So somebody, somewhere in the company figured out that they could save/make $X billon by charging a $2 "convenience fee" or getting their customers to switch over to ACH transactions thus saving 2% - 3% they're losing to credit card companies ... and since customers are frequently locked in by contracts ... or with hardware that won't work on other networks ... or don't even know what a routing number is ... they're captive.
Class action lawsuit ... lawyers get paid ... customers maybe get a coupon for something useless in a year or two, or maybe nothing at all ... and the world keeps spinning.
Maximize shareholder value! Beat those quarterly estimates! Make your customer relationship more difficult! Can you hear me now?
Thanks for writing my catharsis for me. Fucking exactly.
I can't wait until we're past this moronic "maximize short-term pennies along with long-term loathing!" mindset.
One of the first things taught about negotiating is, unless you're about to leave the planet never to return, don't make one-sided deals. Eventually they catch up with you, if only because no one wants to work with you anymore. It's such a valuable lesson. When will corporate America realize there's more money in the long game?
It's cynical, but one has to at least consider that the reason is because there isn't more money in the long game. Over time all markets become commoditized, which is sort of a "one sided contract" in the consumers favor. This kind of cheating can be seen as attempt by the service providers to fight that trend.
Oh, there's still money in it. Just not at the margins that Verizon has grown accustomed to. And I think this sort of commodification is still a long way out. The capital necessary to build the nation's largest wireless network is only available to a handful of companies.
Long-term: If you're an executive and you haven't taken your compensation and moved to greener pastures, bribe the government to crush your better serving competition before they get the customers and the money.
I think "Corporate America" has been in this game for at least a hundred years, possibly longer. I'm not saying I agree with it, but obviously the negatives aren't as bad as you think they are; Corporate America seems alive and well and ready to continue another hundred years. Let's hope we can regain control of our "representatives" in government soon.
This is exactly the definition of maximizing short term gain for long term pain. Customers need to be able to vote with their Feet (and dollars) to nip this kind of idiocy in the bud.
I hope this extra fee makes all existing contracts breakable without penalties or early termination fees.
The degree of cynical "squeeze more blood from the turnip" thinking is sickening.
Here's the beauty of being Verizon: your phones are CDMA or derived technology, and will not work on any other carrier that does not wish to explicitly allow 'your' phones, and you easily can and do disallow other carrier's CDMA phones to work with your network. Your customers might be out of your current contract, but the only way they can get connected is to sign a new one.
At the risk of sounding like the old guy crabbing about how easy the younger generation has it, do you remember when there were no mobile phones? When you left the house or the office, you were just basically unreachable. If you needed to call someone, you had to find a pay phone and hope you had change, maybe if it was a real emergency you would call collect. You paid per call, and if long distance was involved it was on the order of dollars. For ONE call.
Texting, mobile apps, the ability to call anyone from pretty much anywhere all unlimited, with the phone itself amortized into the monthly bill, for what? $30 a month? $40, $50? A BARGAIN.
And it's not like this fee isn't easy enough to avoid. Sign up for the recurring plan, or pay with an ACH, or send in a paper check if you think YOUR time to deal with a paper bill, write a check, find a stamp, address an envelope, and trek out to the mailbox is worth less than $2.
Back in my day, we had to get the local messenger to traverse the plains of ye olde England to give word to townsfolk when we had a contrarian point of view we wanted to express. Even then we were lucky; most other people were decried as heretics and publicly hanged. And that was before Cromwell.
Now we pay £15 a month to be able to click a button and do it instantly. And it's not like this £15 isn't easy enough to avoid when you can travel to a country with medieval values and hire a messenger to do your bidding.
I believe any change in a cell phone contract, such as a new fee, allows you to terminate the contract without penalty. Of course 99.9% of customers won't do that, but it is an option.
It has to be a material change... this might not constitute one, especially if the contract says Verizon is free to add or remove payment methods or something along those lines.
If the contract doesn't explicitly state you get to use a credit/debit card, then they're not really under any obligation to accept it at all, much less for free. After all, you can always do it the old-fashioned way and mail in a check.
I don't agree with that. When I signed my contract with Verizon, they offered online payments via credit card as a free-of-charge option for payment. By charging for that, they are materially changing the nature of our agreement, regardless of whether it was in the contract.
Take it to the extreme: Since method of payment isn't stipulated at all in the agreement, they could just as easily say "Starting 1/15/2012, any payments not made in person at our payment processing facility in Kodiak, Alaska will be subject to a $100 convenience fee." Would that be ok? At what point does it become not ok?
IANAL, but I would expect the uniform commercial code to cover what payment methods are allowed if not stipulated in a contract. For example, in § 2-511 of the UCC (http://www.law.cornell.edu/ucc/2/article2.htm#s2-511) "Tender of payment is sufficient when made by any means or in any manner current in the ordinary course of business unless the seller demands payment in legal tender and gives any extension of time reasonably necessary to procure it."
I'm not sure if leaving out such a demand in the contract bars them from making one in the future, or if a court would recognize such a right when it is unreasonably burdensome on the part of the consumer, however - or if they would allow the payer to offset their costs incurred in delivering the legal tender to the payee. That said, if anyone knows of case history regarding this, it would be very interesting to read :)
From the discussion of this on reddit, it seems to depend on whether or not the contract allows for addition or modification of "fees" and others implied that it could vary by state. Of course, IANAL and there were no sources cited anywhere.
I left 10 minutes ago to find the link and got lost, I'm not sure where it went.
I cancelled a 4 year gym membership over this. They wouldn't allow credit card payments anymore, only bank drafts. Not giving a gym access to my checking account. Some MBA figured wrong when they ran the numbers on that change.
Class action lawsuit ... lawyers get paid ... customers maybe get a coupon for something useless in a year or two, or maybe nothing at all ... and the world keeps spinning.
Maximize shareholder value! Beat those quarterly estimates! Make your customer relationship more difficult! Can you hear me now?