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Home / Business / Personal Finance

Diana Clement: The fees that make us foam at the mouth

Diana Clement
By Diana Clement
Your Money and careers writer for the NZ Herald·Herald on Sunday·
8 Apr, 2017 05:00 PM4 mins to read

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Since Trade Me's fees increased from 5.5 per cent to 7.9 per cent it has seen a growth in returns. Photo / Nigel Marple

Since Trade Me's fees increased from 5.5 per cent to 7.9 per cent it has seen a growth in returns. Photo / Nigel Marple

Diana Clement
Opinion by Diana Clement
Diana Clement is a freelance journalist who has written a column for the Herald since 2004. Before that, she was personal finance editor for the Sunday Business (now The Business) newspaper in London.
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There's nothing like fees to make Kiwis foam at the mouth.

I posted my pet hates on social media this week and asked what really riled others.
Drip pricing on concert and other tickets was the runaway leader.

At the moment companies can and do get away with listing artificially low prices for goods and services then lumping in compulsory fees before checkout.

One of the most hated examples is the print at home surcharge lumped on top of many tickets.

The customer does the work, supplies the machinery, the paper and the ink, yet the ticket vendor charges a big, fat fee.

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Consumer wants our Fair Trading Act to be amended to ban drip pricing.

New provisions were added to the Act in 2014 so that additional costs including legal fees, administration charges, on-road costs, postage and packaging, delivery and essential parts have to be clearly specified.

However, this isn't the same as the overall price up front.

I get annoyed at being charged credit card processing fees when there is no fee-free option to pay.

When I booked my last two airfares online through Air New Zealand and House of Travel's websites, I was given the option to have the money taken directly from my bank account with no fees.

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This certainly isn't possible on most online booking sites and it's not something the banks like.

That's probably in part because consumers are charged credit card fees of 2.5 per cent or more when they buy tickets. The ticketing agencies should only pass on what they're actually charged by the bank.

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As a nation we target our ire at the multinational ticketing agencies such as Ticketmaster and Ticketek, but it turns out the venues and promoters decide how the pricing is done.

I'm told up to a third of venues and promoters offer all-inclusive ticketing.

When I asked Auckland Live, one of New Zealand's largest venue operators, why they didn't charge all-in fees, they said customers prefer the choice of whether to purchase online, via a box office or a call centre.

Businesses do need to make money, of course. But I think they could be more up front about it.

One thing I didn't give much thought to is Trade Me's fees.

That was until I was stopped in the street by someone who'd seen my social media posting and told me I should include the popular auction website.

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Trade Me's basic sale fee is 7.9 per cent, which is not insignificant and combined with listing fees added up to nearly $40 on a bicycle I sold recently.

Fortunately for consumers, Trade Me has huge competitors looming from the likes of fee-free Buy/Sell groups on Facebook.

I looked at eBay (another near monopoly in many countries it operates in) and the basic fee is 10 per cent, although each site has all sorts of optional add-on fees that make apples for apples comparisons difficult.

Nonetheless Trade Me's chairman, David Kirk, was delighted with the most recent growth in company returns - which came nearly a year after the basic fee was raised from 5.5 to 7.9 per cent.

Fortunately for consumers, Trade Me has huge competitors looming from the likes of fee-free Buy/Sell groups on Facebook.

There are downsides for consumers - such as no feedback scores for buyers to rely upon.

A viable competitor such as Facebook, however, could well bring those Trade Me fees down.

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No one complained to me about unarranged overdraft fees and/or failed payment fees by banks.

These fees are for accidentally attempting to spend on a zero balance or if there isn't enough money in an account to cover an automatic payment or direct debit.

The banks say they allow the payments through to avoid embarrassing us in public.

If that was the case, customers should be given a choice to decline. I don't want to spend if there is no money in my account. Charging $10, $15, or $20 for an electronic transaction that doesn't see a human eye is a rort in my book.

Real estate fees are something I've written about before.

Fees typically range from 2.5 per cent to 4 per cent in New Zealand, compared with 1.3 per cent in the UK.

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Agents here tell you they offer a better service.

Pull the other one.

Finally, some of the other complaints I received included: initial fees and exit fees on funds because they already charge an annual management fee; dog registration fees (but none for cats); credit card fees for parking; telephone providers' callout fees; withdrawal fees from university and over-the-counter fees for depositing cash at the bank.

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