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Why Consumers Fight Some Fees, Forgive Others

Bank of America took similar heat when it proposed a $5 monthly debit card usage fee for purchases. The furor lasted far longer in that scenario and Bank of America didn't back away from its fee until November, which made Wells Fargo (WFC) follow suit and drop its pilot program for a $3 monthly fee. Yet for every bank fee that spurs consumer outcry and holds companies to public ridicule, there are countless others that take a similar bite without eliciting so much as a belabored sigh from customers.

The average rate that Bank of America and other financial institutions charge noncustomers to use their ATM machines has risen from $1.36 a decade ago to $2.40 today, according to BankRate. That includes a $3 fee from Bank of America that was not only not shouted down when it was introduced in 2007, but is slowly becoming the industry standard. The average combined fee for using an out-of-network ATM -- including your bank's fee and the ATM bank's fee -- is now above that bar at $3.81.

That's nothing compared with average overdraft fees, which have risen more than $6 in the past decade to $30.83. The Pew Health group estimated that consumers paid $38.5 billion in overdraft fees last year, even after the Federal Reserve made it easier for customers to opt out of overdraft protection.

"Unfortunately, there seems to be a disease among many companies in America that they'd rather try to hide the cost of doing business," Breyault says. "I think consumers want a simple price that they understand and, if it's more expensive to do business, just raise the price and see if the consumers continue to buy your product. "

The banks disagree, as do wireless carriers. Verizon was scared off of its convenience charge, but raised its monthly administrative fee from 83 cents per line to 99 cents without much pushback. Verizon's wireless competitor AT&T, meanwhile, earlier this month jacked its upgrade fee to $36 from $18 for customers buying new smartphones. That's after raising the prices of its minimum data plans for those phones from $15 and $25 a month to $20 and $30 a month.

Those incremental changes only register a response with consumers if they're noticed. They key point of the proposed Verizon convenience fee was to wean customers from one-time payments, which are more costly for the provider to process, and onto a more automatic payment system. Breyault says those automatic payments are the easiest way to sneak a fee increase past a consumer who may not be checking his or her bills as frequently. The old "out of sight, out of mind" cliche certainly applies when companies' fee structures start incentivizing behavior that saves them money.
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