only $300, which it informed me was my daily limit. Later that month, I received my bank statement. I was charged a fee by the competing bank for using its ATM and an additional $1.50 fee from my own bank for “ATM denial,” supposedly to cover the cost of processing the request that exceeded my daily ATM withdrawal limit.

    Self-defense: Find out from your bank the maximum you can withdraw in a day from an ATM. It can vary depending on your financial institution, the city you live in and what kind of accounts you have. Or consider banking at a credit union. They have fewer sneaky charges and typically refund your fees when you use ATMs other than their own. To find one, contact a credit union league representative in your state. (Visit the Credit Union National Association Web site at www.creditunion.coop/statej_o.html to find a representative.)

  • Cash withdrawal overdraft fees. You can check your account balances using an ATM — but these machines don’t always tell you the truth. Some automatically add the amount of your overdraft protection to the balance shown for your checking account. So, if there’s $80 in your checking account and overdraft protection of $200, the ATM indicates that you have a checking account balance of $280.
  • Trap: If you believe this number and withdraw more than $80, you’re hit with an overdraft fee ($35 to $40) and a daily fee ($2 to $10) until you pay off the overdraft. If you write a check for more than $80, you are charged a bounced-check fee ($25) from your bank and perhaps one from the merchant to whom you wrote the check.

    Self-defense: Sign up for the type of overdraft protection that authorizes the bank to take a cash advance from your credit card to cover checks or withdrawals that exceed your account balance. That way, ATM machines will not inflate your balance. Of course, you will have to pay interest on any cash advance you do take, but it’s less punitive than “courtesy” overdraft fees.

    HOTELS

  • Hidden in-room charges. Most of us know to avoid the jacked-up prices for minibars and long-distance telephone calls in hotel rooms. But you can be charged fees even if you don’t actually use the minibar or telephone. At some hotels now, a special sensor in the minibar is activated if you remove an item. Fail to replace it within 60 seconds, and the “purchase” will show up on your bill. At other hotels, you can be charged a dollar a day for the ability to make room-to-room calls regardless of whether you actually make them.
  • Self-defense: When you check in, ask the management if the price is all-inclusive. Upon checkout, give yourself enough time to study the bill and complain, if necessary, before you leave. Most hotels don’t want to lose the goodwill of a customer over a small, unfair charge. Unfortunately, many travelers are in such a rush that they don’t look at their bills until they get home. Then they can’t be bothered to write a complaint letter to get back a few dollars.

    WEB SITES

  • Rush-order upgrade charges. Internet merchandise that comes with free shipping seems like a great deal. But some Web sites manage to charge you a fee anyway. The fine print in your bill of sale often says that it could take your package two weeks or more to arrive. That’s because your item is “throttled” — purposely held back in the mailroom for 10 days — before it is shipped.
  • Trap: The only way to avoid this frustration and get your package sooner is to pay an additional $4.99. These rush orders do not mean the actual shipping is faster. It means the company won’t process your order in their warehouse in slow motion.

    Self-defense: Make sure that you are using the total price, including shipping and additional fees, when you compare deals on different Web sites.

    FIGHTING BACK

    If you’ve already been charged a sneaky fee, pick your battles efficiently. There are enormous disparities among industries when it comes to who best accommodates complaining consumers. For example, it’s always worth challenging credit card companies. They’re the most likely to issue an unhappy customer a refund on a fee or surcharge.

    In a nationwide survey I commissioned, consumers had a 65% success rate in getting a fee refunded from a credit card company. That was followed closely by airlines (60%) and supermarkets/grocery stores (57%). It’s a bit trickier to get justice from hotels (37%) and banks (33%). And it’s very difficult to prevail with cell-phone providers (27%) and cable and satellite-television providers (20%).