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Evil fees to watch out for

Evil fees to be wary of. Image: Getty
Fees are a sneaky way to bump the price up of something up. How often have you seen "no hidden fees" just to be hit later with an extra charge. Ask drivers who hire a car, just to find a 1.3 percent credit card surcharge on the bill.

It's the devious fees that really bother me. You see something advertised at a good price, just to find that there's an "establishment", or "drop off" or "credit letter" fee. This is downright evil if you ask me. Con the consumer into becoming a customer, then hit them with underhand fees.

Here are eight evil fees to watch out for:

Car hire drop-off fees
Car hire prices can look cheap, but try to pick up a vehicle from a "premium" location such as the airport or tourist mecca such as Queenstown, you'll be charged an "airport fee" or a "Queenstown fee". Also watch out for "relocation fees" as well if you drop the car off in a different location from where you hired it.

Credit letters
A reader emailed me with a gripe about Meridian Energy. She failed to pay on time, and started receiving weekly "credit letters" at $5 a pop advising her that she hadn't paid — which she knew anyway. In this day and age, why can't the customer opt for free email reminders?

Estate agents fees
I've blogged this before. But I can't believe that Kiwis put up with being charged 4 percent fees by their real estate agents. Overseas 1.5 to 2.5 percent of the sale price of a house is the norm. It's not that our houses are worth less than those overseas or that the agents sell fewer houses.

Establishment and documentation fees
Here in New Zealand retailers aren't allowed to offer different prices for goods sold on hire purchase to those sold for cash (or credit card). Instead they charge establishment or documentation fees for HP deals. It's not unusual for these fees to be $50 or more, which means that your "interest-free deal" is actually costing you more than buying the goods there and then on your EFTPOS or credit card.

Honour and dishonour fees
The BNZ dropped its honour and dishonour fees in a blaze of publicity, but most other banks still have them. For goodness sake, give customers a choice. Ask customers when they open an account whether they want payments to automatically fail if there's no money in the account and be charged nothing, or if they'd like the bank to honour payments and charge interest for being overdrawn. As it stands, banks clip the ticket at both ends with these fees and bump the bill up with interest.

On-road fees
Have you ever noticed how car dealers advertise vehicles for a certain price, and then have "on road fees" in the small print. What a rip-off. The price should be the price. Car leasing also comes with fees. I noticed recently that Lexus New Zealand was advertising "No legal fees or drawdown charges" as if these fees and charges were the norm.

Managed fund fees
Managed funds are great investments. But sadly in New Zealand fund managers are able to hide fees charged on the funds or investments they buy, and only include the New Zealand fees in the MER (management expense ratio). These financial products can be so laden with fees that they grow no faster than a savings account. It's a real shame for investors.

Parking fines
There has been a lot of hoo-haa in New Zealand lately about parking fines and bus lane fines. I've mentioned these fines because I know readers hate them. Personally I view them as fees on your parking and driving behaviour, which can be avoided.

Your say: Have you been hit with unreasonable fees?

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User comments
The BNZ doesn't charge honour fees, but it still charges unauthorised overdraft fees. So you get hit with a charge anyway. The only improvement is that you will only be charged on unauthorised overdraft fee a month whereas you might have been charged more than one honour fee in a month.
How about super cheap airfares....then they add all the other costs....suddenly not so cheap. The advertised airfare should get you from one airport to the other.
My understanding is that BNZ no longer charges its previously outrageous $20 honour fees, but that it will still charge dishonour fees in most circumstances (where applicable). In other words, if, for example, you account is overdrawn without an overdraft facility, and you're too lazy to arrange to have your APs suspended, it's most likely the APs will not be honoured - they will not go through. This means they've been DIShonoured, and you WILL be charged for this ($35 I think). If an AP or a cheque was only overdrawing your account a small amount, and if you didn't have a bad credit history or warnings on your account, then the bank will most likely let it go through - honour it - and these days the BNZ will not charge you an honour fee for that (this is the one that used to be $20).

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