More people using prepaid cards to pay bills online – but beware hidden costs!

 Bill Pay News, Prepaid Cards  No Responses »
May 172012
 

Millions of American households do not have access to traditional banking services, or choose not to use them. These households are increasingly making use of prepaid cards to pay bills online or over the phone, shop online, and receive direct deposits.

Why Prepaid Cards?

In the current economy, where millions of people have experienced home foreclosures, bankruptcies or are deeply in debt, a lot of people don’t qualify for credit cards. These people might buy prepaid cards that can be used like credit cards to pay bills or shop at regular brick-and-mortar stores.

Prepaid cards

Use of prepaid cards is growing, but watch out for hidden fees.

Others appreciate the ease of shopping online – and the good deals to be found – but are wary of submitting their credit card information or banking details. They worry about credit card theft, bank theft and identity theft. These fears are not baseless. Many online retailers have been hacked and had the credit details of thousands of customers stolen. Many consumers feel that prepaid cards, which do not carry any personal information or link to a bank account, are a more secure alternative.

For all these reasons, the use of prepaid cards is growing. These cards have been around for a long time in the USA, but in recent years their use has mushroomed.

In 2011, about 13 percent of U.S. consumers used prepaid cards, up from 11 percent the previous year, according to a study by California-based Javelin Strategy & Research.

Prepaid card use grew last year even though ownership of other more traditional financial products — such as credit and debit cards — decreased, according to the study.

Concerns About Fees

Consumer advocates point out prepaid cards often have excessive fees for basic activities and transactions, and many cards do not transparently disclose the fees.

There are fees to activate the card, fees to load additional funds onto the card, fees to check the balance, monthly maintenance fees, fees to call customer service, fees to use an ATM, and often fees simply to withdraw cash from the card.

Consumers are often not aware of these fees, and the prepaid card industry is not required to fully disclose them. These fees add up and can make a prepaid card much more expensive than a bank account, which places an added burden on the poor and financially disadvantaged.

“I don’t think everything about prepaid is bad, and I think there is a need for it and a market it makes sense to serve,” says David Rothstein, project director for asset building with Policy Matters Ohio. “I think the biggest problem is that to some degree the product has come out before the protections and the network are in place.”

Rothstein said people commonly treat prepaid cards as gift cards when they are a completely different product that serve a different purpose.

“Moving people away from (the gift card) mentality is really important,” he said.

Manilla.com Brings Convenience to Online Bill Paying

 Advantages of Online Bill Pay, Bill Pay News, Retail Bill Payment, Utilities Bill Payment  No Responses »
Mar 212012
 
Young woman paying bills

Make scattered bills a thing of the past by paying and storing your bills online.

Would you like to free yourself from paper bills altogether? How about being able to see and pay all your bills on one website? Not to mention saving trees, and cutting down on the 48 billion paper notices and bills sent by the U.S. Post Office every year.

A new service called Manilla.com claims to help you collect and organize your bills — everything from credit card and mortgage payments, to student loan debt and auto payments.

Manilla.com also has a free smartphone app, so you can see and pay your bills on the phone.

Best of all, the Manilla.com service is free to the consumer. It’s paid for by the billing companies, since they save money not having to send out paper bills. And they can post important notices like required privacy forms or billing practices online for each customer to read in his or her own account.

Terry Savage of the Chicago Sun-Times writes:

No more going to your mailbox or post office box, or risking late payments because you were traveling. Now the bills arrive in your Manilla account, where you can see the exact bill that would have arrived in paper form. You can see the exact details — even more than many billers send in the mail. And you can reach out to contact the biller or dispute a charge, just as if you had received a paper bill.

Manilla will notify you when bills are coming due, so all you have to do is click and pay securely. And if you have several bank accounts (for business and household, for example), you can choose which account to pay from when you are paying your bill.

There’s a handy calendar on your secure home page, showing you regular monthly bills that you receive and the date by which they must be paid. Plus, Manilla will send you reminders by text or e-mail when regular bills are scheduled to arrive — or if you’ve failed to pay a bill on time.

In a way, Manilla.com is also a records storage service, since it saves all your paid bills for years. It also has a search feature to search through past bills quickly.

I haven’t personally tried Manilla.com, but I’ll check it out. If you have used it, please let us know how it’s working out for you.

Frontier Online Bill Pay

 Cell Phone Bill Payment, Utilities Bill Payment  No Responses »
Jan 172012
 
Frontier Communications

Frontier Communications is a U.S. telecommunications company headquartered in Stamford, Connecticut. Until 2008 it was known as Citizens Communications Companies. Frontier is one of the USA’s biggest rural local exchange carriers. They offer local and long-distance telephone service, broadband Internet, and digital television service to residential and business customers in 27 states in the U.S.

Frontier’s online bill pay home page is here:

https://www.frontier.com/billpay/login.aspx

Frontier’s billing and payments FAQ is here:

http://frontier.com/billing/faq/

Frontier Customer Complaints:

In 2009 Frontier purchased 4.8 million Verizon landlines across several states.  Many customers have complained that after Frontier took over, their rates went up. There have also been complaints of poor customer service, and excessive and unexplained charges on the bills. If you check out the reviews of Frontier’s service at ConsumerAffairs.com, it’s rather shocking. There are scores of customer reviews, almost universally bad.

As far as online bill pay with Frontier, George of Madison, Wisconsin writes:

I always paid my bill online with Version but, according to Frontier’s customer service, they had a problem with their web site and were unable to process payments on line. (Really? An internet provider with a faulty web site). It took at least six months to resolve that problem and during that time I had to watch my bills carefully as my account was not always credited with my payments. I had to call almost every month to call attention to their errors.

Another customer from Morganville, Illinois writes:

1. Because Frontier bought out Verizon in my area, we have to go through hoops just to pay our Frontier bill online (as they want to charge $2 to pay it over the phone). We can’t use Frontier’s homepage to pay the bill, every month I have to get my account information sent to me in an email just so I can get the proper link to pay the bill. I would have thought they’d like me to pay my bill on a timely basis.

2. The correct Frontier billing page almost always never loads properly. I can click it 30+ times before it will pop up without an error.

Frontier Online Bill Pay Pros:

  • Frontier’s online bill pay service is free.
  • It’s also secure (i.e. uses the https protocol that encrypts your payment information).
  • You can view your bill online from any internet device.

Frontier Online Bill Pay Cons:

  • Many customer complaints of overcharging, poor customer service, and and difficult-to-use website.
  • By signing up for automatic payments through Frontier online bill pay, you give them access to your bank account or credit card. You won’t necessarily have a chance to review your bill before paying, which could be a problem if you get overcharged.

Conclusion:

Based on consumer comments I don’t think I’d sign up for Frontier if I had any alternatives.

Verizon Wireless Adds $2 Charge for Online Bill Payment, Meets Storm of Criticism

 Bill Pay News, Cell Phone Bill Payment, Utilities Bill Payment  No Responses »
Dec 302011
 
A Verizon Wireless store in Washington, D.C. Verizon Wireless has angered customers by announcing that it will begin charging $2 to pay bills online.

A Verizon Wireless store in Washington, D.C. Verizon Wireless has angered customers by announcing that it will begin charging $2 to pay bills online.

On the heels of poor network performance this month with three separate data outages, Verizon has angered customers further by announcing that beginning January 15 2012, it will charge customers $2 to make one-time online bill payments, or to pay by telephone.

The company called it a “convenience fee.”

The fee won’t apply to electronic check payments or to automatic credit card payments set up through Verizon’s AutoPay system. Paying by credit card in a Verizon store will also be free, as will mailing a check.

The move was met with heavy criticism. Consumer blog Engadget said charging customers to pay was “downright ludicrous.” Cnet.com said the move “made little sense.”

Verizon Wireless spokesman Thomas Pica tried to justify the online bill payment charge, saying, “The fee is designed to address costs incurred by us for only those customers who choose to make one-time bill payments in alternate payment channels (online, mobile, telephone) and who choose not to use the other options available to them ….”

However I personally find this charge to be outrageous. I have been a Verizon wireless customer for over two years, and although I’ve only paid my bill online once (I usually pay cash using the payment machine in the Verizon store) I would consider switching providers over this. I’m a customer, not a personal ATM machine for Verizon to pad their profit margins.

Verizon Wireless rivals AT&T Inc and Sprint Nextel Corp said they do not charge their customers for any bill-payment options.

Is It Safe to Pay Bills Online? – Part 1

 Basic Bill Pay Concepts, Bill Pay News, Scams and Fraud  No Responses »
Nov 152010
 

The https prefix indicates a secure website

The https prefix indicates a secure website

Clearly there is some element of risk involved in any sort of online financial transaction. Credit card numbers or bank account numbers can be stolen, passwords intercepted…

I recently had an unauthorized $400 charge against my debit card. Someone used it to pay for a plane ticket. My card is always in my wallet, but I often use it to make purchases online or pay bills. Apparently the card information was intercepted or stolen somehow. The card has been closed and my bank refunded the charge, but the point is that online financial transactions carry a risk. Online bill payment is no exception.

So how do we minimize the risk? How do we know that an online bill payment website is secure? How can we safely transfer money online, or buy a product without worry?

1. Make sure the bill payment website is secure. The website address or URL should begin with https rather than http. https indicateds a “secure socket layer” or SSL connection, which is one in which data is fully encrypted and therefore protected.

Typically with an https website you will see a padlock icon in the corner of the browser window, either at the top or the bottom (or in some cases it may even turn the URL address background light blue or green). Clicking the padlock icon reveals the site’s security certificate and allows you to read about the protection that this affords.

2. Make sure the login process is secure. A quality bill payment website will usually give the customer two options: either to pay instantly as a guest, or to register and save payment information for future transactions. Neither one of these is necessarily better – it depends on your preferences – but both options should be secure.

If you’re paying as a guest, the website will usually ask only for your email address, then ask you to choose a payment option. Payment options could include online bank account, credit card or debit card. If you choose to pay by credit card or debit card, you may have to verify the card through 3D secure-a process used by major credit card companies as an added XML layer for online credit and debit card transactions. Visa call this process “Verified by Visa”, MasterCard call it “MasterCard SecureCode”, JCB International call it “J/Secure” and American Express call this “SafeKey”.

When choosing this option, look for specific statements on the website that credit card or debit card information will not be saved or stored in any way.

If you choose to register, a well designed and secure website will ask you to choose a name and password for future logins, and may also ask for your name, email address, physical address, and telephone number. You may even be asked for your date of birth, driver’s license number or passport number, though in my opinion asking for such information is excessive and carries the risk of identity theft. The same is true for your social security number. There’s no good reason for a commercial website or bill pay website to ask for such info.

You will often be asked to set up security questions in case you lose your login info. This is legitimate and common. Some websites now use cell phone verification. If you attempt to log in from any computer other than your usual computer, the website will send a verification code to your phone by text message. You must then enter the verification code into the website to proceed. While these procedures may seem excessive, they are part of a good security system and they are there for your protection.

Green Online Bill Payment?

 Advantages of Online Bill Pay  No Responses »
Aug 102009
 

In a blurb on GreenTechMedia.com, Michael Kanellos points out the “green” aspect of online bill payment. He writes:

Bill.com – how did they ever secure that name? – has raised $8.5 million in another round of financing for its online bill payment system for companies.The company was founded by Rene Lacerte, who sold PayCycle, an employee compensation service, to Intuit.

How is it green? Paper and transportation. Paperless bill payment can save 7.5 pounds of paper and 71 gallons of water, when you look at the entire supply chain. It also can cut 297 pounds of greenhouse gases. Considering that the bulk of a bill gets thrown in the garbage (An coupon for a Dale Earnhardt Memorial Grandfather Clock in my monthly Chevron bill, anyone?) there’s not a lot of reasons not to go paperless.Paperless transactions, of course, require servers and electrical power, but the balance likely favors paperless in most jurisdictions.

In the comments a reader makes this objection:

Carl Hage 08/5/09 3:33 PMThe problem for me with online bill pay is that you can’t get a bill via email. You get an email that says you should login to a web site, then “download” and/or print your statement. If you don’t download within 6 months, it’s erased, in many cases. Typically, these web sites are horribly painful to use, and login might take a minute or more of clashing through menus before getting a statement. All I want an an emailed PDF or even better—text file, but not a single company can do this (except my web service provider). I would use online billing, but it’s so painful, I use paper.

I see his point. I like to have paper copies of my bank statements for tax purposes (it just makes it easier to calculate at tax time), so even though I use paperless online banking, at the end of the year I go to the website and print out copies of the statements. Does that defeat the purpose? On the other hand I don’t get all the junk fillers that sometimes come with mailed statements, and I don’t have to throw away envelopes.

New Credit Rules Protect Online Bill Pay Customers

 Credit Cards  No Responses »
May 232009
 

President Obama has just signed into law the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009. The law protects consumers by outlawing somne of the worst credit card company abuses, such as retroactively raising interest rates on balances, manipulating payment due dates and charging high fees for paying a bill by phone or online. Yes, that’s right, some credit card companies have been known to charge customers fees for paying bills online. Why? Who knows. Just another way to jack up their profits.

I’m not naive. I know the credit card companies are not going to give up an estimated ten billion dollars in profits (that’s how much this bill may cost them). They will look for ways to recoup their profits. Deb Price writes in the Detroit News,

“In response to the new limits, credit card companies could add annual fees for cards, end interest-free grace periods, make cuts in reward programs, tighten credit, raise rates or lower card limits, analysts say.

If card issuers do add new fees or raise interest rates in response to the new law, the changes will have to be disclosed up front so customers will have a better idea of just how much they’ll pay to put purchases on their cards.

“The new rules definitely will help keep balances from increasing as quickly as they have in the past,” said Dianne Reichel, a credit counselor with GreenPath debt management in Detroit.

Many clients of the nonprofit agency have gotten in over their heads not only because of high credit card balances but also because of hefty fees and penalties that also push interest rates up to nearly 30 percent.

“For a lot of people who come to us, it just builds and builds and that’s when their debt spirals out of control,” Reichel said.

Consumer advocates and Democratic legislators, including Levin and Rep. Carolyn B. Maloney, D-N.Y., have pushed credit-card reforms for years. This bill finally passed because a Democratic president and Congress tapped into public fears over the sinking economy and outrage at being gouged by the bankers taxpayers have bailed out during this financial crisis, Levin said.

“The public has really been incensed about it for a long time, but we also had a Democratic president who would sign the bill,” Levin said. “That was not the case with President Bush.”

As welcome as the new credit card rules are, they won’t solve everyone’s debt woes, noted Reichel, the GreenPath credit counselor, especially for people who simply charge more than they can afford to pay off.

“I don’t think it’s the fix for everybody’s credit problems, unfortunately, because consumers still need to control their spending and really make an effort to pay down their bills.”

Still, I’m glad the President has taken a step toward eliminating these exploitative practices. I feel like we finally have someone in the White House who is looking out for the best interests of the people.

Changing credit card numbers can be a hassle with online bill pay

 Credit Cards  No Responses »
May 012009
 

In an article in the online version of the Arizona Daily Star, Dale Quinn points out that while paying bills online can be very convenient (and saves money on postage), it can be a real hassle if you lose your credit card. He tells the story of Drew Vactor, a Tucsonian who owned Tucson’s famous Tack Room restaurant, and who owned the same credit card for years. Mr. Quinn writes:

“He used the card, a Citi Mastercard, to automatically pay about 10 bills, mainly utilities — until one day recently he was issued one with a new number.“It’s not a major thing, but it probably took an hour or so to go through and notify them all,” he said.

Vactor was glad he kept a list of all accounts for which he had set up automatic bill payments. Otherwise it would be tough to remember them all, especially because the time between billing periods varies.

He called his card company to find out what happened. At first someone told him his card might have been lost or stolen, but that wasn’t the case, he said. After a bit of cajoling, he learned there had been a security breach and several customers had been issued new cards.

The credit company wasn’t forthcoming with many details, he said. “They were really hesitant.” 

In response to Vactor’s story, a Citi spokeswoman claimed that Citi takes immediate action on any customer accounts that have been affected by a security breach; and she acknowledged that some credit card accounts may have been compromised by a malicious software attack in 2008. The article continues:

Companies with customers who use automatic bill pay find that if they don’t change the account information, the payment gets rejected.

Cable and telephone companies, fitness clubs and movie rental Web sites often allow their customers to set up automatic online payments.

Susan Sipp, the account manager for Tucson Racquet & Fitness Club, said that when she ran automatic credit-card payments each month she usually got 25 rejections. In recent months it’s been closer to 50, she said.

In that case, the fitness club has to contact the customer to find out why the card was rejected and if there is a new number.“

In a good percentage, people’s credit cards have been changed because of the bank and they just forgot to notify us,” Sipp said.Lee Hill, another consumer who was issued a new credit card and number, said her issuer told her a vendor where she used the card had been compromised. She had about six or eight bills that were paid automatically through the card.The bank could have given her a bit more information to make sure all the bills would keep getting paid, she said.

“They don’t really tell you if you have automatic charges be sure to call all these vendors because your card won’t be any good,” Hill said. “It’s not insurmountable, but it’s a pain in the neck.”Vactor agreed that dealing with the new card was a bit of a hassle. But ultimately, he appreciated his credit-card company taking the precaution and issuing him a new card if there was a chance his information had been compromised. 

Jump in Online Banking Fraud Due to Keylogging

 Online Banking News, Scams and Fraud  No Responses »
Mar 282009
 

The BBC news online reports that there has been a big jump in online banking fraud in 2008 due to fraudsters using malicious software programs called “keylogging” programs that track what keystrokes you type on a computer. This is occuring not in internet cafes or on public computers, but on online banking customers’ home computers.

 How does this malicious software get on one’s computer? A spokeswoman for Apacs, the UK’s online payments association, explains that it happens when people click on unsolicited emails and open the attachments. These attachments may disguise themselves as harmless photos, songs, or news stories, while the malicious keylogger program secretly installs itself. The program then tracks the victim’s keystrokes in order to gather credit card numbers and online banking passwords, which are then secretly mailed back to the criminals behind the fraud.

“The industry continues to remind customers to ensure that they have their computer’s firewall switched on and anti-virus software up to date,” said the Apacs spokeswoman.

Total fraud losses on UK debit and credit cards rose by 14% to £609m. Most victims of card fraud in the UK are not liable, so their money is refunded. Anyone in the UK who is a victim of fraud is not liable, under terms outlined in the Banking Code. As long as they have not acted fraudulently or without “reasonable care”, they will be reimbursed if somebody uses their card, steals it, or clones it. The code says that if somebody uses a card before it is reported lost or stolen, or somebody knows a Pin, then the victim could have to pay the first £50 that is lost.

To quote the sergeant from the old American cop show Hill Street Blues: “Let’s be careful out there.” 

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