Which? names rip-off fees that should be bannedNine unfair charges exposed
19 June 2016
Which? members have reported a plethora of unexpected or unjustified charges to us as part of our 'Sneaky Fees' campaign.
Despite improved transparency, there are still many instances of 'extras' that we think should be free or included in the headline price.
Of these unfair charges, four stand out as being so unjustified we feel they should be banned.
Alex Neill, Which? director of policy and campaigns, said: 'Consumers should know how much they are paying for a product upfront, without being hit with sneaky extra fees. It can be frustrating to think that you’ve paid for something in full, only to be charged extra for doing it yourself, such as printing off your own ticket.
'Necessary fees should be rolled into the headline cost, so people know exactly what they’re buying and can compare products.'
Find out more: Sneaky Fees campaign - sign our petition to stop sneaky fees and charges
Fees that should be banned
1. Delivery fees for tickets you print yourself
Agents selling tickets for music events or the theatre typically charge a delivery fee to send it to you by post. Some charge a delivery fee even when you print off the ticket at home, while others do so when you collect it in person from the box office. In some cases, agents charge a fee of up to £2.50 to print your ticket at home.
We say: Paying the cost of postage is understandable, but printing your own ticket should be free.
2. BT's 'cessation charge'
You may expect to pay a fee if you end your broadband contract early, but not after it's finished. Yet, if you leave BT to switch to a company that has its own network (essentially Virgin Media), or you just decide to opt out of a BT broadband connection, you’ll face a ‘cessation’ charge of £31. BT says this covers the cost of recovering equipment and amending its records.
We say: This fee is actually a disincentive to switch providers. You shouldn’t have to pay it if you’ve finished your contract.
3. Mortgage exit fees
You pay to set up a mortgage, so, why should you be charged again for paying it off?
Nevertheless, some lenders charge customers an exit fee - Clydesdale Bank charges £195, while it’s £149 with First Direct and £90 with Tesco Bank.
Several high-profile banks have scrapped this fee, including Halifax, HSBC, Lloyds, NatWest, RBS and TSB.
We say: If some lenders don’t charge, then why do others? It's time they all stopped.
4. Letting agents' admin fees for tenants
Letting agents charge several ‘admin fees’ to cover costs, such as drawing up a tenancy agreement, inventories and checking references. This can be as much as £500 (or £300 outside London) per property.
Given that landlords generally pay admin fees too, and that a comprehensive tenant check by a credit reference agency such as Experian costs only £30, it’s hard not to assume that some firms are simply profiteering.
We say: These fees transfer costs to tenants. Landlords already pay letting agents and can recoup this expense in the rent they charge.
Rip-off charges to avoid
Some add-on charges are avoidable, but only if you know what to watch out for and are prepared to shop around.
1. Replacement insurance policy charges
Insurance companies are notorious for charging high fees for changing policy details or providing duplicate documents. A copy of your car policy will cost you £30 from Axa or Swiftcover, while Endsleigh charges £20 for a duplicate home cover document.
Not all insurers charge for duplicate policy documents though. Which? Recommended Provider (WRP) home insurers NFU Mutual and John Lewis provide them for free, as does WRP car insurer LV.
Some firms that do charge a fee let you print out your policy at home for free.
We say: Basic admin costs like this are minimal. We applaud companies that don't charge.
2. Excess waiver insurance
When you hire a car abroad you may be pressured into paying for excess waiver insurance (‘super collision damage waiver’), which cuts the amount you’re liable for if you damage the car.
This cover can cost £100-£150 a week if you buy it from a car hire firm. It’s better to take out a standalone excess insurance policy. You can get one for a short period, or a year. The cost is around £40 a year for Europe and £50 worldwide.
We say: Plan ahead and take out your own policy, for a fraction of the cost.
3. Airline seat advance reservation fees
The advance seat reservation fee is one of several charges introduced by budget airlines. Many now charge it, trading on the fact that most people want to be sure they’ll sit together. Even for short-haul flights, the fee can exceed £10 per seat. You can avoid the charge if you’re willing to take a gamble on booking seats as soon as the online check-in opens.
We say: This is an optional charge, but appears way out of proportion to the cost, and hits families particularly hard.
4. Cruise ship tips on top of service charges
Cruise ship passengers are used to tipping, but they resent having to tip twice for the same service.
Cunard, Princess Cruises and Royal Caribbean all invite you to add a tip to your bill when you have had a drink, for example, but also add a service charge to your bill at the end of the cruise.
Saga and Thomson both include standard service charges in the initial booking cost, leaving any other tips entirely at your discretion.
We say: If a service charge is for service, then what are the tips for? These charges need to be more transparent.
5. High cancellation charges
When you have to cancel a holiday booking, you can end up paying a large proportion of the full cost. Cruise ships are among the most stringent – Saga and Fred Olsen keep 60% if you cancel 11 weeks before departure, even if they resell your cabin. Cunard and P&O keep 50%.
With some ‘strict’ Airbnb deals, you have to pay the booking fee, plus 50% of the full cost if you cancel six months ahead. A more ‘flexible’ Airbnb deal takes 6-12%.
We say: Paying if you cancel at short notice is reasonable, but if you give notice, high charges seem unfair. If you cancel due to unforeseen circumstances, your travel insurance should cover it, but check the small print.