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How To Avoid Paying Additional Fees And Charges

A couple are shown processing hidden charges for a payment they made

We often complain about hidden fees or charges, but very rarely do we do anything about it. We examine your options with a consideration of:

  • The findings of research into UK hidden fees
  • Which goods or services often carry hidden charges
  • How to avoid paying these hidden extras
  • Complaining to the service provider or to their regulatory body

Recent research has shown that the British pay over £400 a year for hidden charges and unexpected fees. In this article we look at the findings of this research in depth to see which types of goods and services often carry hidden fees. We then give handy tips to avoid being caught unaware and end up paying more than you had budgeted for.

The findings of research into UK hidden fees

Research by BOXT (an online retail company) found that 4 in 10 Britons have cancelled a payment or booking after finding out about a hidden fee later on in the payment process. Although 8 out 10 people in the survey said that they felt frustrated by this issue, only 1 in 3 had made a formal complaint (although 1 in 20 had complained about the product later on social media).

4 in10 Britons have cancelled payments or bookings after unexpected fees

37% had thought about complaining but hadn’t, and when asked why, 23% said it was because they were ‘too busy’. 1 in 20 consumers in the poll had been charged up to £81-£100 more than they’d expected for a single transaction.

Which goods and services often carry hidden fees or charges?

The research would tend to suggest that hidden fees and charges are imposed on many common goods and services. The original research had 25 different examples but for easier reading, we have grouped them into categories.

Hidden fees Amount
Insurance fees £37.81
Late fees £9.96
Credit/Debit card fees £15.49
Transaction fees (online) £11.23
Transaction fees (abroad) £10.43
Extra charges associated with flights £60.16
Booking fees £14.18
Extra charges to hotels £40.66
Compulsory service charges £16.17
Car hire extras £13.48
Event/Gig fees £22.32
Customer service calls £11.67
Exceeding data fees £10.63
TV subscription £27.42
Broadband £35.81
Delivery fees £28.28
Contractor/repairmen fees £36.42

How to avoid paying these hidden extras

There are a number of ways that you can avoid wasting this money on fees which you hadn’t planned for.

A woman is shown purchasing something online

Managing your bank account and credit cards

When you have a regular payment to make towards a credit agreement, you should set up a direct debit with your bank. In this way, money will be transferred out of your account automatically without your having to keep track of when payments are due.

When using your debit or credit card especially abroad, check on the fees for withdrawals or purchases in foreign currencies. A non-sterling transaction fee for credit cards can be as high as 3%.

Since January 2018 an EU Directive means that companies can no longer impose a surcharge for payments made by credit or debit card.

Since January 2018 an EU Directive means that companies can no longer impose a surcharge for payments made by credit or debit card. If you find this charge (for example, to a ticket agency or venue), you should report them to Trading Standards.

Shopping or ordering online or by phone

The worry is that companies will attempt to recoup the money lost on credit/debit card transactions by charging extra for booking and/or postage fees. Unfortunately, these fees have no legal limit or cap although the Unfair Trading Regulations of 2008 make it clear that they should be clearly disclosed when a price is advertised. You could challenge the company for this reason. Alternatively, when ordering or booking something online, you should always go to the final payment page and see the total cost before authorising the payment.

Read the small print

When taking out any policy, agreement or contract, always read through it carefully before signing on the dotted line as some of the charges are hidden in the small print. If you have any queries, you should ask the company representative for clarification.

A man is reading a contract to ensure there are no hidden charges within the fine print

Some broadband connections claim to be unlimited but in fact specify a ‘fair usage’ so this can be interpreted as the phone provider sees fit. Keep track of your monthly download limit and be aware of which apps ‘devour’ the most data.

This is equally true of the extra charges for exceeding your allowance on your mobile phone, which are all listed in your phone contract. Using settings to track your phone usage; asking your phone provider to block use when you exceed the limit or buying a ‘booster’ package are all ways to prevent extra out-of-allowance charges on your mobile phone bill. Phone providers can also block inadvertent use of expensive customer service premium numbers.

Complain to the company or service provider

If you feel that you have been treated unfairly and been overcharged for goods or services, you should first complain to the company or service provider. If they don’t reply in 8 weeks or their answer is unsatisfactory, you could take the matter further. You should complain to the regulatory body responsible for the sector. For instance, for consumer credit agreements, this would be the FCA while Ofcom are responsible for overseeing the telecommunications industry.

Conclusion – the importance of transparent pricing

Nothing will change unless companies realise that simple, honest and transparent pricing is their obligation. Not only is it fairer but doing otherwise could ultimately damage their business. These companies might be interested to learn that ¾ of people in the survey were less likely to buy from the same company or service provider again after paying hidden fees. Because this will convince them if appealing to their better nature doesn’t.

About the author

Faith Hastings

Faith is a proud mother of three and runs a busy home. She has a lot of experience in housefold finance and loves to write articles for familymoney.co.uk

Faith enjoys shopping, travelling and spending time with her family.

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