Steadfast Finances

It’s a shame that our present economy has developed a deep seeded justification for screwing over consumers.

Not only are we going to do it, but we’re going to turn a profit doing it!

Today’s culture has become so cynical and anti-big business that we bicker about it at every opportunity, yet at the same time, fail to shed our learned helplessness behavior.

Like many, I see it at every turn.

My former phone company keeps making up new fees at will to counteract their shrinking landline business.  TD Ameritrade attempted to charge a good friend of mine $75 for transferring an account she’s held there for 6 years.  And a local hospital is harassing my grandmother for a measly $30 because Medicare did not “sufficiently reimburse them” for a simple X-ray.

Yes - you could say I’m annoyed!

A blog I frequent everyday, The Business Pundit, makes a rather ingenious statement that encompasses how I, and many other Americans are feeling these days.

America used to be the land of the free. Now, it’s the land of the fee.

That’s a very powerful statement to an idealist like myself, but there is little that we - the little people - can do about it.  However, the folks at The Consumerist have done far more than I would have thought possible by bringing individual consumer complaints to the forefront in mass.

These days, I spend most of my time as an independent trader, so I have much more time to navigate through this corporate minefield of what I call Screw You Economics. I realize most people don’t have this luxury, so I’ve made up a list of my most hated stealth fees that I’ve encountered this year and ways to avoid to them.

HOW TO AVOID MY MOST HATED STEALTH FEES

1. Overdraft fees. By far, these have to be one of the most annoying fees out there for consumers, but simultaneously, racks up huge profits for the banking industry.  Kevin at No Debt Plan details how he successfully negotiated with his personal bank and American Express to remove $100 in overdraft transactions fees.
2. Cell phone Early Termination Fees. If you’ve got a cell phone, you probably have an early termination fee (ETF) attached to it.  Ely at Crastinate found a few loopholes in Verizon’s contractual armor, and made a very popular video for a step-by-step negotiating platform to get out of your Verizon contract.  Perhaps it can steer you in the right direction if you wish to terminate your contract with your cell phone service provider.
3. Brokerage account transfer fees. I advise a few friends on their stock purchases from time to time, and several weeks ago, a friend of mine attempted to transfer her TD Ameritrade account to a different online broker with free trades each month.  Problem was, a $75 account transfer fee would have been attached just to make the transfer.  So, we decided to sell the remaining shares in that account, pulled out the cash, and moved to the new account.  Granted, we were required to liquidate her shares, but we had already made nice profit and were going to sell those shares around that time anyway.  This way, we killed two birds with one stone and TD Ameritrade didn’t get their ill advised account transfer fee.
4. Closing cost fees. I’ve been searching for investment properties at my alma mater recently, but one hiccup I want to avoid is overpaying at the settlement table.  Closing cost fees are ridiculously overpriced, and I’ll be the first to admit that I’m not the most knowledgeable when it comes to real estate law.  However, I do know how to spot a bogus charge when I see it.  Dr. Jack Guttentag has a treasure trove of knowledge posted at The Mortgage Professor that I will hope to absorb over the upcoming months.  From my reading thus far, he suggests one option to avoid closing cost surprises would be using a fixed price lender like Eloan so I know my good faith estimate and closing cost paperwork is written in stone.
5. Mutual fund expense ratios and load related fees. One of the reasons why I advise friends on their investments is to help them avoid ridiculous money management fees.  Mutual funds, and the newer exchange traded funds (ETFs), charge a fee to use their investing services and can charge 0.1% to 2% of your account balance.  Over time, this can have serious consequences as Moolanomy details in a post regarding expense ratios impacting potential profits.
6. Balance Billing - Unjustified Medical Fees. I mentioned my grandmother earlier in the post, but essentially what has happened is her Medicare coverage has sufficiently paid her radiology expenses in full, yet the accounting office wants more.  I recently came across “balance billing” advice from Mr. Tough Money Love and found it rather upsetting once he explained the issue.  I’m curious how many times she has fallen victim to this in the past.  It hasn’t proceeded to a collections case yet, but me being an idealist, I’ll likely push the issue because it’s the right thing to do.  Never mess with Grandma!
7. Food Inflation. I see food inflation related news every day on my trading screen, but it still shocks me for what I pay for a loaf of bread these days.  JD at Get Rich Slowly has the best home gardening experiment on the web in my opinion, where he details the amount of time and money he and his wife have invested in growing their own vegetables.  It certainly beats paying $4 for a lousy imported tomato.

Do you have other fees killing your budget?  I’d like to hear them.

Photo by bdnegin

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