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Americans Are Paying Billions In Hidden Fees

We’ve all thought about it before when buying a ticket to a concert or a sporting event.  How did the price of the seat come up at $200 a seat and then by the time we checked out it cost $250 a seat?  When you last set up your phone bill and they told you it would be $50 a month all in and then you got a bill for almost $70 a month, didn’t you wonder what made up that extra money? A recent study done by Consumer Reports showed that 85% of Americans have experienced a hidden or unexpected fee over the past two years for a service that they have used. In 2018 alone surprise charges included more than 7.6 billion in reservation changes and baggage fees for the airlines and almost 3 billion in resort fees for hotels throughout the United States.  Are we all getting chewed up by these unknown and hidden fees?

Who Are The Top Culprits Of These Hidden Fees?

  • Administrative Fees/Surcharges: Telephone companies are the top culprit by far – and some hidden fees may be disguised as mandatory surcharges. When I recently read my Verizon monthly phone bill, there were more than $6 of administrative charges on the bill with no explanation whatsoever for what those charges were on the bill.
  • Service Fees: Entertainment and sports events aren’t far behind the phone companies. Service charges for buying these tickets online can run between 15% to 25% of the ticket price, and I have seen more than 30% for upcharges on parking passes.
  • Resort Fees: Hotels in many places add this charge for simple items such as the use of the pool, the fitness center, and other amenities. Be wary by the way of valet parking, especially when you rent a car, as those charges can be $40 to $50 a day.

These industries who are killing us with these hidden fees that can range from under $1 in some cases to more than $25 or $50 on higher ticket items call it drip pricing.  What I call it is the ‘boil the frog’ theory.  This goes under the theory that the companies will keep charging you money until you decide it is too hot and you jump out of the boiling pot.  But what if you don’t even know that the temperature is rising?  The fact is most of us don’t even read our bills anymore yet question the line item charges on the bill.  Have you noticed all the new fees and charges when you take an airplane flight?

The simple best and the first thing you can do is read the fine print of whatever contract you are signing.  It’s kind of like when you rent a car and realize that if you don’t prepay to have the tank filled when you return it, they will charge you something in the range of $8 or $9 a gallon for any gas you don’t fill up before you return.  The fine print is typically found on the last page of the contract and this is where the ticky tacky fees are charged on to your bill or maybe on a line item just called other costs.

If you do get hit with surprise charges, my advice is to fight back online and go directly to the company Facebook or Twitter page and complain.  It’s the quickest way to get them to work with you because none of the companies want bad online press or reviews.  You can always call the Better Business Bureau or The Consumer Federal Protection Bureau, but that may be a long and winding road to get your money back. The consumer reports survey shows that only about one-third of the people who fight the big companies actually win.

As your consumer advocate and after years of giving helpful hints on your smart money moves, I highly recommend you read your bills and review the fine print of everything you sign.  That is the best smart money move you can make if you don’t want to get ripped off!

About the author  ⁄ Ted Jenkin @ Your Smart Money Moves

Ted Jenkin @ Your Smart Money Moves

Hey!

My friends and family all think I’m a workaholic, but I say I’m just a guy that loves to help people do better in life.

My mother is still the only one that calls me by my real name Theodore Michael, my wife calls me Teddy, but for the rest of you it is just plain old Ted.

Ever since I was a little kid, I always loved money and being an entrepreneur. In fact, I still have cassette tapes of me talking to my grandmother at the age of five and my mother tells me all the time how much I played with money as a kid...

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Ted Jenkin is a frequent guest columnist for the Wall Street Journal and Headline News Weekend Express. He is the co-CEO of oXYGen Financial. You can follow him on LinkedIn @ www.linkedin.com/in/theceoadvisor or on Twitter @tedjenkin.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice.

The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor regarding your individual situation. 

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