The Basics

And now, a fee to pay your bill

Even if you settle that phone or cable bill on time, you might be dinged for doing so. Here are some companies' nickel-and-dime strategies -- and how to beat them.

By Karen Aho

Add another to the list of far-out fees: one for paying your bill. On time.

Say you like to give your financial details to a real person rather than a machine. That'll be $5. Or maybe you prefer, or need, to hand your money to someone at the phone or cable company at the last minute to avoid having service cut off. That'll be $5.

Though the practice may sound absurd, it's hardly a surprise given today's blossoming market for creative fee finding. As companies strive to keep listed prices low and earnings high, fees have become a quick and handy back-end way to raise revenue. (See "The 12 most outrageous fees.")

The latest: charges for simply paying your bill.

Increasing numbers of public utilities have outsourced their customer service, removing the option of paying a bill in person on its due date for free. Now, third-party payment centers may charge more than $10 in some states.

The majority of cell phone and cable companies now charge for any contact with a customer-service agent.

Whether it's too late to mail a check, you can't bank online or you just don't trust your account numbers to a machine, no matter. Fees are your future.

"They're billing you for the luxury of paying them," said Harvey Rosenfield, the founder of Consumer Watchdog, a nonprofit advocacy group. "It's increasingly prevalent."

Just passing along the cost of service

Telecommunications companies provide little explanation for these charges, if any. T-Mobile USA, a cellular carrier with 30 million customers and profits of $1.57 billion in 2007, would not give any reason for its $5 charge. When the companies do explain, it's like this: It costs us money to provide this payment option, so we pass the cost along to users to keep our prices competitively low.

In a typically worded answer, Patrick MacElroy, a spokesman for Cablevision Systems, said, "If a customer elects to use the assistance of a customer-service representative on the phone, there is a $5 fee."

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Not every company charges, at least not now. Sprint Nextel, trying to overcome a reputation for poor customer service (it ranked poorly in MSN Money's Customer Service Hall of Shame), says it won't penalize customers this way. "We certainly want to make it easier for our customers to pay in the payment method that's easiest for them," spokeswoman Roni Singleton said.

Even inside their own stores, companies are now sending customers to self-serve kiosks to pay bills with a machine. At least one company, AT&T Wireless, says outright that it will charge $5 to customers who insist on using a store clerk's time to process a bill when a kiosk is available.

Nationally, here's what the large telecommunications companies are charging customers to pay bills.

Television, Internet and digital phones:

  • Comcast: $4 (average; cost may vary by market) to pay by phone with a live agent. Its automated system is free.

  • Time Warner Cable: $5 in a very few markets to pay by phone with a live agent; free in most locations. Its automated system everywhere is free.

  • Cox Communications: $5 (average; cost may vary by market) by phone with a live agent. Its automated system is free.

  • Cablevision Systems: $5 by phone with live agent. Its automated system is free.

  • Charter: $1.99 by phone with live agent. Its automated system is free.

  • Verizon Telecom: $3.50 to pay by phone with an automated system. Single bill payments are processed by a third-party vendor that does not use live agents.

  • Qwest: no charge.

Cell phones:

  • Verizon Wireless: $3 to pay in person at an authorized payment center. There's no charge at self-serve kiosks in Verizon stores.

  • AT&T Wireless: $5 to pay by phone with a live agent. Its automated system is free. There's a $5 fee to pay through a clerk at a store; payments are free at self-serve kiosks.

  • T-Mobile: $5 by phone with a live agent.

  • U.S. Cellular, Sprint Nextel, Alltell, Qwest and Vonage: no charges.

Power for the powerless

Across the country, nearly 25% of utility customers pay their bills in person. But utilities are closing payment offices to save money, urging customers to pay online and sending cash customers to third-party check-cashing centers that tack on extra fees. In states that don't regulate these centers, the fees can be as high as $12.95 to process a single bill.

And even in states that cap the fees, the payment centers are eager to lend money, at high interest rates, to people who don't have enough to pay their bills.

Florida's third-largest public power utility recently decided to shutter its downtown payment center, where a quarter of its 100,000 customers pay their bill each month. Customers paying by check or cash at the last minute will have to go to one of 41 payment centers and pay an additional fee of at least $1 for same-day credit at the utility company.

Continued: Customer-service jobs cut

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