And Now, a Fee to Pay Your Bill

Publication: MSN Money

Author: Karen Aho

08/05/2008 - 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.

Fees began as a method to nudge customers into less costly behavior, said Matt Fellowes, the project director at The Pew Charitable Trusts. (It costs a company $5 to $7, on average, for an agent to process a bill payment over the phone versus $1 to $2 for an automated system, according to Jupiter Research.)

But along the way, "these institutions discovered that there's actually opportunity to build revenue off those consumers that won't be nudged," Fellowes said. "So the fees became not just punitive for these individuals, they became kind of profit drivers for these institutions." (Banks raked in nearly $40 billion in fees in the States last year; credit card fees accounted for $18.1 billion.)

Read the complete article And Now, a Fee to Pay Your Bill on the MSN Money Web site.

Pew is no longer active in this line of work, but for more information visit the Safe Banking Opportunities Project on

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