Verizon to charge customers $2 for paying their bills. What gives?
A new fee, to take effect Jan. 15, applies to customers making one-time payments using a debit card or credit card online or by phone. Verizon cites extra costs for such transactions, but consumers are fuming.
A plan by Verizon Wireless to tack on a $2 "convenience fee" for some online bill payers has stirred an upwelling of frustration and disbelief among the phone firm's customers.
Huh, they ask? You want us to pay you for paying you?
The charge, scheduled to take effect Jan. 15, doesn't affect people who autopay their bills each month. It's all about one-time payments transacted with a debit or credit card online or by phone.
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Verizon Wireless says it incurs extra costs when these one-time payments go through. The company appears to be pushing for more customers to enroll in auto-payment plans.
But, if you haven't noticed, consumers often don't like to be pushed. And, because few companies send bills to as many people as Verizon does, that translates into a public relations challenge.
The social network Twitter is now filling up, second by second, with posts by people commenting on the change. A couple of examples:
"Seriously disgusted #verizon plans to charge me $2 for ability to pay bill online. This 10+ yr customer is thinking of switching," says the user who identifies herself as Sarah Ivey Rock.
Some industry analysts liken the uproar to what happened at Bank of America a couple of months ago, when the bank first announced debit-card fee hikes and then retracted the plan amid a consumer revolt.
At a time when many companies find it challenging to get consumers to accept price hikes, raising fees is one potential way to boost profitability.
Unlike Bank of America, though, Verizon doesn't appear to be financially strapped. Its stock price is up this year, standing about where it did when the US entered recession in 2007. Bank of America's share price has fallen about 60 percent this year.
A Twitter account operated by Verizon Wireless has been mostly silent on the issue since the $2 fee news came out Thursday. But in one post early Thursday, the company emphasized that "Customers have options to avoid single payment fees that start 1/15, including electronic check or Autopay."
That's an important point. Whatever one thinks of the fees, they don't apply to all online or telephone payments – only to people who click or call in a one-time payment.
Ways to avoid the $2 fee include mailing in a paper check, using electronic checks, visiting a Verizon store, paying online from your home-banking service, or enrolling in an autopay plan that draws monthly on your debit card or credit card.
Verizon has enjoyed strong ratings from Consumer Reports in recent years, in part for the relative reliability of its network. But its service plans don't come cheap.