Braunholtz: The evils of tacked-on fees
Vail CO, Colorado
Thanks to Vail’s compact size and central attraction it’s one of those increasingly rare places where people of different ages, backgrounds, incomes etc. still mix together ” at least until the developers of gated “communities” and resorts succeed in splintering the valley.
The Snow Daze Social Distortion concert illustrated this pretty well as retired punks nostalgic for past glories bounced around with youths angry and impatient for the future. It was an eclectic mix of mosh ” which you really have to try, at least for a song, to get the full experience.
The concert also revealed another uniquely Vail demographic. The men’s restrooms sported a long line while the women’s ones had none. It was worth waiting in line to see the looks of surprise, joy and exclamations of “wow this is cool and different” from the girls as they enjoyed zipping in and out of their restroom.
The concerts, events and snow fall of Snow Daze combined for a memorable week. The only sour point for me was the extra fees added on whenever you buy a concert ticket these days.
The annoyance caused is out of all proportion to the extra dollars you get ripped for. It’s partly the principle but more the Orwellian business language used to describe these unscrupulous add-ons. There is nothing remotely convenient about a “convenience fee.”
It can’t be good business to annoy your customers so much; it’s got to be better to just charge the full price up front ” though maybe not if you check out the industry you bought the ticket with.
Credit card companies happily spring all kinds of fees and penalties on their customers.
A 3-percent fee for overseas use, trailing interest fees ” where you owe interest even after paying you balance in full ” rates of 30 percent triggered by a late utility bill, phone fees, etc. as well as the expected but exorbitant late and limit fees.
The limits of these fees are set by the states in which the operation is based.
Delaware and South Dakota are popular because they have no limits.
Credit-card fee revenue rose 15 percent from 2004 to 2006 to $17 billion. Consumers aren’t building debt as quickly as they used to, so to make up for this loss in revenue the fees increase. They want your money whether you spend it or not. Their spokesmen like to point out that this is all clearly laid out in the consumer agreement. Apparently they’ve never read one ” or have a different understanding of the word “clear” than does the dictionary.
Recent Congressional hearings on predatory credit card practices agree, finding their disclosures incomprehensible with terms and traps spread out over 30 pages.
In the 1980s, a credit card disclosure statement consisted of one page. Now, you may not even know the interest rate until after approval.
Our new Congress wants to curtail some of their worst practices. This is a welcome change from the old Republican Congress, which invited the banking industry to write new laws that helped themselves at our expense and created a broken market where people can pay back many times their original debt ” and still be sucked under by accumulated fees and penalties with very high rates of interest. They rewrote the bankruptcy laws to make escape from their clutches that much harder.
It’s a contrast to the rough and tumble community of a mosh pit, where if someone stumbles, everyone pauses to pull them up onto their feet again.
Much of the banking industry instead looks to bury you.
They’ve created a market that doesn’t work, and this helps no one in the long run.
Alan Braunholtz of Vail writes a biweekly column for the Daily. Send comments or questions to firstname.lastname@example.org.