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Entries in Fees (50)

Friday
Dec142012

Southwest Airlines to Impose 'No-Show' Fee

Justin Sullivan/Getty Images(NEW YORK) -- For Southwest Airlines, it's going to cost you to be a "no-show." The airline announced Friday it will soon charge a new fee for passengers who fail use their ticket without canceling first, USA Today reports.

Southwest's current policy requires no fee for changing one's flight plans. No-show fliers can apply the value of their tickets toward a new ticket purchase, according to USA Today.

But the airline says too many no-shows is leading to too many empty seats. So Southwest will add the new fee for no-shows to its "Wanna Get Away" fares, the company's cheapest.

The company announced the new fees on an investor conference call Friday.

Copyright 2012 ABC News Radio

Thursday
Nov012012

Big Banks Waiving Fees for Customers Affected by Sandy

Ryan McVay/Photodisc/Thinkstock(NEW YORK) -- In the wake of Hurricane Sandy, several big banks -- like Citi, Wells Fargo, Bank of America and TD Bank -- are waiving some of their normal fees for customers in states affected by the monster storm.

One example is Chase Bank, which says customers in Washington, D.C., Virginia and much of the North East this week won't be charged for overdrawing their checking accounts or making a late credit card payment. 

Citi is waiving fees at least until next Monday for affected customers who use overdraft protection, have insufficient funds, or who are late in paying their credit cards.

Wells Fargo says some of its branches that lost power are still open, as employees use flashlights and hand stamp deposit and withdrawal forms.

And TD Bank is not charging early withdrawal penalties for customers who want to cash in their certificates of deposit.

Copyright 2012 ABC News Radio

Friday
Oct122012

$15 Quadrillion Phone Bill Doesn’t Ring True

iStockphoto/Thinkstock(BORDEAUX, France) -- A woman in France got the early termination fee of all time when she cancelled her phone service before her contract expired.

Solenne San Jose, from Pessac in the Bordeaux region of southwestern France, got a bill for 11,721,000,000,000,000 euros, or $15,179,617,380,129,834 to be exact.

“There were so many zeros I couldn’t even work out how much it was,” San Jose told French news service Sud Ouest, according to the BBC.  “[I] almost had a heart attack.”

Adding to San Jose’s stress was the fact that the phone company, Bouygues Telecom, initially stood by their billing. Instead of offering to cancel the bill, the company said it could not stop their computer-generated payment system from automatically withdrawing the amount from her bank account.

When San Jose persisted further in her own defense, Bouygues Telecom then agreed to set up a payment installment plan to help San Jose, a former teacher, pay off the amount, according to the BBC.

After further protest from San Jose, the company ultimately acknowledged they had, in fact, mistakenly added a few zeros to her bill and she, in fact, only owed 117.21 euros, or $151.

The company blamed the exorbitantly high bill on a printing error.

While San Jose’s bill was probably the highest mistaken bill in recent memory, it’s not the first.

In February, a Canadian family returned from a family vacation in Arizona to find a $10,600 bill from the Internet provider for movies their children streamed on Netflix without realizing there would be roaming charges.  The family eventually settled with the company and paid only $1,000.

ABC News’ Ned Potter reports that, last October, a Florida woman said T-Mobile ran up $210,000 in roaming charges while she traveled to Canada.  In a small victory, an Illinois man who complained he was charged $27,000 for streaming a Chicago Bears game while he was on a Caribbean cruise eventually won in persuading AT&T to void his bill.

Copyright 2012 ABC News Radio

Monday
Sep172012

Ad-Supported ATMs Expand in NYC

Hemera/Thinkstock(NEW YORK) -- A small start-up called Free ATM Inc. and the Barclays Center stadium of Brooklyn, N.Y. are partnering to bring ATMs with no fees to New York City.

The Barclays Center, home of the Brooklyn Nets and oft-used concert venue, will have seven ATMs on Sept. 28, including one that provides access to the public who are not attending an event.

Instead of paying an ATM fee, typically $2 or $3 when you use a machine outside of your bank’s ATM network, Free ATM machines are supported by advertising.

Telecommunications company MetroPCS and online review site, Yelp, have signed up as an advertiser to support the fee-less ATMs.

Clinton Townsend, CEO of Free ATM Inc., said the Free ATMs can provide cash and convenience to the over 3 million expected visitors at Barclays Center.

Townsend said the partnership with Yelp, a national company that serves hyper-local markets, was a strategic move.

“This gives us the opportunity to leverage both the national and local brands to use this platform,” he said.

Townsend said he was approached by Barclays in part because his company is also a local business.

The ATM ad plays during the time the screen’s message indicates a transaction is processing, typically 15 seconds or less, Townsend said.

This is Free ATM’s second location to host its machines after introducing its prototype in a music venue and bar called the Knitting Factory in Brooklyn on Nov. 4, 2011.

Townsend said 5,000 people have used the first ATM since its launch, one-third of whom are repeat-customers, saving about $1,000 a month in fees.

“When people know this is in their community, they are coming back time and time again,” he said.

Some people have used the ATM up to 8 times in a month, he said.

The Barclays Center ATMs are expected to distribute $5 million in cash in its first year.

The ultimate goal of the company is to expand to the rest of the country, he said.

But next up, the company is planning to host its ATMs at five more locations in New York City, including Manhattan and additional spaces in Brooklyn.

Copyright 2012 ABC News Radio

Thursday
Aug092012

New Fees: Are Cruise Lines and Hotels Taking Cues from Charge-Happy Airlines?

iStockphoto/Thinkstock(NEW YORK) -- Carnival Cruise Line is testing out a new fee, one that would, among other things, allow priority seating at dinner.

Sound familiar? It should. While it may seem the airlines have cornered the market on fees, they may have a little competition from hotels and at least one cruise line.

Carnival's $49.95 Faster to the Fun fee is being tested on two ships starting later this month -- the Imagination and the Liberty. The program is an industry first, according to cruise experts.

"We've never seen anything like this," said Dan Askin, senior editor at CruiseCritic.com. "There are a couple tangentially related fee-for-perks programs, but they focus on late debarkation."

The charge is per cabin, regardless of the number of passengers. It includes the aforementioned priority dinner seating, plus early embarkation and choice of debarkation time, cabin availability and access to the ships' guest services desk during the cruise.

"If the trials are successful, it wouldn't surprise me to see others experimenting with similar programs," said Dan Askin, senior editor at CruiseCritic.com. "Lines have shown time and again their penchant for sharing ideas."

Opinion on the site's popular message boards is mixed. Many wonder how Carnival will execute the plan and how it will impact tendering (how you board or leave the ship if it's too big to dock), embarkation and guest services for the rest of the passengers. Others seem to think it's much ado about nothing and will have no impact on the vast majority of cruisers' experiences.

The cruise line has not disclosed how many packages it will sell, possibly a key component, Askin said, in the impact on cruisers who choose not to pay the fee.

Hotels, on the other hand, have charged resort fees for ages, but those, while not included in the base price of your stay, are not optional. But there are small signs that change is in the air.

EasyHotel, a London-based budget hotel chain with 12 properties across Europe and the United Arab Emirates, offers no-frills hotel rooms where travelers can opt to pay extra for everything from a remote control to early arrival to room cleaning to bag storage.

Starwood, which owns such brands as W, St Regis, Westin and Sheraton, gives a discount for every day a person opts out of maid service. The Make a Green Choice program gives guests a $5 voucher for food and beverage or 500 Starwood Preferred Guest points for every night they decline housekeeping services.

While Starwood's discount plan seems to be dipping a toe into the pool of hotel fees, the question is whether travelers will actually pay for them. Travelocity's 2012 Traveler Confidence Report found that travelers are highly unlikely to pay for services like cleaning, towels, concierge service or personal check in.

If hotels and cruise lines are indeed trying to mimic the airlines, it's a no-brainer from a financial perspective: The airlines raked in $22.6 billion in fees in 2011, according to a study by IdeaWorks, an airline ancillary revenue consultant, and Amadeus, a transaction processor for the travel industry.

But at what expense? "Public opinion of the airlines is at an all-time low. People feel completely nickeled and dimed, and many are limiting the times they fly or are foregoing flying all together," said Anne Banas, executive editor of Smarter Travel.

But, she points out, flying is sometimes necessary, and there are far fewer airlines to pick from than there are hotels and cruise lines. "Hotels and cruise lines potentially run a greater risk of losing business since customers have more choice. In other words, there are many more cruise lines and hotels to pick from than there are airlines. If a given hotel charges fees, consumers can more easily give their dollars to another down the street."

Copyright 2012 ABC News Radio

Thursday
Jul262012

JPMorgan Chase to Pay $100M for Hiking Credit Card Fees

Peter Foley/Bloomberg via Getty Images(SAN FRANCISCO) -- Under a court settlement filed this week in San Francisco, JPMorgan Chase will pay $100 million to credit card holders who saw their minimum monthly payments hiked from 2 percent to 5 percent between 2008 and 2009.

A class-action lawsuit, filed three years ago, argued that the increase was improper, and that it violated commitments made by the bank to induce cardholders to switch their balances to Chase from other lenders.

Those commitments, says Howard Dvorkin, CPA, a founder of ConsolidatedCredit.org, included interest rates that were supposed to remain “fixed” until balances were paid in full.

“They said come to us and we’ll fix your interest rate for the life of the loan, until it’s paid off,” says Dvorkin.

In 2008 and 2009, however, the bank raised rates, triggering an increase in late payment penalties from hard-squeezed borrowers.  Late payment also could trigger a penalty interest rate of 29.29 percent.

“Your promotional rate that got you to the bank, they didn’t honor,” says Dvorkin.  “A client would go delinquent, and triggering penalty and late fees, and your interest rate could go to 30 percent.  Do I think this was part of an evil master plan?  No.  Do I think it was aggressive?  Yes.  And now they’re paying the penalty for it.”

Chase’s view, according to the proposed settlement, which still must be approved by a judge, was that raising payment minimums was “a reasonable and sensible response to unprecedented economic turmoil and impending regulatory changes” -- meaning the credit card reform act of 2009.

The proposed settlement includes a complex allocation plan for divvying up the $100 million between members of the class.  Class members get a flat payment of $25 plus a pro-rata share of the settlement fund (after legal fees and costs have been deducted).  The plan gives $72 as a representative amount.

“At the end of the day,” says Dvorkin, “it’s the lawyers who make the money.”

A spokesperson for JPMorgan Chase, contacted by ABC News, declined to comment on the settlement.

Copyright 2012 ABC News Radio

Friday
Jul132012

Settlement May Lead Some Consumers to Pay 'Swipe' Fees

iStockphoto/Thinkstock(NEW YORK) -- Payment networks Visa and MasterCard, as well as a number of large retailers, have agreed to a $7.25 billion settlement that may allow merchants to impose a surcharge on consumers for credit card transactions and end a seven-year battle over credit card swipe fees.

Under the current system, merchants pay interchange, or swipe, fees to Visa or MasterCard that go to banks. The settlement may give merchants the right to recover the cost of the swipe fees from consumers.

Kroger, Safeway and Payless Shoe Source settled with Visa, MasterCard and more than a dozen large banks after U.S. retailers filed a class-action lawsuit in 2005. The settlement must be approved by the Eastern District Court of New York.

The settlement will allow greater transparency to consumers, attorneys for the merchants said, because merchants are now permitted to tell them that there are fees associated with credit card use and they are recouping a portion of it. Or, they could tell the customers that it is cheaper to pay cash.

"Although we have strong defenses to all claims, a settlement avoids years of litigation and uncertainties that are inherent in such cases," said Noah Hanft, MasterCard's general counsel and chief franchise integrity officer. "We believe that today's settlements should resolve all issues with the merchant community."

Joseph W. Saunders, Visa Inc. chairman and CEO, said the company believes "settling this case is in the best interests of all parties."

Patrick J. Coughlin, senior trial counsel at Robbins Geller and one of the lawyers for the plaintiffs, said the new rules will allow merchants to "put pressure on the credit card networks to lower interchange or 'swipe' fees, which are the second- or third-highest cost of doing business for many retailers."

Bonny E. Sweeney, the firm's senior antitrust partner and its principal litigator in the case, said the settlement refunds billions of dollars to retailers that paid "artificially inflated interchange fees."

Frank Keating, president and CEO of the American Banking Association, said retailers were showing "little regard for consumers."

"Let's be clear: Retailers, not consumers, benefit from today's resolution," he said in a statement. "This settlement even provides merchants with the ability to impose 'checkout fees' on customers just for using credit cards. This type of behavior is nothing new for retailers."

Michael Kon, Morningstar senior analyst, said the settlement wasn't a surprise.

He said the right to allow a consumer surcharge for credit card transactions, the core of the legal battle, will affect smaller merchants or "mom-and-pop shops" mostly.

"Businesses like small grocery stores might be more flexible in surcharging for credit card transactions, though they risk losing clients," Kon said.

Kon doesn't expect the settlement to make a significant difference to consumers because large merchants, like Target and Walmart, may be hesitant to impose a surcharge on consumer transactions.

"Paying with credit cards is much more convenient for merchants and shoppers," Kon said. "It might be a bad strategy to penalize someone using the most convenient way to pay."

Many analysts note that merchants already take into account credit card swipe fees when they set their prices, whether you pay by credit card, cash or check.

"I don't see them rushing to give this surcharge to a group of shoppers who choose to pay with credit cards," Kon said.

Sweeney agreed that the settlement doesn't directly affect consumers because not all merchants will impose a surcharge on consumers.

"The helpful aspect of the settlement is [that], whether merchants charge customers or not to recover acceptance, having this tool will increase competition in the payment card market and eventually lower merchants' costs, which will eventually bring down prices for consumers," she said.

When asked the likelihood that merchants will pass on the possible lower costs to consumers, Sweeney said, "The U.S. retail market is very competitive, so it seems likely that merchants will pass the savings to customers."

Copyright 2012 ABC News Radio

Monday
Jun112012

Airline to Auction Class Upgrades

Hemera/Thinkstock(NEW YORK) -- The opportunity to purchase upgrades has been around for a while now, letting airlines squeeze a few extra dollars from passengers at check-in while giving non-elite status fliers a chance for a more comfortable flight. What is new, however, is auctioning off those upgrades to the highest bidder, which is exactly what Etihad Airways is doing.

BoardingArea.com reports that the national carrier of the United Arab Emirates is the first to offer upgrades for auction.

“With our newly launched online upgrade system, guests holding confirmed tickets on Etihad can now determine the amount they are willing to pay for an upgrade to the next higher cabin – Diamond First Class or Pearl Business Class respectively,” reads Etihad’s website.

The process for bidding seems straightforward. Ticketed passengers will be notified via email about potential upgrades. They then make an offer (offers are made per flight segment), enter credit card information and submit. There’s no charge for unsuccessful bids. You’ll be notified two days prior to your flight about the status of your bid.

“The success of an offer will depend on the amount offered for an upgrade, other competing offers as well as the guest’s status within the Etihad Guest program. As always, the higher the offer, the greater the chances,” reads the Etihad website.

Fliers with successful bids will earn an additional 10 percent miles bonus.

Copyright 2012 ABC News Radio

Friday
Jun082012

Top Three Tips for Checking Fee Safety

Hemera/Thinkstock(NEW YORK) -- If you have a checking account with a bank or credit union, do you know what the policies are on fees and overdrafts?

Probably not.

“Consumers are expected to wade through long, confusing documents and may be subject to steep, unexpected fees to access their own checking accounts,” said Susan Weinstock, director of the Pew Safe Checking in the Electronic Age Project.

“Our latest research shows that the median length of disclosures for a checking account is 69 pages long,” she added.

The forms are full of fine print and hard-to-read legalese, causing many people to disregard them.

“We asked people so what do you do with those papers that the bank gave you when you opened a checking account, and they said we put it in a drawer and filed it away,” Weinstock said.  “Nobody read these things.”

A new report called “Still Risky: An Update on the Safety and Transparency of Checking Accounts” finds some fees have increased, and that there’s been little improvement on disclosures to consumers since the last report in 2010.

Pew found that policies and fee information are not summarized in a uniform, concise and easy-to-understand format.

“What we found is that consumers really need a disclosure box,” Weinstock told ABC News.  “What we are pushing is like a nutrition label.”  

This would make it much easier for consumers to compare their banks’ checking and overdraft policies with other firms.

“You’d be able to look at accounts beyond banks and within banks, and decide this is the account that best meets my needs based on the terms the conditions and fees that suit you,” Weinstock said.

“Seven banks have adopted the box,” she said.  “Two of the biggest are Chase and TD Bank and we’ve had two of the three biggest credit unions -- Pentagon Federal and North Carolina State Employees Credit Union.”

Here are ABC News’ checking tips for consumers:

1. Learn what checking fees your bank charges by doing some research.


Pew measured the transparency of the 12 biggest U.S. banks by deposit volume and found that some checking information was not disclosed in writing by banks or on their websites.  For example, information about extended overdraft penalty fees were not obtainable  from Wells Fargo, Citibank, HSBC Bank, Regions Bank and Capital One.

2. Beware of transaction reordering.


Many banks reserve the right to change their posting order at their discretion, posting withdrawals before deposits in customer accounts and thereby increasing the likelihood of greater overdraft charges.  However, four banks in Pew’s report -- BB&T, Chase, Citibank and Wells Fargo -- disclosed that they post either chronologically or in low-to-high order for at least some types of debits.

3. Know that protective regulation may be coming, but it’s not here yet.

The Consumer Financial Protection Bureau opened a request for information on banks’ overdraft practices in February 2012.  Weinstock said Pew is planning to submit its checking safety report this month before the Consumer Financial Protection Bureau stops receiving comments from the public by the end of this month.

Copyright 2012 ABC News Radio

Thursday
May312012

Banks Hit You with Fees Even on the Way Out

Ryan McVay/Photodisc/Thinkstock(NEW YORK) -- Closing a bank account involves more than just signing on the dotted line and saying good-bye.  It also means reaching into your pocketbook if your money is in one of the country’s 10 largest banks.

In a survey of the top 10 banks -- Bank of America, BB&T, Chase, Citibank, HSBC, PNC, SunTrust, TD Bank, US Bank and Wells Fargo -- Consumers Union staff attorney Suzanne Martindale said, “Banks have added all sorts of fees on basic checking accounts, which has raised alarm bells.  But when you hit (the) breaking point and want to move your money, guess what you encounter: more fees.”

All told, customers could wind up spending a maximum of $55 after various fees are factored in.

You can basically forget about your bank making a free same-day electronic transfer.  Those transfers to your new bank can cost as much as $30.  Even getting a certified check may set you back $10.

There are also penalties to contend with such as paying $25 if accounts you want to close have been open for under 90 days or less than 180 days, depending on where you bank.

The hassles don’t even include the delays people encounter when they open new accounts, which can run from a couple of days to two weeks due to paperwork.

Consumers Union also says that re-routing automatic payments and direct deposits into a new account can take up to six weeks in some cases. 

Copyright 2012 ABC News Radio







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