Add-On Fees Cost Customers

They show up on your phone bill. Hit you hard at checkout time and may even appear on your bank statement. "There's a laundry list as long as my arm of places where these add-on surprise charges could crop up," says Linda Sherry with Consumer Action. Add-on fees aren't new, they're just growing in popularity says Sherry. It happened to Mark McCoy. "MCI notified me that it would be starting a charge," explains Mark. That new charge: An 'instate access recovery fee.' MCI says it's for, "...charges the company must pay to originate and terminate instate long distance calls over other networks." in Mark's case, it costs about a $1.88 a month. Matthew Hanna knows all about surprise charges, too. "I try to be really careful with add-on fees," says Matthew. He got hit with add-ons from two rental car companies; an additional driver charge from Hertz, and a higher than expected insurance fee from Avis. Matthew says, "I was not informed up front of the extra fees." Avis told us their insurance rates are clearly printed on every rental document. But it wasn't clear to Matthew, who had to pay more than $200 for the coverage! "Add-on fees provide a way that companies can charge you more 'without charging you more,'" says Meryl Gardner. Gardner, a Marketing Professor, says companies aren't trying to be deceptive, that add-on fees are mainly a product of tough economic times. She explains, "We're seeing it more and more in the airline industry and that's where customers are noticing it." Kay Robinson with the Better Business Bureau in Tyler adds, "There's little fees that are creeping in on all of our lives from all different directions." Robinson says most of the complaints she gets relate to utilities. She pulled some bills from her own office to show us just how confusing it can be. "Demand charge, what is a demand charge? Here's sales tax. We didn't used to pay sales tax on utilities but we pay sales tax on utility now." Robinson says some of the fees you've been paying all along, it's just that now companies are required to disclose all the fees you pay. "So now you've got this laundry list on your telephone bill of 10 or 11 extra charges. Consumers think it's added on, that they have never paid it before, but they really have it's just been hidden." But Robinson points out there are some new fees. For instance, she says the Legislature passed a law that labor can now be taxed. So when you take your car in to the shop you're not just paying tax on the parts anymore, you're paying tax on labor. Add on fees are also showing up in places you least expect them. a service fee for movie tickets, a 'long carry fee,' basically "a walking charge" to take furniture from the moving truck to your house, and ever hear of the "purchase made with a pin" fee? You could be paying an extra 50 cents every time you use your debit card! "Sometimes consumers don't ask about these charges and they aren't well disclosed at the front end," says Meryl Gardner. Do companies have to disclose these add-on fee? Linda Sherry at Consumer Action says that depends on the Consumer Protection Law in the state where the transaction occurs. But you do have protection if you think you've been victimized. Sherry says, "I virtually don't know one state in the union that doesn't have laws against deceptive sales." She goes on to say, "The best way to fight these add-ons, or to be sure you know what you're getting, is to ask questions way ahead of time." Matthew Hanna says his experience will change the way he conducts business. "I would suggest consumers demand a full accounting and an act

The experts we spoke with warn that add-ons often show up when you buy package deals. So take extra notice if you're buying something in a bundle, whether it's a vacation tour or even phone and Internet services. One other note: Hertz was contacted about this story and refused to return phone calls. For more information about what you can do if you're hit with an unexpected add-on fee, head back to our home page and click on the "know more on 7&qu