Verizon Adds $2 Charge For Paying Your Bill Online

An anonymous reader writes with this excerpt from geek.com (based on a report at Droid Life) that makes me consider quitting or at least suspending the very expensive service 3G data service I get from Verizon: "With 2012 about to start, it seems Verizon has decided paying your bill online or over the phone is now worthy of an extra charge. So, from January 15, anyone choosing to pay their monthly bill using either method will incur a $2 charge. Verizon is classing the charge as a 'convenience fee' which translates into them deciding allowing you to pay either online or over the phone is a convenience. They also explain in the FAQ above that the fee allows them, 'to continue to support these bill payment options.' Really, Verizon? When did offering online payments or accepting phone calls from customers get so much more expensive?"

Fee is waived for certain cases.

[bongey]

The fee is waived if you pay by electronic check or auto pay. This only effects last minute payments.

Re:Ah, America!

[InterestingFella]

Why are you even using credit cards to pay bills? In Europe bank transfers are used for such and are entirely free for consumers. Companies have to pay some if they have huge amount of transfers. And that is within the whole SEPA-zone (most of western european countries) too, so it's not an issue between different jurisdictions and size.

It's about getting people to sign up for autopay

[Anonymous Coward]

The fee is waived for autopay.

The economy sucks, they want all their accounts on autopay so the phone bill gets taken out before other bills if the customer's money can't pay them all.

Beware of autopay. Once you bill is autopaid you have a lot less leverage in billing disputes.

Re:Arent online payments actuallt cheaper for them

[Anonymous Coward]

Cash and cheques don't incur the same fees as online processing, which usually entail VISA/MC/AMEX/etc taking their 2% or more of the transaction in fees. In addition, they are Non Qualified transactions. This is because the card is not present, thus there is a higher likelihood that there could be a charge back, so the processing company charges an additional fee.

I think Verizon is idiotic for adding this surcharge that is so obviously a cash grab, but I would like to dispel the idea that the online transactions are inherently cheaper. They have staff at retail outlets for sales already, so the fixed costs for the rentals are already taken into account.

Re:Ah, America!

[Leebert]

This is completely reverse to what companies in my country have started doing.

Oh, that's very much the case here in the US as well. To the point of being obnoxious.

I still opt for paper bills and mail in checks for the folks who don't take credit cards.

Perhaps it's because someone at Verizon Wireless was bothered at how much they were paying for credit/debit card transaction fees, and figured this was the way to recoup that cost.

Re:Ah, America!

[cyberfunk2]

There's two obvious reasons for this: Points on my credit card (i.e. free money/miles/ etc), and convienience. It allows me to watch only my credit card bill and pay it once. Also, there's a little bit of money to made on the float (not much these days w/ the low interest rates).

Re:Ah, America!

[PhotoJim]

Mail them a cheque (err, check, my American friends) and make a point. If millions of customers did this, their payment processing costs would go through the roof.

Verizon does ACH bill pay

[multimediavt]

I have mine tied directly to my checking account and payments are done as ACH at no cost to me. Verizon also pushed me toward One Bill and then paperless billing to save the environment, and now they want to charge me $2.00 a month to do their job: I'm sorry, when I enter all the data and submit my bill every month *I AM DOING THE WORK FOR YOU!* It should not cost them a dime for me to submit my bill, directly to their systems, online.

Re:Ah, America!

[jeffmeden]

It's the complete reverse in the rest of America, too. Everyone else is pushing for online payment and electronic billing because it saves on paper and postage costs.

Verizon is the first company I've seen try to pull an asshat move like this. I think why Verizon is trying it now involves a couple things. For one, large telecoms like Verizon and AT&T have for years felt entitled to licenses to print money hand over fist, and whenever revenue drops due to market changes or technological development, their biggest priority is to find somewhere else to recoup that lost revenue. My guess here is that Verizon noticed that a majority of their customers were already paying their bills online, so they decided to start charging a fee to do it, knowing that their customer base already appreciates the convenience of online bill payment and inertia would prevent them from paying by mail. Other service providers, public utilities for example, likely have much older, entrenched, and less 'tech-savvy' customers so they need to provide incentives to move towards online billing and its associated cost savings.

A majority of their customers certainly pay their bills online, but they do it automatically and are hence exempt from this fee. Verizon is doing something very simple, encouraging their customers to prefer the automatic process over the manual one. There is undoubtedly a price break to handling the exact same payment method month after month vs handling a unique one each time, and they know they will save more money than they will lose in pissed off customers.

Re:Ah, America!

[trum4n]

BUT, having a credit card, and using it, and paying it off is actually all but required in this country. Having no credit history is just as damning as bankruptcy in America. Right now, I'm applying for a mortgage. I was told by the bank that my $20k+ in student loans and my $18k car loan...help me. It's twisted, but true. Also, living on credit and using a credit card for ease are not the same. Also, many banks DO charge for external transfers of money here.

Re:Ah, America!

[dogmatixpsych]

I use a credit card for everything I can because of the rewards I earn. I've received thousands of dollars in rewards (I just received what amounts to $800 in rewards for signing up with a credit card) and cash back (anywhere from 1% - 20% per transaction, depending on the situation and retailer) over the years. The trick is to use credit cards like debit cards by paying them off completely every month. Living on credit can be stupid (most people need a mortgage to afford a house though; having a mortgage is "living on credit") but we shouldn't confuse using credit cards with living on credit. I'll use debit cards as soon as they offer rewards as good as credit cards (they won't though because of regulations as well as other reasons).

Re:Ah, America!

[jovius]

Credit cards or checks are not involved at all at least in Finland. I don't know if using them is even possible. The company sends a bill by email or then the monthly amount is directly charged from the given bank account. The customer, bank and a company can have a direct charging agreement. I'm also able to postpone the due date without an extra charge at least with my provider. Practically all of the bills are paid online and there isn't a culture of credit in the same sense as in the US. Anything paper related comes with an extra charge. The bank I use doesn't even provide cash services in their offices.

Re:Ah, America!

[NardoPolo88]

I think you missed the point. They are recouping the fees charged by Visa and Master Card. Those fees have recently increased by the way. This is way you can still pay on line for *FREE* if you pay though your checking account. This is also why most of the smaller restaurants in my area and I'm sure other areas of the US have $10 and $20 minimums for credit cards. It is also why my uncle, who was also a small business owner, did like it when people paid with credit cards. You really should look into where this money goes before judging verizon to harshly for trying to get some of that money back. I for one will continue to pay online as I always have. Through my checking account that they already have stored on their server.

Re:Ah, America!

[fedos]

Because in the US the banks actually discourage transfers by making them inconvenient and costly. For example, Bank of America charges $25 to send a domestic wire transfer and $12 to receive one.

RTFA to put this in perspective

[SwansonMarpalum]

The fee does not apply to either ACH or AutoPay transactions. This leaves credit card payment as the only mechanism which does incur the fee. Verizon can't come out and say that the fee is because you're using a credit card, because the terms between credit card processors (e.g. MasterCard, VISA) and merchants (in this case, Verizon) specifically forbid altering the price if a credit card is used. When you pay a merchant with a credit card, the merchant only gets 97-99% of the price you pay with the card. 1-3% goes to the credit card company. Verizon can accept payment in any of three ways, but one of them costs Verizon more than the other two ways, and they consequently charge a fee. It's not exactly in-line with their costs, but considering what a monthly phone bill for a smart phone costs, it's not grossly far off, either.

Re:Ah, America!

[virg_mattes]

Well, in our world, for one. Not paying a debt until it's due doesn't constitute credit, it's called "float" in financial circles. If someone sells you a good or service and doesn't require payment until the end of the month, then it's not "buying on credit" to hold off paying until that date. So, in short, you're right that it's not length of repayment that's a factor, but whether you're being extended credit (buying something for the promise of repayment against future income) or whether you're being given a float to allow you to gather the funds in the form agreed upon (which is why so many businesses started offering due dates for purchases in the first place).

Virg

Re:It's about getting people to sign up for autopa

[digitalsolo]

I autopay with my VISA. If I need to dispute, and VZW wants to argue, I call my bank, and they handle it. Done it before.

Comment removed

[account_deleted]

Comment removed based on user account deletion

Re:Ah, America!

[tnk1]

If that is your definition of "living on credit", then we need to understand that the term is not what is meant by most people who consider credit corrosive. When people talk about living on credit as a bad thing, it is carrying balances month to month and accepting the interest rates while only paying the minimum. That does happen all too frequently in the US and is a serious structural problem.

However, using credit as a float is a sound business practice that has been used for centuries to ensure that payments can be made as needed while waiting for your customers/employers to pay up on their due date. You then pay off the float when the influx of cash comes in on a monthly basis, for instance. You may incur charges or interest, but these are usually fairly minimal compared to what you would deal with by carrying a balance with no end in sight.

Re:Ah, America!

[nelsonal]

It doesn't need to be a credit account, US ATM cards are frequently branded Visa/Mastercard and pay rewards when processed as credit cards (but they come from your account like a debit card, though it usually takes an extra day for processing).

Re:Verizon does ACH bill pay

[devman]

If you read the fine article you'd know ACH transactions are exempt. So are all payments that are set up as recurring in Verizion's system, including credit cards. The only thing that gets charged as far as I can tell (and I could be wrong about this) is one off credit card payments. This is really a non-story.

Re:Ah, America!

[AngryDeuce]

Contrary to popular belief, neither Verizon nor any other business is required to accept pennies, or any other method of payment it chooses not to, for that matter.

The only entity that is required to honor pennies is the Federal Reserve and, by extension (I would assume), the government. So yeah, you can go down to the county treasurer's office and dump thousands of pennies on them, but show up at a local Verizon kiosk with 30 pounds of pennies and they are fully within their rights to tell you to go pound sand. They could even require you to pay them in gold if you signed a contract agreeing to do so. Hell, they could require you to pay in chocolate. There's nothing saying they have to accept the equivalent amount of currency in it's place, either; you agree to pay in gold, you are obligated to pay in gold.

Obviously, in the interests of customer service, most businesses don't start a hissy fit over things like this, but there are limits. In my days working retail I used to turn people away with large amounts of change all the time, because I did not have the time nor resources to spend counting out pennies or dimes, being the sole employee on shift at the time, nor was I under any obligation to do so. The same principles allowing a business to deny excessively small currency like pennies are what allows them to deny large currencies, as well; we also accepted no bills larger than $20 as do many convenience stores.

They might have a problem with this in NYS....

[Shakrai]

New York State General Business Law Section 518: Credit card surcharge prohibited.

No seller in any sales transaction may impose a surcharge on a holder who elects to use a credit card in lieu of payment by cash, check, or similar means.
Any seller who violates the provisions of this section shall be guilty of a misdemeanor punishable by a fine not to exceed five hundred dollars or a term of imprisonment up to one year, or both.

Re:Ah, America!

[AngryDeuce]

This is nothing new, I've been paying a "convenience fee" to my electric company for paying online for years now. Ditto with my cable bill.

Hell, they even charge a "convenience fee" at the DMV office here in Wisconsin when you renew online, which doesn't make a single fucking shred of sense at all, considering that they're already understaffed at the actual DMV offices (based on the ridiculous wait I experience every time I am forced to go down there) and pay the people working the counters considerably more than most counter workers get paid. If anything, you would think that the state would be fully encouraging people to pay online, but it seems even the state isn't opposed to sucking a little extra money off the top with "convenience fees".

I'm not saying it's right, mind you, I'm just saying that this is nothing out of the ordinary.

No surcharges allowed

[tepples]

The credit card companies don't want merchants to add a surcharge for credit card payment. Calling it a "convenience fee" and then "waiving" it for ACH payment is a way for merchants to circumvent these contractual restrictions, much as some gas stations give a discount on gas purchased with a gift card (and gift cards must be paid for with cash or EBT card).

Re:Phone Company?

[Leebert]

Counter-intuitively, Verizon and Verizon Wireless are different companies. Verizon owns a controlling share of Verizon Wireless, but a huge chunk of VZW is owned by Vodafone. (VZW is actually a DBA (Doing Business As), the company's real name is Cellco Parnership. Go figure.)

Re:Ah, America!

[hajile]

Wrong. From the Federal reserve FAQ http://www.federalreserve.gov/faqs/currency_12772.htm [federalreserve.gov]

Is it legal for a business in the United States to refuse cash as a form of payment? Section 31 U.S.C. 5103, entitled "Legal tender," states: "United States coins and currency [including Federal reserve notes and circulating notes of Federal reserve banks and national banks] are legal tender for all debts, public charges, taxes, and dues." This statute means that all United States money as identified above is a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person, or an organization must accept currency or coins as payment for goods or services. Private businesses are free to develop their own policies on whether to accept cash unless there is a state law which says otherwise.

Basically, if something can be sent to a collections agency (in this case the internal Verizon collections agency), the it is a DEBT and thus the creditor (VerizonWireless) CANNOT refuse payment. Since payment of a Verizon bill is frequently after some or all of the service has been given, their is debt (money owed for services previous rendered). Retail is different because there is no debt owed to the retailer since the merchandise ownership is only exchanges (barring a contract) after the payment has been given. (technically, it could be argued in some cases that a verbal contract has been established and thus a debt has been agreed to).