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Hidden Fees

Henry David Thoreau once wrote, “Our life is frittered away by detail.” It does often seem that way where finances are concerned. For example, despite the consumer protections advanced by the Credit Card Act of 2009, you may still get hit with mystery merchant fees such as “Free-to-paid” and “Zombie” charges.

 

“Free-to-paid” refers to trying out a product or service for free, but then not actively cancelling it after the free period has ended. This is similar to getting free movie channels when you initially buy cable TV service, only to receive substantially increased cable bills when the free period ends.

 

Or worse yet, “Zombie” charges refer to something you signed up to receive and then thought you had cancelled, but the charge continues to show up on your bill. According to a recent study released last month from software company BillGuard and research firm Aite Group, Zombie charges occur 11.9 million times each year for total revenues of more than $826 million.

 

Despite the call for greater fee transparency, another recent study found that the average bank checking account has 30 fees, and many U.S. banks still don’t provide a list of these charges until after a customer applies to open an account.

[CLICK HERE to read the article, “5 Common Hidden Credit Card Charges,” at FoxBusiness.com, Aug. 7, 2013.]

[CLICK HERE to read the article, “The Hidden Fees Eating Up Your Bank Balance,” at Marketwatch.com, Aug. 8, 2013.]

A cursory look at any of your utility bills may also reveal a list of administrative charges beyond your actual consumption, and it can be difficult to discern what these charges are for. Most of us just pay the bill and don’t look back. However in July, a handful of Washington legislators sent letters to Verizon, AT&T, Sprint, T-Mobile and CenturyLink requesting justification for these types of extra fees tacked onto consumer bills. We all know that those aggressive cell phone rates touted in TV ads do not represent what we actually pay on a monthly basis. It’s just another way our checking account balances get frittered away. 

[CLICK HERE to read the article, “Democrats investigate hidden fees on internet, cell phone bills,” at TheHill.com, July 18, 2013.]

Another area in which Washington has mandated more transparency is in 401(k) fee disclosure statements. The fact is though, that many people won’t read this disclosure no matter how easy it is to understand. After all, your employer is the one who picks the fund choices, so you may not get a whole lot of say in how much is charged in fees. The reality is that your 401(k) plan may offer other similar choices that do not charge as much. It’s worth taking a look. 

[CLICK HERE to read the article, “How to find ‘hidden’ 401(k) fees,” at CBSnews.com, July 30, 2013.]

[CLICK HERE to watch the video, “How to avoid hidden 401(k) fees,” at CBSnews.com, July 26, 2013.]

These articles are being provided to for informational purposes only. While we believe this information to be correct. We do not guarantee the accuracy or completeness of the information included.

If you could use some help evaluating what you’re paying for the administration and management of your assets compared to what you receive in return, please give us a call. We’re happy to help in any way we can.

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For guidance on your securities holdings, please consult with a broker dealer or Registered Investment Advisor.

The information and opinions contained herein are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by our firm. Content is provided for informational purposes only and is not a solicitation to buy or sell the products mentioned. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.   

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