To gain additional favor with customers, Blockbuster Video earlier this year tried scrapping late fees.
But this isn’t the case with some Ohio utility companies, which believe late fees go far in keeping residential customer payments on time.
“The bottom line is, if you pay your bill on time, then you don’t have to worry about it,” said Mark Durbin, a First Energy spokesperson.
The company’s subsidiary, Toledo Edison, charges residential customers 1.5 percent of the unpaid bill on the subsequent balance if payment is not remitted by the due date. The charge only applies after two or more late payments in a 12-month period, and customers on payment plans are exempt.
Durbin said the utility attempts to work with past-due customers but “many times we just have any alternative. We owe that to our other customers, that there’s some kind of sanction there.”
He defended the practice of late charges, saying, “Look and see sometimes what you would pay with a credit card, and then you may not think (late fees are) unfair.”
After researching other wireless companies’ policies, Verizon Wireless established a monthly $5 or 1.5 percent late fee — whichever is greater — nationwide in 2002.
“Our goal is not to penalize the customers,” said Laura Merritt, Verizon public relations manager. “It’s more or less to remind the customers. It’s very easy to forget.”
Merritt said Verizon initiated a late fee to protect customers from incurring costs generated by late payments. “Like any other company that has enacted the same policy … it’s a way for us to ask people, ‘Hey, what can we do to make you remember your payment?’”
The company offers an online payment option that allows clients to view their bill and avoid paying extra fees, Merritt said.
Columbia Gas of Ohio has not assessed late charges for residential customers since 1994, although the company has that option should a balance reach or exceed $2,000.
“We don’t normally charge a late fee for residential accounts,” said Gina Thompson, community relations manager. “We try to make payment arrangements. If they’re already struggling to pay the bill, assessing them a late fee is not going to help the situation.”
Each Ohio utility company determines its own late fee, then files an application with the Public Utilities Commission of Ohio (PUCO), according to spokesperson Shana Eiselstein. She said the individual fees are usually approved as long as they’re applicable to the utility’s rate schedule. PUCO commissioners will suggest a fair fee amount if the utility’s application is deemed too high.
For the majority of SBC Ohio customers, telephone late fees aren’t an issue, said spokesperson Kim Kowalski. Late payers face additional monthly charge of 1.5 percent of their unpaid balances, but not until they exceed $25. There are exceptions, such as unpaid amounts in dispute, and each customer can receive a one-time late fee waiver, Kowalski said.
She said the late fee was initiated expressly to discourage late payments. Customers struggling to pay can arrange a reasonably personalized payment schedule to fit their financial situation.
MCI telephone service also charges 1.5 percent of an unpaid balance if charges are not paid within 35 days of the due date. An MCI spokesperson was unavailable for comment.

This entry was posted on Wednesday, May 25th, 2005 at 12:00 am and is filed under TFP Version 1.
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