Shady hidden fee tactics to watch out for

Cell phone contracts and gym memberships seem to be two of the most reliable ways to get hosed. They’re full of hidden fees and penalties, and they rely on your belief that you can’t live without their service to get you to sign on the dotted line.  Things to watch out for include:

• Deals that change from day to day or from location to location. This makes it hard to shop for the best deal. You can also use it to your negotiating advantage, if you’re determined to hang in there. But a lot of times they don’t want to give quotes over the phone, which means you’d have to drive from one location to another to get each quote with which to negotiate. Consider a company who gives you flat-out simple consistent pricing. For gyms, try a local gym (non-chain) or JCC. They’re may not be the cheapest, but they tend to be straightforward. (I’ve had a bad experience with a YMCA telling me my sign-up fee was refundable whenever I left only to find out it was only if I left in the first month, so I cannot recommend them. If you do try a Y, be sure to speak to a supervisor and get names and make sure everything’s in writing – it would appear they don’t train their volunteers too well.)
• Taxes and surcharges on cell phones! I’ve never had a cell phone rep be honest with me about the extra few dollars a month I will pay if their deal doesn’t cover state and federal taxes. So a $49.95/month plan is usually really closer to $65/month – or more. I’ve even challenged them on this and had them swear there are no taxes or surcharges when there most certainly are. Assume your plan will be at least $10-20/more than the stated price each month. You could also buy minutes as you go instead of having a contract. Unless you talk enough to justify a monthly plan, pay-as-you-go will save you money.
• Enrollment fees, sign-up fees, administration fees, activation fees. While there’s nothing wrong with charging extra for signing up a new customer, you shouldn’t have more than one fee for it. All your sign-up costs should be covered under one easy fee which they can clearly explain. If you have two or more sign-up related fees, especially if they can’t quite explain the difference between the two, that strikes me as suspicious.
• Cell phones have an ever-evolving range of weird fees to throw at you: per-usage fees on 411, transfer fees, fees that happen when your contract expires and without notifying you they bump you up to some ridiculous charge per minute, and yes, spam text messages do count against your monthly allowance (if you have one) or cost about 20 cents each if you don’t have texting on your plan. If you don’t use texting, get your provider to block it.
• Cancellation fees. Make sure of two things before signing a contract: that your cancellation fee is perfectly clear and that it’s within the laws of where you live. Many US states have imposed limits on how much a cell phone provider can charge as a cancellation fee because years ago, cell phone providers charged ridiculous amounts for canceling a contract. Why ensure customers are happy and well-covered, when you can make even more money if they cancel in frustration?

Gyms and cell phones are just two examples of industries where you see a lot of hidden fees. Landlines can be just as bad, as can credit cards and banks, health insurance and… well, every industry’s got a few. The more you learn about what to look out for, the better you’ll be at getting what you want at a price that’s what you meant to pay.