“‘How the Other Half Banks,’ by Mehrsa Baradaran” [New York Times]
Heeding cries of outrage from the internet, Verizon decided to drop the “convenience fee” it planned to start charging for single credit card payments. Look for the cost of future Verizon cell phone plans to rise by $2, which the internet won’t complain about because it isn’t called a “convenience fee,” and everyone will pay it no matter how they pay their bills.
In other news, Spring is still doing the same thing.
It didn’t take long for companies to realize they could save a lot of money on personnel and supplies by eliminating paper bills and accepting online payments. For the most part, this has been a good thing for consumers. Paperless bills are generally more efficient for everyone, and online payment is really convenient.
To encourage this transition, many companies started charging for paper bills. In general, nobody cared. Paperless bills are more convenient for just about everyone, and it’s pretty obvious that sending paper bills costs more (even if it doesn’t exactly match up with what the companies charge). Paperless billing goes hand-in-hand with online payment, but companies really don’t like merchant transaction fees, and companies really want you to sign up for automatic payments, so many companies are using the same tactic to “encourage” customers to sign up for auto-billing, or else to use transaction-fee-free payment methods.
Verizon is the latest to introduce a “convenience fee” for online payment, although it’s a little embarrassing, since it comes right on the heels of its third data outage this year.
That’s right. Instead of acknowledging that consumers don’t want to get screwed when they use their cards, banks are strategizing how to increase revenue from NSF fees. Maybe it is time to look for an online bank, after all.
Consumers have complained for years about being charged $35 overdraft fees for a $2 purchase. At least one bank, Bank of America (BoA), has listened and will eliminate overdraft fees on debit card purchases.
Starting on June 19 for new customers, and in early August for existing customers, customers who attempt to use a debit card without sufficient funds will be declined. For example, if your account has $1.56, and you attempt to buy a $5 sandwich, your card will be declined, and you will not incur an overdraft fee.
I understand the need for courts to enforce their orders, but when hard times mean that a state like Florida is throwing thousands of people into jail just for failing to pay fines of a couple hundred dollars, something ain’t right.
The problem, of course, is that state courts are strapped for cash along with everyone else. In many states, court fines are a major source of court funding.
As Rebekah Diller of the Brennan Center for Justice said:
“Judges . . . should not become “debt collectors in robes,” which she called both demeaning to the judges and humiliating for the people who must stand before them.
Plus, debtors’ prison seems a bit, well, medieval for a modern society. Prison does not exactly pay well, either. If the courts want people to pay their fines, locking them away from their income seems like a poor strategy.
(photo: Still Burning)
Above, watch the trailer for Karney Hatch’s “Overdrawn!”, a documentary which chronicles his fight against absurd overdraft fees. In his journey, Hatch ends up talking with several AFFIL Partners as well as Ralph Nader. He currently has an action posted on Change.org (a fantastic social network) where you can show your support for H.R. 1456, the Consumer Overdraft Protection Fair Practices Act. AFFIL supports this bill, and signed on to joint Congressional testimony (PDF link) about it last week with eleven other groups. Keep Reading »