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Verizon Wireless Plans Then Rescinds $2 Fee for Paying Your Bill

This article was written by in Consumer. 27 comments.

Update: Less than a day after a Verizon Wireless employee leaked a memo with this information, the company has announced that it will not be moving forward with the implementation of this $2 fee.

The sad fact is we now live in a world where many companies have left their customers behind in the search to squeeze every possible cent out of every transaction. I’ve long lamented the increasing incidental fees charged by airlines; you can’t eat, check a bag, or receive a seat assignment early without paying extra now, and soon you may not be able to sit or use the restroom in-flight without swiping a debit or credit card. Gas stations charge more for fuel if you want the convenience of using a credit card. Banks tested and for the most part ultimately backed away from monthly debit card fees.

Starting January 15, Verizon Wireless will charge its own customers $2 to pay their own mobile phone bills.

Verizon WirelessOnly certain payment methods will be subject to this fee, but the new policy leaves only a few opportunities to avoid this surcharge:

  • Enroll in auto-payment, so your bank account is debited or your credit card is charged the same day every month.
  • Mail a paper check as if you’re still living in the twentieth century.
  • Use your bank’s bill payment service.
  • Walk into a Verizon Wireless store and pay a bill in person (an option for everyone, but a popular for those without bank accounts).
  • Pay with a Verizon Wireless gift card.

If you use a credit or debit card to pay your bill via Verizon Wireless’s website or over the phone, the $2 fee will apply, but if you pay via check (electronic ACH or paper) via phone or online, there is no fee. It’s another case of payment type discrimination; it costs more to process credit and debit card transactions, and Verizon Wireless is passing that cost along to certain customers. The customers most affected are those who need to wait to the last minute to pay their bill — customers living paycheck-to-paycheck, many of whom don’t have bank accounts.

It doesn’t take much to avoid this fee, but it’s another hassle for many customers and an indication that the pattern of nickel-and-diming across a variety of industries will continue. And those most at risk are those who have the least power to do anything about it.

Photo: ColumbusCameraOp

Published or updated December 30, 2011.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 27 comments… read them below or add one }

avatar 1 Anonymous

“Mail a paper check as if you’re still living in the twentieth century.”

Believe it or not, many people still use paper checks to conduct regular transactions and especially when the person you’re doing business with isn’t set up to receive electronic payments, such as a local contractor or plumber. Using checks is a practice that probably won’t be going away any time soon.

Also, while we predominantly use online payments here at Chez Dziubek, we’re not fully on board with automating everything. It’s more of a control thing…while having money come out of your bank account automatically to make payments, there’s a serious risk of things going awry. If you have a steady job(s) where you know the same amount of money is going to come in every two weeks or so, then it’s usually fine. But what if you have a commission or sales-based job where your income tends to ebb and flow, then there’s a very good chance that, at any particular time, you may not have enough funds to cover those regular automated payments. Then you find yourself in a situation where you’re overdrawing your account not once, but multiple times. At least with making manual online payments you’re analyzing each payment that you make.

Plus, working at a bank I’ve noticed there can also be an issue trying to get some companies to STOP automatically drawing money from your bank account. Sometimes you can give a company the benefit of the doubt but there are some unscrupulous companies who will keep trying to draw money out, even going so far as to sending their transactions through with different names so as to prevent the bank’s attempt to block them.

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avatar 2 Luke Landes

Yes, many people still use paper checks, and this will only slowly go away, but that doesn’t change the fact that it’s twentieth-century technology. New technology exists to eliminate the need not only for customers but for banks, whether it’s used or not, and therefore it’s outdated. Many people continue to send letters by snail-mail, too. That’s not going away, but other modern technology exists.

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avatar 3 Anonymous

While I agree this fee is ridiculous, the amount of attention and outrage over what will be, at most, a $24 hike for under half of the consumers for one particular company, is completely disproportionate. Save the outrage for real issues like our country’s complete inability to reform its financial system or tax code.

As for airline fees and whatnot, take your pick: a universal fare hike, or a la carte expenditures that only those who want or need have to pay. I’ll take the latter any day.

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avatar 4 Anonymous

“It’s another case of payment type discrimination; it costs more to process credit and debit card transactions, and Verizon Wireless is passing that cost along to certain customers.”

I don’t agree with that statement. It looks like they don’t have a problem with credit and debit cards, they have the problem with online and phone payments.

Regardless, I agree this fee is ridiculous.

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avatar 5 Anonymous

The uproar does seem a little dramatic. There’s a legitimate cost to processing credit card fees, and that eats into every vendor’s bottom line. The NY Times explains it well …

“Those one-time payments cost Verizon money since it must pay merchant fees to card companies and others. The amount it costs Verizon to accept cards in stores could be less because of quirks in how the card companies set fees. It may also be willing to swallow the costs of accepting cards in its stores in exchange for the opportunity to sell upgrades to people who come in to pay their bills.”

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avatar 6 Luke Landes

This is no different than any other retailer. Do you pay a different price at Best Buy if you choose to use a credit card instead of cash? Does your local barber charge more for a hair cut if he has to process a credit card transaction? Other businesses figure the cost of processing transactions into their pricing. The assumption that prices would go up for evryone if Verizon Wireless were not to add this fee is likely wrong. It’s a simple case of adding an inconvenience fee to a segment of customers who don’t have the leverage to fight it and may have trouble selecting alternative options to avoid it.

Now it’s true that there are bigger problems in the world. I’m not personally outraged over this, but I can see why other people are.

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avatar 7 Anonymous
avatar 8 Anonymous

Many gas stations charge different prices for cash and credit. Some gas stations are cash-only, and they’re able to keep their costs lower because of it.

Many retailers will not accept credit card payments for transactions under a certain dollar amount. The most common I’ve seen is $10 or so.

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avatar 9 Anonymous

Yes it does indeed cost a company money to process a credit card transaction. However, that is part of being a business and choosing to accept credit card payments. Verizon is a multi-billion dollar company and has shown profit gains without the so called “convenience fee” so therefore why start charing it now, especially at such a fragile econimic time in the US? FYI I spoke to some local business and to use credit cards it costs them around .25 per transaction.

The uproar is absolutely NOT dramatic and is in fact why I am proud to be an American. It is a simple showing of how we as a country should come together when we know something is not right. The fee was nominal however it is a matter of principal moreso than price. All businesses have operating costs. Not all of them have to be the consumers problem.

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avatar 10 Anonymous

I agree that this can get overblown but then Verizon should just build this cost into the rates they already charge. This fee is ridiculous on it’s face. Especially at a time when things like this are likely to set many consumers off which leads to outrage and companies like BOA walking back their original plans to add fees.

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avatar 11 Ceecee

As long as there is a way to avoid it, I can tolerate it. Some people just won’t give it the attention to avoid the fee. It’s like people who don’t use coupons—–they think it is too time consuming so they will pay more.

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avatar 12 tigernicole86

I’m still surprised that Verizon hasn’t learned from other companies mistakes on fees. I know it’s a small fee but they’re not doing anything that they weren’t before. So I’ll be asking for a paper statement so I can send in my check.

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avatar 13 Anonymous

Changing from your cell phone isn’t like changing your bank–it’s a lot more expensive and difficult. Just to cancel a contract, switch carriers (and possibly phones) and keep your number would cost well over $100. And Verizon has the best quality of cell phone providers. They have the leverage here, and they know it.

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avatar 14 Anonymous

Wouldn’t it cost Verizon more to process a paper check than a debit card? Some other companies I have dealt with offered a $5 incentive to switch to a bill pay service. Seems like offering an incentive would be better PR.

What is to stop you buying a bunch of Verizon gift cards and using those to pay your bill? Presumably you can use a credit card to buy the gift cards. Has Verizon thought this through?

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avatar 15 Anonymous

Then you’re giving Verizon an interest-free loan of the amount on your gift card and running the risk that you’ll lose the gift cards. I think they would take this in a heartbeat.

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avatar 16 shellye

If Verizon really wanted to make more money without a PR problem, they should start charging a fee for a paper statement. Most likely there would be many customers who would pay the fee for some months before electing to turn off their paper statement and get an electronic statement. As the number of e-statements increased, the number of people paying the fee would decrease, but so would Verizon’s costs to print the statements in the first place. So it benefits Verizon’s bottom line either way. Without the PR nightmare they have now.

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avatar 17 Anonymous

One thing we might be overlooking is with the airline’s baggage fees the accounting rules are different then with fares. They don’t have to add them in as revenue (earnings) so it’s kinda like free money. Our Congress needs to address the accounting rules to change what is becoming a very annoying, albeit profitable, loophole. All companies need to quit hiding cost in the fine print and just qoute a fare/bill/charge as what it really is.

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avatar 18 Anonymous

Theres several ways to avoid this fee. Seems like a lot of drama and outrage over an easily avoided $2 fee from one vendor.

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avatar 19 Anonymous

Yeah, but if one vendor does it successfully then others may follow suit. Look at airline baggage fees, for example.

As a society, we’ve become so used to these “free” conveniences that we become hooked on them. Then when someone comes along and charges money for it, we complain vociferously…but in many cases, we also still pay because we’ve become addicted to the convenience and don’t want to be without it. If these companies make more money from the new fees than the business they lost because of it, you can be sure that other companies will follow their lead and impose similar fees.

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avatar 20 Anonymous

I think Verizon is trying to change people’s behavior. This will cause more people to switch to one of the free services. Perhaps it is a subtle way of reducing bank fees or traffic on verizon’s service?

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avatar 21 Anonymous

What concerns me about these fees is that most consumers don’t consider them when determining which company to patronize. In a sense, it allows companies to falsely advertise the price of their products. This is precisely why airlines will soon be required to include service charges and fees in their advertising, though I don’t know if “incidentals” (baggage fees, etc.) will be covered under the new regulation. In any event, it seems to me that hiding fees is simply a means for companies to LOOK my more competitive than they really are. In all likelihood, few consumers will consider Verizon’s new fee when comparing the cost of cell phone service.

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avatar 22 Anonymous

Wow, that didn’t take long, they just announced that they’re reversing the fee change. I actually like the way they spin it: “we listen to our customers.”

In a week, we’ll have forgotten all about it and they won’t lose any customers over it. Their service going down 3 times this month is a much bigger issue for them.

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avatar 23 Luke Landes

Thanks, Daniel. That was quick. Almost *too* quick. But good for those customers affected.

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avatar 24 wylerassociate

it’s just ridiculous that companies like verizon & bank of america make these fee decisions, are “stunned” by the backlash then drop the idea.

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avatar 25 Anonymous

Well, it all looks like a moot point now. Verizon backed down.

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avatar 26 skylog

indeed. that said, it was good to have the debate. as a verizon customer, i am glad to now not have to pay the fee, as i am a one-time online payment guy. i like to have control in these type of payments, just in case there is a billing error so i do not have to deal with a potential nightmare in an auto-pay scenario. i also like to easily switch payments between rewards card to maximize the payoff as it is warranted.

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avatar 27 qixx

The real problem with fees like this is that if the outrage is not swift and severe then all the other cell phone companies will follow suit. I’m glad this went away quickly. It will hopefully stop AT&T from trying to add this to my account.

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