When most people think of outrageous fees, they often think of airlines, which have become pros at conjuring up fees for every aspect of the flight -- getting a window seat, checking a bag, even asking for a pillow. But airlines aren't the only businesses trying to make an extra buck, or $50, by charging high and outlandish fees these days.
Here's a round up of some of the worst offenders when it comes to outrageous fees.
1. Carry-on luggage fees
A press release from Spirit Airlines makes it sound like the airline is doing customers a favor by charging $45 for bringing carry-on luggage to the gate. The company says its policy of "bring less; pay less" is a benefit to consumers that "will reduce the number of carry-on bags, which will improve in-flight safety and efficiency by speeding up the boarding and deplaning process, all of which ultimately improve the overall customer experience."
One personal item -- such as a backpack -- is allowed for free, but it must fit under the seat. But a carry-on bag that will only fit in the overhead bin costs $20 for members of its $9 Fare Club who check it in online, $30 for non-members who check it in via phone or online, or $45 for having the gall to bring a carry-on bag to the gate.
Baggage fee collection is a booming business. Airlines in the U.S. collected $769 million in baggage fees during the first three months of the year, according to the New York Times. Baggage fees and reservation changes are just a few of the many fees airlines are charging, but carry-on luggage fees is a new low and one we hope doesn't catch on.
2. Car rental early return fees
You'd think you'd be doing the car rental company a favor by returning a car early, but apparently not. While a discount might not be expected when returning a rental car early, being charged more for doing so is outrageous. Alamo charges $15 when a car is returned a day early, according to USA Today, and there are plenty of online complaints by customers of other companies that charge for early returns.
Of course you can always get around the policy by getting on your plane anyway and calling for roadside assistance to tow the rental car to the rental garage. And don't be late returning a car. Budget has a 29-minute grace period, then charges fees that increase to a full day's late charges after 90 minutes.
3. Hotel fees for towels and hairdryer use
Instead of being nickel-and-dimed to death with individual fees for beach towels and other amenities, hotel customers often face resort fees when they check in. Or worse, when they check out.
But a new hotel chain in London called Tune Hotels recently started charging for costs you'd think would be included in the room rate: $1.60 for a towel, $3 for the use of a hairdryer, and $12 a day for room cleaning. That's how Tune Hotels manages to charge so little for a room -- by charging to use everything in it. Keep going at this rate and we'll have to insert a quarter to use the television.
4. Pay to talk to an employee
You'd think companies would do all they could to provide customer service assistance and keep customers happy. Fee-heavy Spirit Airlines, our friends who charge for carry-on luggage and led the way in charging for baggage and other airline fees, is considering charging customers who wish to speak with one of the airline's employees at the airport, according to ABC News.
Spirit's CEO told the South Florida Sun Sentinel that the day will come when technology will make it possible for an airport kiosk to handle all of the necessary customer check-in transactions at the airport.
"If we are able to do so in a cost effective manner that allows us to lower fares even further, then we will look at this possibility," the company said in the Sun Sentinel story. "Currently, however, we do not have the technology in place to do so." You can bet that the minute that technology is available, not only will that fee be implemented, but there will probably be a lot fewer humans for you to speak with.
5. Early termination fees
We understand that cell phones are cheap because phone companies make it up by getting customers in two-year contracts, but charging $325, as AT&T does, to terminate a contract early seems like highway robbery. Not only does AT&T charge an early termination fee (or ETF) if a customer defects to a competitor, but also if the customer wants to switch to another AT&T calling plan -- or even buy a fancier phone.
"For customers who enter into new two-year service agreements in connection with the purchase of our more advanced, higher end devices, including netbooks and smartphones, the ETF will increase to $325, and be reduced by $10 for each month that you remain with us as a customer during the balance of your two-year service agreement. After that, the ETF will no longer apply," AT&T said when it announced the June 1 change.
In other words, thanks for buying our phone, now give us $325 more to use it and then we'll hold your money ransom so you don't go off to one of our competitors. AT&T also charges a lot more than other companies for its family texting plans. The higher price must be for its excellent and wide-ranging service.
6. Printing a ticket at home
The New York Yankees and New York Mets baseball teams charge fans $2.50 to print their tickets at home. The two teams are the worst offenders in Major League Baseball when it comes to charging people to buy tickets online, with fees actually doubling the prices of some tickets.
Along with paying to print tickets at home, there are processing and convenience fees that add $28.60 in fees to four Yankee tickets with a face value of $88. Four Mets tickets for $84 come with $31.50 in fees above and beyond the ticket price. The percentage of the total cost is higher for lower-priced tickets, prompting a representative from Queens to look into making the fees more fair.
Ticketmaster's CEO recently told the Los Angeles Times that the company plans to end its $2.50 charge for customers printing tickets at home. That story was about concert tickets, but baseball fans hope it applies to all events thereby making a trip out to the ballpark a little less financially painful.
7. Inactive bank account
Bank fees are high enough, but being charged for not using an account is going too far. AmericaNet Bank charges $10 per month after a year of inactivity. That may be why the bank can offer such great interest rates on its Mega Money Market accounts.
A reader at Depositaccounts.com told the web site that a year after setting up an account at AmericaNet Bank, they were charged a $10 monthly fee without advance notice of the fee. "It wasn't until I logged on recently for my quarterly account review I found $20 missing," the reader wrote. "After investigation I found that after one year, if you don't add more money, your account is considered dormant, and AmericaNet Bank starts penalizing your account $10/month every month until you add more money."
In general, accounts are considered inactive after three to five years, when the money can be turned over to the state for people to claim their missing money.
8. Property transfer fee
Freehold Capital Partners has a new way to make money: require home sellers to pay 1% of the sales price to the home builder or other third parties each time the house is resold for 99 years, according to a Wall Street Journal story.
Yes, you read that right -- for 99 years, the transfer fee is split between Freehold and the developer every time the house is sold. If you sell your home for $300,000, you'll owe $3,000. If it's sold a decade later for $600,000, the seller owes $6,000. The transfer fee would be part of a covenant, which are common for subdivisions where homeowners have to comply with rules requiring their dogs to be leashed and that the homes be painted a certain color. The fee comes with the land and can't be waived by buyers or sellers
Freehold, in explaining what it calls the capital recovery fees, says they allow the developer to recover its costs over the lifetime of the home and can make the initial cost to the buyer cheaper by doing so. Instead of paying $250,000 for a house without a fee, it could cost $245,000 with a 1% fee when sold, Freehold helpfully explains. It's spreading the cost of development over successive owners, if the developer actually lowers the home price by whatever the fee would be.
Groups that have come out against transfer fees include the National Association of Realtors and the American Land Title Association. According to the Journal, at a congressional hearing, Rep. Brad Sherman, D-Calif., called the fee a "new predatory financial scheme."
Aaron Crowe is a freelance journalist in the San Francisco Bay Area.
Managing your Portfolio
Keeping your portfolio and financial life fit!View Course »