Traditionally, buying a home has been "free," at least with regard to real estate agents. Sellers pay steep commissions -- usually around 6 percent – which are split with the shoppers' agent. That allows home buyers to focus their energy on hunting for hidden fees from their mortgage provider.

But a disturbing trend that has emerged recently threatens this tidy arrangement. Some buyers' agents are now slipping junk fees into their contracts. Usually labeled "administrative fees," they range from $195 to $500. While their legality is in dispute, they have become commonplace. Virginia real estate broker Frank Llosa, who exposes real estate agent tricks on his blog "FranklyRealty," says perhaps 40 percent of buyer contracts now have administrative fees tucked inside.

"I don't think it's right," Llosa says. "I don't believe in administrative fees and I don't think any buyer should pay them."

These new junk fees are even more disturbing when they are not properly disclosed. Many buyers work with agents on a fairly informal basis and only sign an agency agreement when making an offer on a house. Then, they sign dozens of forms, making an agency contract with an administrative fee easy to miss – particularly since most have the expectation that the agent is working for free for them.

Sometimes the fees aren't disclosed until closing day. They don't appear on the Good Faith Estimates provided by banks when pricing mortgages, for example. Instead, buyers' agent fees first appear on the complex HUD-1 settlement form given to both parties at the closing table. At that point, it's difficult for a buyer to stop the proceedings and argue about the fee. That's why it's always best to ask for a preliminary HUD-1 draft estimate, which is often available 48 to 72 hours before closing.

The fees began appearing about five years ago, Llosa said. But now, say other experts, they seem to be in vogue as brokers struggle to stay afloat during the housing market bust. He said a few real estate brokerage firms are trying to attract talented agents by promising that deals will include administrative fees that they can keep.

When compared to the purchase of a $250,000 home, which could generate a $15,000 commission, a $250 junk administrative fee might seem trivial. But by the time agents split commissions with each other and their brokerage agency, commission checks could be whittled down to $3,000 to $4,000, so $250 is a sizable tack-on.

That doesn't mean you should pay it. Many buyers have simply refused to pay it, crossing it off the agency agreement, said New York-based real estate attorney Jeff Arouh.

"A sophisticated buyer may say, 'I'm not going to pay that fee,'" he said. But if the issue is unresolved until closing day, that's another matter, he said. "You might get angry, but are you going to lose a deal because of $250"

Against the law?
There is another critical question to be answered about administrative fees: Are they legal? A buyer named Vicki Busby, of Alabama, is suing her real estate agency over a $149 administrative fee she was forced to pay, and seeking class action status for the case. Believe it or not, there are laws against unfair fees.

The Real Estate Settlement Practices Act of 1974, which governs home purchases, includes provisions designed to prevent junk fees. Silly as it may sound, the law dictates that fees can only be collected for services actually provided. That means junk fees levied simply for the heck of it are not allowed.

When challenged, some real estate agents argue that administrative fees are office-related charges -- document preparation, and the like – that traditionally have been covered by the sizable commission checks. But Arouh said agents may be able to stay on the right side of the law if they simply itemize their services in a way that links the administrative fee to a particular service, such as assistance in mortgage application preparation.

He also said that's splitting hairs.

"The services of a real estate broker are those of a professional, and they agree to be compensated for providing a bundle of services and that bundle is reflected in commissions," he said. "I think administrative fees are inappropriate, but that's my opinion. I come from the school of thought that if you are a professional you deal with (consumers) as a professional and you don't nickel and dime them."

That school, apparently, is suffering from severely reduced enrollment at the moment.

RED TAPE WRESTLING TIPS
• It's nice to go shopping with an agent without having a signed agreement, as that keeps you a free agent. But when the time comes to make an offer on a property, don't just gloss over the agency agreement because your agent now seems like a friend. Look specifically for the words "administrative fee." If you find them, refuse to pay it. No agent will lose a deal over the administrative fee.
• If you feel the agent was deceptive in communicating the fee to you -- you have the sense that her or she tried to sneak it by you while signing other papers, for example -- give that some thought. If your agent operates with that m/o, what else might he or she hide from you? Consider changing agents.
• Get a preliminary HUD-1 form as early as possible, and look for the words "administrative fee." If you see it before you get to the closing table, you'll have a much easier time fighting it.
• Remember, no matter whose relative the agent is, he or she has a strong incentive to persuade you to buy something -- anything. Agents make money by closing deals, period. So maintain an arm's-length relationship.

While most people see high gas prices as serious problem, marketing gurus see them as an opportunity. It's almost impossible to turn on the TV, get gas or go shopping now without hearing about some great new way to cut down your gas bill. Many of these offers may sound tempting, but beware the fine print booby traps.

Topping the list of gas discount offers is Chrysler's $2.99-per-gallon promotion. But credit card companies, rental car firms and even local tourism boards all are making similar pitches. All of them should be taken with a grain of salt, or maybe taken with one of those little pills you drop in your gas tank to improve your gas mileage (kidding!).

Chrysler's deal is perhaps the most tempting. The car seller promises the security of $2.99-per-gallon gasoline for the next three years. In a world where pump prices have gone mad, heading now towards $5 in some place, $2.99 gas seems like a great deal.

But hold onto your gas hoses. Chrysler's offer has many nuances, but it boils down to this: Most new car buyers are familiar with the choice they often get between a cash rebate or low-rate financing ($3,000 cash back or a 0 percent loan, for example). Well, the discounted gas is simply a third choice. In other words, those who take the gas offer surrender all or part of their rebate and access to the cheap loan.

I like to keep things simple, so the standard advice applies here: for the majority of car buyers, your best bet is to take the rebate. Cold, hard cash is simple.

The truth is, even with $5 a gallon street prices, given the limitation of 12,000 miles worth of gas per year, Chrysler's $2.99 offer is pretty close to a wash when you surrender the rebate. Obviously, the specifics can vary wildly, but for argument's sake, here's a scenario -- at 20 mpg, Chrysler would discount 600 gallons of gas per year, saving a buyer $600 if the street price is $3.99, and $1,800 over three years. Is that worth surrendering a $1,500 rebate, which could add $1,500 and the associated finance charges to your car loan? Probably not. In some cases, Chrysler will let buyers who take the gas offer keep part of the rebate, which complicates the math further, but you get the idea.

Of course, you can imagine a scenario where Chrysler's deal leaves you ahead -- say, if pump prices explode towards $10 a gallon. There are other ways that the $2.99 gas card might pencil out for you -- say if you plan to buy a gas-guzzling diesel truck, for example. The folks at Consumer Reports have performed painstaking math on your behalf. You can see their efforts here and decide for yourself if you want to play gas price roulette with Chrysler.

But even if gas prices rise to $7 or $8 a gallon, and you save a bundle on gas for three years, you still might end up losing in the end, says Jeff Bartlett, auto expert at Consumer Reports.

"After three years, where are you going to end up? With two disappointing scenarios. Either you go back to paying full price for gas, or you say, 'I bought a gas guzzler, how am I going to sell that?' " The resale value of low-mpg cars is sure to plummet as gas prices rise, he said, so it's important for the consumer consider the total cost of ownership -- including resale value -- when considering any sales incentive.

Credit card gas discounts

If you think the Chrysler discounted gas deal is confusing, check out credit cards that discount gasoline prices. Without looking too hard, you can find offers that sound too generous to be true -- 10 percent off a gallon of gas, for example. Again, the higher the price goes, the better these deal sound. I don't mean to burst your bubble, but here goes.

First off, these cards do not lower the price of gas, despite the clever marketing campaigns. They provide rebates. And those rebates are slow in coming. Many cards only provide them once each year, in the form of a credit on the credit card bill. The credit might seem like a generous amount, but if you sign up for one of these cards at a nearby gas station seeking relief from high pump prices, you will wait a long time for that relief.

But that's only the beginning of the booby traps to be found on gas discount cards. Most cards offer a teaser discount rate, which then drops down to a much lower rate after a couple of months. For example: The Citi Dividend Platinum Select Card offers 5 percent off gas for 6 months, and then 2 percent off after that. Some card's teaser rates vanish in as little as two months.

Then there's this: Some cards limit the rebates you can earn each month or each year. With the Citi card, for example, the annual limit is $300. There's also a minimum purchase required -- drivers who don't earn at least $50 in credits get no rebate at all.

Despite all those restrictions (and we've omitted plenty of others), Bill Hardekopf of LowCards.com says consumers can get a worthwhile deal with gas rebate cards if they carefully dissect the terms and conditions before signing up.

"You can make some pretty good money on a rebate card but you have to really know what you are doing," he said. For example, the BP Visa Rewards Card offers sizable rebates of 5 percent -- but only for gas purchased at BP, of course. The card might make sense if you frequent a BP station around the corner, but it certainly wouldn't make sense for consumers to go out of their way to buy BP gas.

"We recommend making yourself a grid. Include the introductory offer, the ongoing offer, if there's a cap, and so on, to make it easy to compare," he said.

Here are two places to compare gas discount credit cards: LowCards.com and CardRatings.com.

Of course, the most important thing to remember with all rebate cards is this: if you don't pay your balance in full each month, you lose. Few consumers plan to carry a balance, but about half ultimately do, so it's important to be realistic about your ability to avoid finance charges if you sign up for a gas card. If you carry a balance on any other card, you probably don't need any more plastic in your wallet. And remember that applying for multiple credit cards within a few months will likely hurt your credit score, a penalty that could be far more costly than an annual $300 rebate for gasoline purchases.

Other gas deals

The tourism industry is filled with trepidation about the summer travel season, with many families scaling back driving plans. As a result there are genuine incentives that are worth checking out. You can find rental car offers than include a free tank of gas, for example, which could be worth $50-$100. But watch out. Don't let the rental car firm talk you into a gas guzzler (rental car lots are full of underused SUVs right now), which could eat away at your discount. And make sure to price rental cars using other traditional discounts, such as an AAA card. You might get a better deal by forgoing the free gas and taking a better price.

Meanwhile, car renters are also offering discounted gas if you prepay at the time of renting. That deal is only worthwhile if you are clever about returning the rental car with a nearly-empty tank.

Local tourism boards also are nervous and are trying to attract travelers who might be making other plans. Some car-oriented destinations are offering gift cards to tourists who book their trips. Here's a series of offers from the New Hampshire tourism board, for instance.

Some hotels and travel sites like Expedia are also offering gas gift cards as an incentive for booking travel. These deals are pretty straightforward.

Finally, even grocery stores are getting into the act, offering discounted gas to loyalty card holders. Kroger's Co. offers 10 cents off per gallon after shoppers spend $100 at the store. Nothing against FDR, but one thin dime is hardly worth changing your gas buying habits for.

Penny wise and pump foolish

That brings me to my final point. Consumers tend to be very price sensitive, and marketers are keenly aware of this. But while trying to chase down lower gas prices, many drivers are penny-wise and pump foolish.

A survey conducted in 2007 by petroleum retailers found that one in four car owners said they'd drive 10 minutes out of their way to save 3 cents per gallon. That makes no sense. Taking that extra trip saves a driver 36 cents on an average 12-gallon fill up, but it costs about $3. Assuming the driver averages 45 mph, getting to that magical discount gas station will end up requiring a 15-mile detour, round trip. Assuming the car gets 20 miles to a gallon, and the price of gas is $4, the extra trip costs $3, or nearly 10 times the amount saved!

And so it is with gas discounts. Despite the high price of gas, consumers who try to chase a few extra pennies should be aware they might end up being led by the nose into a money-losing deal.

Here's a comprehensive list of other gas-saving deals.

Have you found any gasoline discount deals that really work for you? Share them here.

I hope you're sitting down while you read this. One of America's largest rental car companies is about to eliminate one of the vacation industry's most notorious hidden fees. And I'm about to lavish it with praise.

Hertz last week announced it would stop charging car renters an arm and a leg for gasoline when they return rental cars with half-full tanks. You know the drill: When you rent the car, you're given a Russian-Roulette kind of choice: 1) paying up front for gas, thereby paying for more than you will use; 2) agreeing to fill the tank yourself and running the risk that you will be too late to do it; or 3) paying for the rental firm to refill the car after you drop it off. Those after-rent gas prices have been ludicrously high for years, generally about double the street price for a gallon of gas. Currently, Hertz refuel prices are about $8 per gallon in many locations, making travelers liable for surprise fill-up charges of $100 or more.

But beginning July 1, that will change at Hertz. Renters will instead pay fair market value for gas plus a $6.99 fee for the refueling service. That will end one of biggest hassles that travelers face -- the desperate search for a gas station near the airport while trying to leave enough time to check in and clear airport security checkpoints.

Hurray for Hertz, which as the world's largest consumer rental firm has the power to steer the industry in the right direction. Consumers should consider renting from the firm, even if its rates are slightly higher, because they won't be on the hook for the refueling "gotcha" any longer. That's a valuable feature. It will be interesting to see if the company actually benefits from doing the right thing. I hope so.

The move is not entirely born of largesse. Earlier this month, the Maryland state attorney general forced all rental car firms in the state to substantially lower their refueling penalties. In Maryland, rental firms must now limit their refueling price to about 140 percent of the prevailing market price. The agreement lowered the per-gallon gas charge at most firms from $8 down to a little less than $6.

"As a result of these agreements, Maryland will have among the lowest, if not the lowest, rental vehicle refueling charges in the nation," Attorney General Douglas F. Gansler said while making the announcement. It's good to see that state enforcement agencies can recognize eggregious practices and force change. It's too bad Maryland or some other state didn't take the same tack a few decades ago, but better late than never.

Skyrocketing fuel prices helped draw attention to rental car companies' crazed pricing practices. When gas was $1.40, $2.80 refueling prices didn't seem quite so bad, but $8-per-gallon prices are indefensible.

"Car rental companies realize that motorists have had it with gas prices, and they are running out of patience," said Catherine Rossi, spokeswoman for the American Automobile Association's Mid-Atlantic office. "We are pleased that the Maryland attorney general's office addressed this with the car rental companies and we hope other attorneys general will follow suit."

Hertz deal even better
But Hertz has gone farther than Maryland required, offering a better price and extending the deal to the rest of the country. The firm claims its new pricing plan has nothing to do with the threat of legal action in Maryland. Even if that's a fib, I don't care. Hertz has seen the light. Now let's see if other rental car firms are forced to play nice. So far, Hertz's top competitors haven't extended their new, low refueling prices outside of Maryland.

"We're taking a close look at it, but do not have a decision to announce at this time," said John Barrows, vice president of communications at Avis Budget Group.

Here's a case where the light hand of government intervention could really help a market function properly. Let's say Avis, Budget, and other competitors stick to their guns and continue with crazy refueling prices. Hertz will obviously lose money on this deal, and be put at a competitive disadvantage. It will likely raise prices slightly to cover the revenue lost through the new policy. That means consumers who search for rental cars at travel sites like Expedia or Orbitz might be tricked into renting a car at a slightly lower up-front price, but one that comes with the risk of a high penalty fee at the end of the rental. As a result Hertz's competitors will rank higher in search engines that sort by price. That's unfair to Hertz, when its ultimate rental price might be cheaper.

It would be better for Hertz, and I would argue better for the entire industry, to have state attorneys general from all around the country, or the Federal Trade Commission, step in and say, "$8 gas prices are obviously unfair, and this practice must end." Enforcement of a simple rule that's already in many state lawbooks, which says that penalty charges must be aligned with actual costs incurred by the company, would suffice. And it would create a level playing field.

Perhaps that will happen on its own. Perhaps consumers will react so positively to Hertz's new policy that other car renters will have to imitate it. We'll have to wait and see.

Red Tape Wrestling Tips
*It's important to note that it will still be cheaper for you in most cases to fill the tank yourself than to let Hertz do it for you. Hertz's fair pricing simply provides a nice insurance policy if you are running late to the airport. One other note from Hertz's announcement: The firm is also offering small discounts to those who buy their gas up front when renting a car -- 15 cents per gallon off prevailing market price. That deal sounds tempting, and it might be convenient for business travelers, but those who pre-pay for a full tank usually lose because renters cannot return the car with an empty tank. Whatever's left in the tank is free gas for the rental car firm.

*Other rental car companies are also offering pre-paid gas discounts too. In some cases, these discounts might make sense -- those with large SUVs planning on car vacations might be better off renting a small car with this cheaper rental car gas. An excellent comparison chart can be seen at SmartMoney.com.

*In the meantime, Hertz and other rental car companies are capitalizing on consumers' fixation with gas prices and offering various "free gas" deals. At Hertz, for example, renters booking a minimum of three days can get a free tank of gas at some locations. Look for similar deals from other renters.

Consumers love the savings that come with those plastic discount cards. But they have drawbacks. An MSNBC.com "Gotcha Room" report, by Bob Sullivan, with Producers Andy Gross and Colleen Sanvido, graphics designer Patrick Longstreth, and editor Nat Cohen.

It's been 25 years since the U.S. has grappled with high inflation -- or has it? There are, after all, two ways to raise prices, but only one involves raising prices. The other involves reducing the value of what you get for your money.

That second method can involve packaging sleight-of-hand, such as reducing the size of a quart jar of mayonnaise by 2 ounces, to 30 ounces. But companies also have an even sneakier way of devaluing your purchases.

Edgar Dworksy, who publishes the Web site Mouseprint.org, chronicles such shrinkage. In a recent post, he reveals that Country Crock margarine recently changed the label on its tubs from "3 pounds" to "45 ounces." Sure enough, there's a 3-ounce shrinkage, the same as a 6.25 percent price hike.

One theory for the consistently small rate of inflation – which hasn't risen above 4 percent for a year since 1991, nor above 6.2 percent since 1982 -- would be that corporations have perfected the art of shrinking packages by these tiny, unnoticed amounts.

But product shrinkage is quantifiable. The Bureau of Labor Statistics' eagle-eyed data gatherers pick these kinds of things up, says Patrick Jackman, who runs the group that calculates the Consumer Price Index. The agency sends out armies of researchers every month who purchase a basket of goods and price them meticulously. It then calculates a price-per-ounce for goods like margarine, so Country Crock's inflation wouldn't go unnoticed, Jackman assured me.

Service 'shrinkage'
There is another way of raising prices that eludes the governments' secret shoppers, however. Let's call it service "shrinkage." When you are buying a service instead of a good, it's much harder to quantify when something is lost or degraded. But that doesn't mean it's not real.

This kind of inflation is most obvious in airline fares. Until recently, a $200 flight from New York to Chicago included meals and baggage handling. Now, meals can cost $10 and a second bag can cost $25. But if the price of the ticket has not changed, these tack-on fees will be missed by inflation spotters. Perhaps an enterprising economist could come up with some way to account for those fairly specific degradations, but there are many more ways airlines now ding you.

For instance, flight times are longer now, Jackman noted, but there's no credit for a passenger's lost time. What used to be a 90-minute flight is often now listed as a 110-minute flight by an airline, in part to account for air traffic control slowdowns and the like. That's fair, but it clearly devalues the ticket. Now, consider the miserable on-time ratings for most airlines. I was recently on a flight from New York to Utah that had a published on-time rating of 10 percent! Doesn't chronic lateness also devalue the service you've purchased?
Or more to our current topic, isn't that a form of inflation?

Inflation by degradation
Since I write a lot about broken technology, I think a lot about headaches that are caused by things that don't work. How many hours each month do you lose to dropped cell phone calls? Don't forget to factor in all the miscommunication caused by poor signals and the like. If your cell service has declined, the price of communicating has gone up.

Here's another example. How much time do you lose to long customer service calls each year? When you buy a product, you are paying for support too. If last year you spent 5 minutes on hold during a typical support call, but this year you spent 15 minutes, that's inflation. It just has a different, not-so-well-known name.

Caroline Baum, an economic columnist for Bloomberg and author of "Just What I Said," coined a term for this nearly 10 years ago -- inflation by degradation. She notes that because services make up about 60 percent of all economic activity, overlooking the impact of degraded services is a serious flaw in calculating the inflation rate.

In 2001, after a frustrating bout with a customer service representative, she ranted in her column that government statisticians "ought to seriously consider how to capture what every consumer knows is generalized deterioration in service in the information age."

If you think about it, you can probably find examples of reduced service and corner cutting all around your life. Share a few with other readers at the bottom of this story, if you like.

You are getting more for your money, so stop complaining
I'm not saying companies shouldn't save a few pennies here and there during difficult economic times. The problem is: How do we account for that? And how does our government account for that? If we are continually paying the same for less, it's insulting to be told we are in the golden era of low inflation.

The federal government explored this issue 10 years ago and concluded that Americans were actually getting more for their money as time passed. In fact, the research published by the Boskin Commission, which studied the impact of "quality changes" on consumer prices, concluded that inflation was overstated by 1.1 percent each year. The Bureau of Labor Statistics wasn't doing a good enough job giving companies credit for product improvements, it said. The commission argued that automobiles, for example, are a much better value today than 10 years ago because they break down less often, need fewer tune-ups and are safer, while prices have remained relatively constant.

In other words, you are getting more for your money, so stop complaining.

Partly as a result of the commission's work, the Bureau of Labor Statistics began using mathematical models called "hedonics" to reflect some of those quality improvements.

But, Jackman notes, nothing has been done to pick up service degradation and include it in the inflation calculation.

"There was an assumption (in the Boskin report) that all this quality change was one direction. It's not," he said.

No accounting for lost time
This is no esoteric, academic exercise. Major government expenses, such as Social Security payouts, are impacted by the inflation rate. A lower rate means lower cost of living adjustments. And when other government expenses indexed to inflation are considered, a lower inflation rate also has a big impact on the federal deficit and debt. That in turn, affects the stock market, the strength of the U.S. dollar, and many other important economic vital signs. So the federal government has some incentives to keep the rate low.
But don't instantly subscribe conspiracy theories about the alleged deflated inflation rate. There is a simpler explanation. Accounting for loss of services or lost time for consumers is an incredibly tricky proposition. In fact, Jackman says he really has no idea how to do it.

"In an ideal world you could treat these things by assessing the cost of time lost and that kind of thing, and value it, and incorporate it," he said. "But at this stage I don't think we have any idea of how to do that."
What price would you put, for example, on an hour of lost time? To a McDonald's employee, that's worth about $10; to a high-priced lawyer, about $300. Meanwhile, how would you count lost time? And, to be fair, how would you balance it with time gained that's not currently spent sitting in the waiting room at an auto-repair shop?

I've noted before that the most serious problem with consumer protection law is that it rarely makes any accounting for time. Sure, identity theft victims rarely lose money in the end, but they often lose countless hours to frustration, and receive no compensation. When a company causes a consumer harm by selling a defective product, and then forces that consumer to wait many weeks for a replacement and to spend hours filling out forms, the extra time is simply lost.

This same oversight applies to the problem of tracking prices. Companies now know that they can spend endless hours of our time without impunity, and so they do. When they look for ways to save money, they simply shift costs in the form of time onto consumers. And right now, there is little we can do about it.
Where does lost time go? Economists rather coldly talk about time choices that consumers make as a "labor-leisure" choices. Time lost to late flights and corporate fights generally eats into precious leisure time that would have been better spent having dinner with the family, gardening or getting exercise. That means inflation by degradation is a much more serious problem than simply an gap in government data.

Can you think of a way that companies have stolen your time recently that you might consider a hidden form of inflation? Share it below.

Rhonda Payne went to an AT&T Wireless store in Calhoun, Ga., recently to pay her phone bill in cash. She'd been hit by ID theft and was forced to close her checking account, so she was worried she wouldn't be able to mail a check on time. But when she arrived at the store, she was in for a surprise.

Paying in person, she was told, costs extra -- $2 extra.

Payne objected to the "administrative charge" that was added to her bill but got no sympathy. Instead, she said, she was told she should consider herself lucky because the fee was about to go up to $5.

"I was told that it was a courtesy to take cash," she said. "I said, 'Are you kidding me?'"

It's no joke. Beginning earlier this year, AT&T Wireless began to charge customers who pay their bills in their stores.

"It is a way of saving money ... it helps us keep our costs lower," said AT&T spokesman Mark Siegel. "We want our associates to spend their time helping customers as they are thinking about their wireless plans or looking at phones."

There are multiple ways for consumers to pay their bills for free, he added -- in the mail, by electronic payment and on the Web. There are even kiosks in stores where bill payments can be dropped off for free. But having a sales clerk take the payment costs extra.

"If someone really wants to pay using the service of a representative, we think it's appropriate to assess this fee," Siegel said.

The fee might remind some of the "talk-to-a-teller" fee introduced by First National Bank of Chicago in 1995.
Siegel said such fees are routine in other industries, too, citing credit cards as an example.

In fact, most credit card issuers do charge a similar fee, called "pay-to-pay." Consumers who call up banks to pay their credit card bills -- often at the last minute to avoid interest charges or late fees – often are assessed "pay-to-pay" fees ranging from $5 to $15. The practice has recently drawn scrutiny in Congress, and a credit card reform bill introduced by Sen. Carl Levin , D-Mich., would ban the practice.

Hurts the poor most
Consumer advocate Ed Mierzwinski, director of the U.S. Public Interest Research Group, said he's concerned about AT&T's new fee for another reason: It hits poor people hardest because they are most likely to pay in stores.

"It's targeted at people who don't have bank accounts," he said. "...It's punitive and largely indefensible.
"It's just unfair to me and I'm shocked by it. People that have less money have to pay more to pay their bills. … It hurts people that really don't have a choice."

Studies show that 10 million to 12 million Americans don't have bank accounts and have to pay their bills in cash, he said. Some are undocumented workers; others are consumers who have bounced too many checks in the past and are ineligible for checking accounts. Sometimes called the "unbanked," consumers who live in this cash economy are finding it harder and harder to maintain basic services, Mierzwinski said.

"I think (AT&T's fee) is going to lead to more companies charging more to people who want to pay with cash," he said.

Siegel denied that AT&T was targeting cash customers and said his company offers pay-as-you-go pre-paid phones that are better suited for consumers who want to pay in cash.
Payne has complained to state regulators and to the Federal Communications Commission, but hasn't received a refund -- or an explanation that satisfies her.

"This fee charged by AT&T is ripping off poor people," she said. "I've told everybody I know about this."

Add this to the list of hidden fees you need to worry about when renting a car: an unpaid tolls collection charge. Rental car companies are collecting hefty fees from consumers who drive through electronic toll collection booths without paying -- in some cases nearly 10 times the amount of the original toll.

For example, Advantage Rent A Car customers who accidentally drive through electronic toll booths on roads like the new Texas Highway 121, which has no human toll collectors, without the proper equipment can expect to eventually receive a bill stating that they owe the state 60 cents – and $5 to a company named Violation Management Services. At Avis, drivers who do the same can be billed $25 for each transgression, in addition to the toll charge.

The problem is twofold: Some drivers purposely drive though toll stations, figuring the rental car company will have to deal with problem if anyone does. But others are innocent victims who fail to pay simply because they aren't familiar with an electronic toll collection system and end up driving through the wrong booth, or find themselves on roads where there is no cash option for those who lack the required electronic-payment device. This problem is expected to get worse as more toll roads are built. According to Advantage, some 70 e-toll only roads are in the planning stages in Texas alone.

Governments and rental car companies aren't helping the situation. Many toll roads have confusing or hard-to-see signs guaranteed to confuse visitors.

And while some rental car offices let customers borrow the devices needed to pay e-tolls for a small fee, such services are not yet widespread and aren't compatible with every toll collection system. And with unpaid tolls increasing, many rental car companies are turning to third-party firms, which sometimes add hefty fees to the bill they send to the customer.

The rental car industry insists that it's only trying to recover the cost of going after intentional deadbeats who cost rental car companies "tens of millions of dollars" each year, according to industry analyst Neil Abrams of Abrams Consulting.

Abrams said that rental car companies generally pay the violations and then attempt to collect later from consumers. Even with the steep fees, he said, firms still lose money on unpaid tolls and tickets.

Profiting from violations?
But marketing materials from Violations Management Services, a third-party firm that helps rental car companies track down toll evaders and other violators, suggest violation collections can be profitable. The company indicates on its Web site that it can turn "a costly customer service headache into a profitable customer service solution."

Also on its site, VMS indicates it shares the spoils with rental car companies, saying it offers them a "summons incentive (up to $10 net) for each service fee collected."

And last year, when Violation Management teamed up with rental car software firm TSD, TSD CEO Charles Grieco said in a press release that rental car firms are "working with VMS to convert what is normally a cost center for the rental car company into a profit center."

Violation Management Services didn't respond to repeated requests for comment. During a brief conversation, company founder Dennis Round insisted that his firm is not a collection agency, but rather a billing agency, akin to the sort of firms utilized by doctors and other professionals.

The idea that companies might profit from government-issued violations may be unnerving, but it's not new. Municipalities have been outsourcing parking ticket collections for years. And rental car companies have long assessed fees for parking and speeding tickets.

Tollway agency doesn't limit add-on fees
Advantage's $5 fee for a 60-cent toll mishap may sound steep, but it's actually an improvement. When the new Texas 121 toll road first opened last year, service fees were as high as $40, according to Advantage spokesman Sean Buck. The company's service agreement warns consumers it could charge up to $100 for each violation, but the firm has yet to charge anyone that much, he said.

Gaby Garcia, a Texas Tollway spokeswoman, said consumers who don't have the electronic gadget needed to pay on Highway 121 are photographed and later get an invoice from the state with a $1 service fee charge tacked on. If a rental car is used in a toll violation, the rental agency receives the bill, she said. The agency does not limit the fees the rental agency can add on.

"We do encourage the rental car companies to be up front about their charges," she said.

Buck says the Advantage fee is disclosed multiple times to consumers before they drive off the rental lot. He also defended the amount of the $5 charge, saying the company merely covers the cost of tracking down the renters and processing the necessary paperwork.

"This is definitely not a revenue generator for us," he said.

'A very serious problem'
Abrams agreed. He said collecting a 60-cent toll violation could cost a rental agency $10, particularly because the firms often have to front the money to municipalities and then later try to recoup it from consumers.

Given the thin margins in the rental car industry -- firms are lucky to make $20 on the average $180 rental, he said -- companies are now forced to aggressively pursue violation collections, Abrams said.

"It is a very serious problem for the industry. ... It's a no-win situation for them," he said. "A lot of people when they get a ticket say, 'Screw it, it's the rental car company's problem.'" On the other hand, the firms risk ill will from consumers when they try to collect the charges, he said.

Other rental car companies charge much more than Advantage. Avis, for example, typically charges drivers a $25 "administrative fee" when it is forced to pay fines and collect later from drivers, spokeswoman Alive Pereira said.

"The administrative fee is neither a profit center nor revenue stream for us. It is an effort to minimize our loss," she said.

RED TAPE WRESTLING TIPS
One invisible victim of all this: due process. It's very difficult for consumers to get a copy of underlying citations in rental car violations, giving them little or no chance to invoke their rights to adjudication. It is alarming to think private companies can act as enforcement agents for municipal authorities without having to abide by normal due process procedures.

It's also alarming to think about the perverse incentives created by the "summons incentives" paid by firms like Violation Management Services. Parking tickets are already often abused by local governments as hidden taxes; privatizing that process and adding even more to the cost seems positively un-American.

In some cases, consumers are innocent and helpless – such as when they find themselves on Texas Highway 121. Driving through confusing electronic-only toll booths should not enrich any company or government agency.

Car renters should keep in mind, however, that they can settle up directly with the agencies involved and avoid service charges. If you know you've skipped a toll or received a parking ticket, contact the agency involved and pay up. The rental car company will leave you alone.

No one should drop off a rental car after incurring tickets and violations, hoping the company won't find them. That's naive, given our electronic age, and unfair.

Rental car consumers should closely watch their bills in the months after a trip, looking for erroneous violation charges.

And anyone who's uncomfortable with the notion of private companies profiting off of statutory violations should contact their elected representatives and complain.

You know all about rental car gas roulette: Either pay in advance for gas you'll never use, or bet that you'll have enough time to fill up the tank before you drop off the car. You might even know that some companies insist on a receipt as proof you've filled the tank if you take the second option.

But now, there's a third possibility: Pay up regardless. Some rental car locations are charging an extra fee to consumers who return their cars with a full tank. This "top-off fee" is being charged even if consumers present evidence they have that the tank is full. In other words, you're dinged if you do and dinged if you don't.

"I couldn't believe it," said Steven Dentali, who was charged the fee in October after renting a car from Dollar Rent A Car in Manchester, N.H. "I said to them, 'You're telling me I'm penalized no matter what? There's no way around me having to pay something?'"

That's precisely what the rental car agreement said. Here's the exact wording he received in his e-mail confirmation:

"Gasoline Policy: Vehicle must be returned with full tank or local refueling charge applies. If car is returned full a $2.00 top off fee will be applied."

When Dentali started asking questions, he said he was told that the fee was being test-marketed by Dollar at select locations in New England.

Dentali demanded a refund and was told he had to talk with a manager, who in turn told him to call Dollar's corporate offices. He did, and said he was promised a refund. But the $2 never arrived.

Dentali, who wins the Red Tape Perseverance Award for this month, made another phone call and sent an e-mail to Dollar. Finally, his complaint landed on the right desk. On Dec. 26, he got a late Christmas gift via e-mail from the rental card company, albeit a measly one:

"I am unable to advise you as to whether or not this is a permanent policy or what the purpose is for it, but in an effort to regain your confidence in Dollar Rent A Car, I have requested a refund check in the amount of $2.16 to be forwarded to you from our accounting office," wrote an employee of Dollar Thrifty Automotive Group, Dollar Rent A Car's parent company. "Please allow up to three weeks for processing and mailing."

'Not a widespread practice'

Chris Payne, a spokesman for Dollar Thrifty, said the location that assessed the "top-off" fee was a locally owned franchise, which is allowed to set its own policies. Corporate-owned Dollar locations don't charge the fee, he said.

"Franchisees are given some discretion when it comes to the operation of their own facilities, and occasionally they will have different fees," he said. "This 'top-off' fee appears to be something they have enacted. I can tell you that it is not a widespread practice among Dollar locations."

Rental car companies have been playing games with gasoline prices for years. In fact the games are so common that we don't even question them any more. Why, for example, does the price of gas double between the time you rent the car (and are offered the chance to pre-pay for gas) and the time you return the car?

Fortunately, rental car firms don't get away with everything. Just a few months ago, Budget Rent-A-Car got got the attention of the Federal Trade Commission after the rental company instituted a policy requiring receipts from customers who returned their cars full of gas, and dinging those who returned without receipts with $5 to $10 fees that the FTC said were poorly disclosed.

The top-off fee represents a new zenith in fee creativity. For Dentali, it was just too much to bear. Even though he figures all those wasted lunch hours, faxes, and phone calls ultimately cost him about $200 to get his $2.16 refund, he thinks the fight was worth it.

"My parents went through the Depression and taught me what a buck is worth," he said. "And I have a strong sense of what's right and what's wrong, a sense of fairness. …You catch a company sneaking a small dollar amount like that on your bill, and if you don't challenge it, they'll keep getting away with it."

By now, you probably know that gift cards sometimes come with hidden fees that make them lose value over time. But you might not know that bank cards -- which don't come from a specific store -- have the worst fees of all. Click to watch.

With time running short for online gift shopping, you may end up paying more than you should in tack-on fees and charges. Many Web sites advertise low prices, but conceal the true price -- including shipping, handling, and "expedited service" charges. But if you don't compare "out the door" prices, you'll never get the best price. Click to watch.