How to Stand Up to the Nickel-and-Dimers

In a world of fees gone wild, what's a consumer to do? In some industries, such as banking, complaining customers can sometimes get fees rolled back. In others, such as telecom, it may be best to seek out competitors without fees. When a charge seems especially underhanded, an individual may want to join a consumer-action group.

In retail banking, consumers can get around certain fees if they're willing to give up some services. The first step is to get educated: Ask about the pricing and fee structure before signing up for a service. It may be possible, for example, to avoid checking-account fees, which can be as high as $20 a month, by signing up for direct deposit or forgoing the return of canceled checks.

But don't stop there. Given industry competition, banks are often willing to reduce other fees when faced with a determined customer. Call to question unreasonable or inflated charges. "In a marketplace where prices are increasingly negotiable, complaining consumers have a fair chance of persuading sellers to reduce or eliminate individual fees," says Stephen Brobeck, executive director of the Consumer Federation of America.

Credit-card companies often will waive late fees for longtime cardholders in good standing when requested. You also have some clout when it comes to annual credit-card fees: Call the company and ask about the costs of other cards it offers. You may get a better deal by switching.

An effective option, of course, is to change companies when dissatisfied with fees. "The most successful consumers are the ones willing to walk away," says Matthew Smith, founder of, an online database of consumer gripes. Major long-distance phone carriers AT&T, Sprint (FON ), and MCI introduced new fees this summer and may be faced with a customer exodus once people discover that low-priced long-distance carriers such as TCI and ZoneLD are just as good -- and they "don't have the same fees," says Bill Hardekopf, CEO of, a consumer Web site. is one of the many vigilantes that have popped up all over the Web to police extra charges. This site helps consumers shop for cheap long-distance service by comparing carrier plans, providing a rate calculator, and offering consumer tips. asks consumers to watch their phone bill and report any fee increases to the site. If the phone companies have violated any regulations, the site will alert the appropriate agencies. Consumers can also earn up to $20 if they are the first to report a rate or fee increase not already listed on the site.

Two more general Web sites, and, give consumers a place to report and vent their frustrations with companies that charge excessive fees.

Finally, outraged individuals can look for help from consumer groups such as Consumers Union or the U.S. Public Interest Research Group. These knowledgeable, politically savvy organizations know how to effect change. Consumers Union, for example, took on Barnes & Noble (BKS ) Inc. and Blockbuster Inc. for the monthly service fees they charged on unused balances on electronic gift cards and certificates. "It's your money; you [or someone] paid in advance, so you shouldn't have to pay a fee," argues Gail K. Hillebrand, an attorney at Consumers Union in San Francisco. The group helped get a law passed in California in July that bans nearly all fees on gift cards and certificates.

Such action may well become more common as frustration with fees grows. If it does, corporations might back off from nickel-and-diming those they are supposed to serve.

By Toddi Gutner in New York

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