May 24, 2024

An Uproar on the Web Over $2 Fee by Verizon

The $2 monthly fee, which takes effect Jan. 15, will apply to people who make one-time credit or debit card payments on the phone or online. Subscribers who write checks or have the company charge their credit or debit cards or deduct from their bank accounts each month will not have to pay the new fee.

But Verizon customers nonetheless flooded Twitter with denunciations of the company, setting up online petitions and vowing to use paper to cost the company more money than it would raise through the new fee. Others noted that the people who tended to pay at the last minute were often those who lived paycheck to paycheck.

The outsize reaction in many ways reflects the year that is now concluding. The economy has not improved much, consumers are fresh off their victory in getting Bank of America to rescind its own move to levy a small new monthly fee and airlines and other companies continue to ask customers to pay à la carte for goods and services that were once part of the standard price.

Then there was Verizon, making the announcement in the dead week between Christmas and New Year’s and calling its new charge a “convenience” fee.

“These fees are going to cover the costs of those last-minute payments,” said David Samberg, a Verizon spokesman. “We don’t want anyone to have to pay this.”

So how can customers avoid it? In addition to using a check, automated bank transfer and credit or debit card, Verizon customers can also pay at a Verizon store, by money order, or by using a bank or other company’s online bill payment service. They may also use a Verizon gift or rebate card, or make a last-minute, one-time phone or Web payment by handing over their bank account number and their bank’s routing number.

Verizon Wireless followed other Internet service providers, including Comcast, that have decided to charge fees to customers for certain phone payments. ATT, Verizon’s biggest rival, has not announced plans to impose charges for electronic payments and a company spokesman declined to speculate on whether it might do so.

Gerry Purdy, a principal analyst with MobileTrax, a market research firm, said it made sense that Verizon was charging for over-the-phone payments, because carriers typically must pay a third-party service to handle those transactions. But Internet payments do not require a third party, he said.

“That’s the one that surprises me, because most people won’t charge you for paying on the Internet,” Mr. Purdy said. “When you book a plane ticket online, you don’t get charged a fee.”

Verizon may be imposing a $2 fee on one-time online payments to pressure customers to enroll in an automatic payment option, Mr. Purdy said, because it creates a higher probability that the payments will come in on time.

Mr. Samberg would not say how many people would have paid the fee this month if it existed now. A study conducted by Javelin Strategy Research, a firm that focuses on financial services and payments, found that 23 percent of adults make a last-minute payment to a biller once a month.

Those who would pay it today are people like Grace Lusich, an administrative assistant in San Jose, Calif. She no longer has a bank account after bad experiences with what she believed were unfair overdraft charges. Now, she uses a prepaid debit card from Walmart called the MoneyCard.

“A lot of people in America who are having a hard time paying their bills need a little leeway to wait for the money to come in,” she said. She said she called Verizon each month once she knew her paycheck had been direct-deposited onto her card. Then she makes the payment without ever talking to a human being.

“If you go into their store and an associate helps you, they’re not charging you for that,” she said. “But with the phone, no one is helping me. It’s all automated. And they’re going to accept personal checks, which will cost them more in the long run?”

Mr. Samberg, the Verizon spokesman, said he did not have a breakout of Verizon’s costs for processing various payments.

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.

“They are punishing people who need to wait until the last second,” said David O’Neill, who recently lost his job at a Borders bookstore that closed. He is a former Verizon Wireless customer but took to Twitter anyway on Thursday to argue that the company’s move helps the 1 percent get richer, since it rewards Verizon shareholders.

“We hope it’s not the case that people are forced into paying this,” said Mr. Samberg. “You look at all of the options and choose the one that is best and easiest for you.”

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