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Verizon's audacious new fee for on-line payments
- bmelton 15y agoI'll never understand this. It costs them less to process my charge online in terms of manpower, and is at least as cheap if not cheaper on charges incurred for them upstream. This is the truest definition of 'convenience charge' though, as they are, in fact, charging you for convenience. As a Verizon customer who has been considering dropping their cable service for some time (due to Hulu, Netflix, Amazon, etc.), I'm now giving thought to dropping them as an internet provider as well since we have a lot of good options in Maryland. I do love their internet service, but I hate bullshit charges that don't at least make sense.
- deleted 15y ago[deleted]
- stanleydrew 15y agoI'm interested in the good internet options in Maryland that you speak of. My mom lives in Montgomery County and is looking to switch from RCN.
- bmelton 15y agoComcast in this area has exceptional customer service, and actually offers decent broadband speeds. It isn't the Fiber Optic internet that Verizon FiOS gives me, but it's certainly good.
- heynk 15y agoAlso had Comcast in MoCo, definitely solid internet, overall pretty pleased.
- crgt 15y agoComcast is great if you want to give your money to a SOPA supporter.
- uptown 15y agoSo somebody, somewhere in the company figured out that they could save/make $X billon by charging a $2 "convenience fee" or getting their customers to switch over to ACH transactions thus saving 2% - 3% they're losing to credit card companies ... and since customers are frequently locked in by contracts ... or with hardware that won't work on other networks ... or don't even know what a routing number is ... they're captive. Class action lawsuit ... lawyers get paid ... customers maybe get a coupon for something useless in a year or two, or maybe nothing at all ... and the world keeps spinning. Maximize shareholder value! Beat those quarterly estimates! Make your customer relationship more difficult! Can you hear me now?
- danilocampos 15y agoThanks for writing my catharsis for me. Fucking exactly. I can't wait until we're past this moronic "maximize short-term pennies along with long-term loathing!" mindset. One of the first things taught about negotiating is, unless you're about to leave the planet never to return, don't make one-sided deals. Eventually they catch up with you, if only because no one wants to work with you anymore. It's such a valuable lesson. When will corporate America realize there's more money in the long game?
- isopod 15y agoWhen bonuses get paid out in terms longer than quarterly, or yearly.
- tl 15y agoShort-term: Maximize shareholder value. Long-term: If you're an executive and you haven't taken your compensation and moved to greener pastures, bribe the government to crush your better serving competition before they get the customers and the money.
- ajross 15y agoIt's cynical, but one has to at least consider that the reason is because there isn't more money in the long game. Over time all markets become commoditized, which is sort of a "one sided contract" in the consumers favor. This kind of cheating can be seen as attempt by the service providers to fight that trend.
- Deezul 15y ago"The fee will help allow us to continue to support these single bill payment options ... and is designed to address costs incurred by us for only those customers who choose to make single bill payments," Isn't running a for-profit company supposed to address costs associated with taking customers money? Convenience charge could simply be translated to a "because we can charge".
- suresk 15y agoI don't get this explanation at all. It isn't like credit card companies just barely started charging processing fees. And, on the other side, customers who utilize the less expensive payment methods aren't being given a credit for saving Verizon money. Not only that, but the recurring credit card payments will incur similar processing fees for Verizon, but won't cost you $2. Part of me sometimes wonders if there is some club where CEOs of large corporations are having a game to see which one can get away with the most ridiculous fee/price hike, with bonus points for using a patronizing explanation for it.
- tsieling 15y agoNot quite. A convenience charge is a naked, unbridled contempt charge. They do because they can, and nobody will stand up for you. Nationalize. Banish the execs to Monster Island. Start over.
- JoshTriplett 15y ago> They do because they can, and nobody will stand up for you. Nationalize. Banish the execs to Monster Island. Start over. Right, because having one company works so much better than having several, and because governments do so much better at listening to their "customers", and because you can always stop paying if you don't like the service. Oh, wait, none of those things.
- colkassad 15y agoI have Verizon set up in bill-pay through my bank. When I send them a payment using this method, is this considered a "one time" payment? The article is not very clear on that. I don't have an automatic recurring payment setup, I send the payment manually every month via my bank account.
- dbjacobs 15y agoIf they were charging for ACH payments I could understand the outrage. But passing through some of the credit card fees they pay hardly seems to be a capital offense. The only reason you don't see lots of companies passing through the cost is that their agreement with VISA et al forbids passing through the cost (which is why this is characterized as a convenience fee and is not exactly equal to the credit card fees they pay). Simply put, there are more important things to complain about than this.
- ericabiz 15y agoThe problem is, they don't charge for recurring credit card payments. Only one-time. And as someone who's signed a lot of merchant account agreements, there aren't different charges from Visa/MC/Amex for recurring payments vs. one-time. The fees are the same--this is just a ripoff from Verizon.
- jauer 15y agoWe (ISP) switched from authorize.net to ippay because they had much better rates on recurring payments. They claim to be able to process with a telco/recurring flag that has much lower fees. All I know is our fees went down a lot: www.ippay.com/index.php?q=ippay Might explain why vzw wants to push people to recurring payments.
- natrius 15y agoCustomers who have recurring payments set up are undoubtedly cheaper to service than one-time payers. They're less likely to fall behind on their bills, and getting customers to pay up after the fact costs money. This sounds like a reasonable charge to incentivize recurring payments.
- tzs 15y agoA recurring payment, though, is more likely to fail. For instance, if a card is at the limit, a recurring payment simply fails, and then you've got to find some way to notify the customer that they need to address the issue. Someone coming to your site to pay his bill, on the other hand, gets notified right away if there is a problem and so can get right on addressing it. Also, when people get new cards they often forget to update places that have the card on file, leading to much hassle for the vendor. Another advantage of customers who are paying month-by-month at your site--you have up sell opportunities that you don't have with customers who are on recurring billing. For a service that the customer considers to be reasonably high priority, I suspect that the combination of less billing attempt failures and the extra money from up sell attempts make the month-by-month manual customers actually cost less to deal with then the recurring customers.
- enigmabomb 15y agoThis seems like the kind of problem the open market should solve. Unfortunately, competing with Verizon isn't about the $2 convenience fee, it's about the nationwide 4g network. Every company has a right to make a profit, however they will have to provide value for it. This is a value reducing proposition. If reddit thinks Godaddy is evil, I'm excited to see what happens with this.
- jbri 15y agoI was under the impression that credit card providers basically say "you can't charge extra for paying by credit card". What would happen if Visa or Mastercard said "you're in violation of our terms, we're cancelling your merchant account"?
- dangrossman 15y agoI believe those terms got banned in one of the financial reform bills of the past two years. They're not allowed to prohibit discounts for other payment forms anymore. Perhaps it's this one: > (a) With respect to credit card which may be used for extensions of credit in sales transactions in which the seller is a person other than the card issuer, the card issuer may not, by contract or otherwise, prohibit any such seller from offering a discount to a cardholder to induce the cardholder to pay by cash, check, or similar means rather than use a credit card. http://www.fdic.gov/regulations/laws/rules/6500-500.html#fdic6500167 http://www.fdic.gov/regulations/laws/rules/6500-500.html#fdi...
- jbri 15y agoLooking at Visa's current terms, they don't seem to run afoul of those regulations - but Verizon is still violating them. Visa says you're allowed to offer a discount to non-credit-card payments, but it has to be presented to the customer as a discount for cash/gift card/e-check/whatever payment, rather than as a surcharge for paying with your credit card.
- frankydp 15y agoIf that is the case then this change would have to be a 2 dollar increase to all bills and then removed if you pay not using a CC. In which case this would be a material change to the contract.
- deleted 15y ago[deleted]
- kingnothing 15y agoFrom the article: "Customers can still enroll in a service that will debit their bank accounts or charge their credit cards on a recurring basis for free."
- lukeschlather 15y agoWe're going to need to break up the telecoms again. AT&T and Verizon are too big to offer halfway decent service.
- amanuel 15y agoBank of America, NetFlix, GoDaddy and now Verizon. Companies in 2011 that suffered self inflicted wounds to their brand.
- ericabiz 15y agoIANAL-Is it possible to set up a class-action lawsuit on this? We, Verizon customers, entered into a 2-year contract agreement. Now, in the middle of that contract, they are changing the agreement. At the least, shouldn't they be forced to wait until a customer signs a new contract to institute new fees? Perhaps someone with more legal experience can chime in. As a Verizon customer who just signed a new 2-year agreement, I'd be willing to join the class and spread the word about it.
- jcampbell1 15y agoI assume they will respect any existing contracts. The class action stuff around fees has generally been because the provider misrepresents the nature of the fee. For instance, they advertise a $39 a month plan, but then throw in a pure revenue surcharge with a description that makes it look like a federal tax.
- milkshakes 15y agotime for everyone to start paying by paper check -- let's see how long it lasts :)
- fragsworth 15y agoOne thing customers should be aware of: when carriers change the terms of your contract, you are normally free to cancel your service without paying an early termination fee. For many people, this can amount essentially to a massive discount on your phone.
- nhangen 15y agoI want to see more research on this topic. If this is true, I'm happy to do it. I pay every month online via credit card, which was a PitA as it was...this is flat out silly.
- snprbob86 15y agoThere is a great deal of case-law governing material changes to contracts, in particular: materially ADVERSE changes. Despite what may be in your ISP contract, case law takes precedence. Many changes to pricing, service, etc. offer you the opportunity to refuse the new terms without being penalized by existing terms such as the termination fee. [insert standard IANAL disclaimer here] You just need to know a few tricks of the customer service phone center game. Do these steps in order, stop whenever you get your way. Note that you must be willing to go all the way. 0) Make sure that the company only has a single payment mechanism on file for your account: a credit card 1) Call the company 2) Slam zero, pound, star, shout "AGENT" a bunch, and throw in a few swear words to trigger the system to send you to a live person ASAP 3) Ask to speak to someone in account management; preferably a retention specialist 4) Mention the materially adverse contract change 5) Tell them you'd like the change not to apply to you 6) Threaten to terminate your account, unless they provide an agreeable alternative offer 7) Refuse termination fees on grounds of materially adverse contract changes 8) Assure he operator that you will issue a chargeback for any such termination fees 9) Authorize cancelation of service You should also keep a timestamped log of every person you speak to. This includes both their informal name and some kind of unique identifier, such as a phone extension number. Your log should include every material claims/fact you provided them and they provided you, especially specific numbers and identifiers, such as prices/rates, case numbers, and descriptions of processes. Follow up: After you get your way. Call them right back!! Get someone else on the line and ask them to read to you your case notes. Call operators will lie to you to get you off the phone. Your case isn't resolved into someone totally different reads the case log back to you as you expect it to be. When you call, don't hint to them that you don't trust them. Tell them you got disconnected & ask them to read back the log aloud so that you are both on the same page. You don't want the new operator to be tainted by putting you on hold to go talk to the old operator.
- danberger 15y agoThis is a god damn outrage. To what point will corporate america keep pushing the envelope until consumers revolt?
- tarellel 15y agoJust another way for them to milk us dry. One of the reasons I had dropped AllTel in the first place was they were charging my a $5 fee for paying them upfront with cash. Bullshit!!! I might as well just start sending them money orders in $5 increments every month for my $200 bill. And we'll see how much a convenience it is for them than.
- josnyder 15y agoMuch as I like to jump on VZW, I don't think that Verizon should be vilified for this one. By my back-of-the-envelope math, Verizon is passing on the cost of credit-card processing to their customers, and no more (2% CC processing fee on a $100 phone bill == $2). I would much prefer to see customers realize how much they are gouged by credit card companies every day. Some small businesses (e.g. gas stations, the deli on the corner) already do this, and I'd like to see other large businesses follow suit. It's time for people to realize the sorry state of payments at-present, perhaps opening the way for a better alternative. Some are saying that Verizon is abusing their captive customers, but I see this as Verizon trying to escape captivity as a customer of Visa, MC, and Amex.
- frankydp 15y agoAre there charges for debit transactions, and if so are they comparable or less? If so why hasnt someone come up with a way to debit vice cc online.
- thaumaturgy 15y agoHumbug! CC fees, while annoying, are a cost of business which should already be included in the math they use to determine what I'm paying them each month. If they had to mail out a paper envelope & invoice and then pay somebody to handle my check back to them, do you think that would cost them more or less than $2 each month? I'm thinking it would be pretty darn close to $2 to deal with that. Should they be adding fees to my bill every time I visit their website, so that they can cover those costs too? Should they be charging me every time I contact a customer support representative? This is as indefensible as Bank of America's ATM fee. I've been a 5-line Verizon customer for at least 4 years, I've been out of contract for at least a year, and I'm calling them in the morning to express my extreme displeasure at this. If they don't reverse course on this I'm switching to Republic Wireless.
- suresk 15y agoGiven Verizon's size, 2% seems a little high, but it's sort of within the range of reasonableness. That said, I see this as nothing more than a way to get a few million dollars per month for doing nothing. If it were really to cover CC fees, as you say, then consider the following: 1) This isn't a new service they are offering, and CC fees are nothing new. Why only start charging now? 2) The fee is actually only charged for some CC payments - recurring payments or in-store payments, which would still be subject to similar CC fees, do not incur the $2 fee. 3) Since the CC fees that were being borne by all are now solely borne by those using CCs (well, some of them at least), why are customers utilizing cheaper payment methods not given a credit?
- jarek 15y agoThinking of the differences between the situation in the U.S. and western/central Europe (which I'm somewhat familiar with): Cellular, and anything else to do with physical infrastructure, might be the few cases in technology where the size of U.S. market works against creating value for the consumer. In most everything else, having access to a common market of ~300 million people is awesome; it's not so awesome when you have to be able to service a substantial amount of them to get critical mass. Wondering: in Canada, we have upstart cellular operators competing by offering lower prices for service covering only the largest urban areas of the country. So if you're in Toronto, Vancouver, and Calgary (and a couple of other places), you have more choice, in Flin Flon not so much. Anything like that in the U.S.?
- mitchellhislop 15y agoFlin Flon? Canada is awesome. Mostly, we have ATT, VZW, TMO, and Sprint duking it out over most of the customers, while second tier carriers (regional, usually) and MVNOs clean up the scraps. Not too many are doing much of note in terms of disrupting, although there are a few on the horizon. I think that a lot of it has to do with spectrum - there just isn't enough for upstarts, so they end up riding on the main networks of the big 4, or reselling them as an MVNO.
- rdl 15y agoI really wouldn't hold up the Canadian mobile industry as better than the US. It's one of the few markets actually worse than the US (data, call charges, etc.). The US has regional or urban carriers; often they're MVNO, or have some local infrastructure and use another big carrier for other areas. They're mainly confined to the low end/poor/no credit market. Until recently, they barely had featurephones. Probably the big ones are Virgin Mobile, Boost Mobile, and MetroPCS.
- jarek 15y ago> I really wouldn't hold up the Canadian mobile industry as better than the US. It's one of the few markets actually worse than the US (data, call charges, etc.). That's what I keep on hearing. But I also keep on hearing about $60, $100 smartphone bills in the U.S., and the last time I paid that much was on a shitty contract with Rogers in 2010. When I signed that contract in early 2009, there were no better options - I had to sign up for a year if I wanted Blackberry push email, and it didn't matter that I had my own phone (carrier subsidy $0). Now I pay $29 for unlimited local voice, unlimited text, unlimited-with-an-asterisk data, contract-free. My starting costs were a used $200 Nexus One and a $25 SIM card (much too much, but whatever). My carrier right now has a promotion with unlimited Canada/U.S. voice for $40 and unlimited text/data. The catch is that I would pay extra for service in the boonies, but I don't need service in the boonies. At the very least, I have the choice; does your average Android owner in the Bay Area or in Seattle, if so, what are the choices?
- wizard_2 15y agoI'll do the same thing I did with godaddy and leave. Verizon was already on my shit list for tracking every website I visited via my phone.
- jeffdavis 15y agoPlaying devils advocate: could this be a revolt against the credit card companies over their fees, rather than an attempt to screw the customer?
- jhaglund 15y agoSprint kinda did the same thing. Seems they hid it better tho -- http://www.sprint.com/spendinglimit http://www.sprint.com/spendinglimit 4th paragraph mentions the charge. Anyone who didn't sign up for auto-pay is charged an extra $5 a month, even if you pay on time.