June 17, 2024

Verizon Wireless Abandons $2 Fee After Consumer Outcry

The consumer vitriol, which cascaded across Twitter and onto blogs and petitions all around the Web, struck a chord with a company that was clearly not expecting it.

“The company made the decision in response to customer feedback about the plan, which was designed to improve the efficiency of those transactions,” Verizon Wireless said in a statement referring to the reversal.

That a company with revenue of $15 billion in the most recent quarter would have to quickly change course over such a small fee suggests something particular about its business and others like it.

Similar to fee-bedeviled airline passengers with little choice on many nonstop flights, or bank customers who do not want to spend hours untangling automated payments so they can switch institutions, Verizon Wireless customers have limited options because they are locked into multiyear contracts. And they apparently did not like being told that it would cost money to pay money to the company.

The consumer outcry may also reflect the national mood — and some companies’ misreading of it, according to some analysts.

“I just think people are sick of being nickeled and dimed by big companies,” said Edgar Dworsky, founder of ConsumerWorld.org. “And it’s just baffling to me why a company like Verizon Wireless or Bank of America doesn’t do market testing on something like this first. It doesn’t take a genius to figure out that there is going to be a backlash.”

What was surprising about the Verizon Wireless rollback was how quickly it occurred. It took consumers about a month to persuade Bank of America to rescind its plan to charge a $5 monthly fee to people who used their debit card for purchases.

But with Verizon Wireless, the corporate change of heart took only a day, even though it is the week after Christmas when companies often drop bad news in the hope that fewer people are paying attention.

“The multiplication effect with things like Twitter is incredible,” said Ron Shevlin, senior analyst at the Aite Group in Boston. “And because of the national mood, it hits the boiling point really quickly.”

Verizon Wireless may also been have moved to change its mind when the Federal Communications Commission put out word earlier Friday that it thought the company’s actions merited closer scrutiny.

If the company had taken a different tack, it might have succeeded in convincing consumers that some kind of fee increase was necessary, Mr. Shevlin said.

“The easy thing would have been to be more explicit about what the costs were that were causing it to add this fee,” he said.

The company, for instance, might have explained how few people were going to pay the fee, which was supposed to be for one-time credit or debit card payments by phone or on the company’s Web site. It also could have explained how much higher the costs were, on a percentage basis, to accept payments in that way, versus regular, monthly credit card billing, which would have remained free.

Verizon Wireless declined a request for much of this information on Thursday and did not respond to follow-up requests on Friday.

Mr. Shevlin also said that Verizon Wireless, like Bank of America before it, said it was responding to customer feedback. But both companies seemed to have missed the opportunity to get accurate feedback before putting the fees in place.

“Why not post it on your Facebook page?” he said. “Maybe the feedback would have been just as bad, but then you’re seen as heroes for listening to feedback ahead of time. These firms are not reading the mood or living in the real world.”

Mr. Dworsky is on Verizon’s consumer advisory panel (and did not know about the fee ahead of time). But he said he chose to speak out about the move anyway, saying that he had a bigger concern about what the Wireless unit’s failed move portends.

“Who is going to try to tack on a fee next for using a credit card?” he said. “Is it the local grocery store? A department store? That is the bigger worry.”

Mr. Dworsky, a former assistant attorney general for consumer protection in Massachusetts, spent Friday morning reading credit card merchant agreements and various federal regulations in the hope that the proposed surcharge was actually against the rules.

“I’m glad this got killed in its infancy,” he said. “But I don’t think we’ve seen the end of it. Hopefully, the collective consumer voice will be able to change the next company’s planned fee.”

Article source: http://feeds.nytimes.com/click.phdo?i=219b22c410c33996130c38a714818d05

Bucks Blog: The New Rules About Consumer Fees

Does the fee have any relationship whatsoever to the cost of the service? Do companies understand that they don’t have much leeway if we already are angry with them? Is a company telling the whole truth when it imposes a new fee? Are we getting something really neat in return? And are we worrying too much about the wrong types of fees — and not enough about ones that are truly consequential?

These are the five questions I posed in this weekend’s Your Money column. In the wake of the Bank of America debit-card fee fiasco, it sure seems as if we need a new set of standards for what constitutes a reasonable fee. So this week, I asked some of the smartest consumers I know to weigh in on the question.

Given that we have a pretty savvy bunch here on Bucks, too, I’d like to hear what you think about the principles I suggested in the column, the fees you hate (and others that you gladly pay) and about your own big ideas about when to get mad and when to just pay.

Article source: http://feeds.nytimes.com/click.phdo?i=5ca8fbec77b6a2512af39706536f6d7a

Bucks Blog: Wednesday Reading: A Few Drinks a Week Raise Breast Cancer Risk

November 02

Wednesday Reading: A Few Drinks a Week Raise Breast Cancer Risk

A few drinks a week raises the risk of breast cancer, Bank of America drops its plan for a debit-card fee, tax rules allow more generous giving and other consumer-focused news from The New York Times.

Article source: http://feeds.nytimes.com/click.phdo?i=7c3da169447f69b889471c921393068f

Bucks: High-Yield Checking Accounts, if You Qualify

It’s a bit harder to find nationally available, high-yield checking accounts, but they are out there. And they can offer significantly better interest rates than a traditional account — if you meet their requirements.

An annual survey from Bankrate.com found at least 57 banks offering such accounts, with 27 available nationally. (The findings aren’t necessarily all-inclusive — there could be other accounts out there — but the list represents results culled from a survey of 155 banks and credit unions.)

The average annual percentage yield on the accounts was 2.56 percent, compared with a paltry 0.11 percent for a traditional interest-bearing account. That’s a good deal, for a federally insured account that allows quick access to your money, Greg McBride, Bankrate’s senior financial analyst, said.

There are caveats, of course. Most of the accounts require at least one automatic deposit or payment a month, and a minimum of 10 debit transactions a month, to get the best rate. Failing to meet the minimum requirements results in a steep drop in interest — typically, down to the measly interest of a regular account. So if you’re someone who uses your debit card for everything, the accounts make sense. If you’re just an occasional debit card user, you won’t get the benefit of the higher rate. “It doesn’t do any good to average 10 transactions a month,” Mr. McBride says. “You need to hit the mark every month.”

Most of the accounts cap the balance that is eligible for the high rate — typically, $10,000 to $25,000. So to get the best deal, you have to compare both the rate as well as the balance limit. BankTexas, for instance, offers a rate of 3.25 percent, but caps the eligible balance at $10,000, the survey found. North Country Savings Bank, by contrast, has a higher cap of $50,000 — but a rate of 1.75 percent.

Despite pending caps in the rates that banks are paid for processing debit card transactions— so-called swipe fees — most banks haven’t increased the number of debit transactions required to qualify for high-yield accounts, Mr. McBride said. That may change, however, once the caps take effect later this summer.

Has your high-yield account started requiring more debit transactions?

Article source: http://feeds.nytimes.com/click.phdo?i=7095737c860606804e243e78f220c9b2

Bucks: Remain Calm Over the PlayStation Breach

Fans of Sony’s PlayStation already were upset that they couldn’t go play their favorite video games with their friends on the Internet. The PlayStation’s online network has been down since last week in the aftermath of a hacking incident.

Now, the network’s 77 million account holders have learned that the hackers obtained personal information, like their names, street addresses, e-mail addresses and PlayStation account user names and passwords.

A red-faced Sony said it couldn’t be sure, but that credit card numbers and expiration dates might have been compromised, too. The company said it was warning account holders about the possible credit card breach in “an abundance of caution.”

So what should you really be worried about, if you’re a PlayStation network account holder? Obviously, no one wants to have their credit card information taken and possibly used for nefarious purposes. But the odds of serious financial damage from the incident appear to be low.

For starters, the hackers in this type of situation are often looking for notoriety, rather than to resell financial information. (One group known for doing this sort of thing disclaimed responsibility for the PlayStation hack but sounded sort of disappointed. “For once, we didn’t do it.”) And even if you were unlucky enough to be one of the 77 million card numbers whose account information ended up being resold for criminal purposes, you’d see the suspicious charges on your account. We all know by now that we should be monitoring our credit card statements regularly. Right?

The incident does suggest that it’s probably best to use credit cards for continuing automatic payments, like subscriptions for gaming networks and other services, rather than a debit card, if that’s an option. At least with a credit card, you get a warning that something’s not right, and your liability for unauthorized use is limited. With a debit card, the funds could just vanish from your bank account. Even with a debit card, though, your losses are generally limited if you report the problem to your bank promptly. (Again, you’re supposed to be watching for this sort of thing.)

So it seems as though following the standard advice about preventing identity theft -– monitor your accounts and report problems promptly — should allay concerns about serious problems arising from this incident. Do you agree?

Article source: http://feeds.nytimes.com/click.phdo?i=f37e27eadfdb0277e0acd67d031ba497