Definitions

fee splitter

Fee

[fee]

A fee is the price one pays as remuneration for services, especially the honorarium paid to a doctor, lawyer, consultant, or other member of a learned profession. Fees usually allow for overhead, wages, costs, and markup.

Traditionally, professionals in Great Britain received a fee in contradistinction to a payment, salary, or wage, and would often use guineas rather than pounds as units of account.

A contingent fee is an attorney's fee which is reduced or not charged at all if the court case is lost by the attorney.

A service fee, service charge, or surcharge is a fee added to a customer's bill. The purpose of a service charge often depends on the nature of the product and corresponding service provided. Examples of why this fee is charged are: travel time expenses, truck rental fees, liability and workers' compensation insurance fees, and planning fees. UPS and FedEx have recently begun surcharges for fuel.

Restaurants and banquet halls charging service charges in lieu of tips must distribute them to their wait staff in some U.S. states (e.g., Massachusetts, New York, Montana), and may keep them in others (e.g., Kentucky).

A fee may be a flat fee or a variable one, or part of a two-part tariff.

It is now very common in the United States for fees to be used to hide the real price of a service or product, in a widely-used form of deceptive advertising.

Advance-fee fraud is a scam, although some contractors or other businesses may legitimately go bankrupt after accepting an fee in advance.

Telecom

For telecommunications services such as high-speed Internet and mobile phones, an activation fee is commonly assessed, although most companies fail to include it in the advertised price, and activation means only typing some customer information into a computer. For example, as of 2008, Verizon Wireless has begun charging 20 dollars for activation of its phones, even for existing customers who want to upgrade. Customers are told that the phones can be returned or exchanged within 15 days, but are not told that the extra fee (which has been disclosed only in fine print) will not be returned, and that yet another fee will assessed against him or her for getting a different new phone, or even going back to their old one.

Another fee is the early-termination fee applied nearly-universally to cellphone contracts, supposedly to cover the remaining part of the subsidy that the provider prices the phones with. If the user terminates before the end of the term, he or she will be charged, ofter well over 100 dollars. In the U.S., mobile phone companies have come under heavy criticism for this anti-competitive practice, and the FCC is considering limits to prevent price gouging, such as requiring the fees to be prorated.

Some telephone companies, including AT&T, include a regulatory cost recovery fee in the bill each month of around three U.S. dollars, passing the blame onto government regulation, and essentially charging their customers for complying with U.S. law.

Banking

Banks are also notorious for extracting large bank fees from their customers, who have no recourse as the bank already has their money. These fees can be extremely high, often many times that actual amount of a small and accidental overdraft, because they are not proportional to the amount of overdraft. Banks also encourage this by paying the largest of several debits in a night first, so that multiple large fees can be racked-up against the customer when there is not enough left for the smaller transactions.

U.S. banks also extract fees from automatic teller machine transactions that are made at another bank, even if the customer's home bank has no branch in the area (such as when the customer is on vacation) and has failed to provide any free alternative through an ATM network. Customers are now hit twice, both by the bank that owns the ATM, and now again by their home bank. Some, including Bank of America, even charge a denial fee, literally a fee for refusing service to the customer (if there are insufficient funds or a daily limit), and a fee to simply check the account balance at a "foreign" (other bank's) ATM.

Renting

Like an activation fee, a setup fee is often charged by places that rent space or other things. In the case of self-storage businesses, this negates claims of "only one dollar for the first month" made by Public Storage and others. Apartment complexes often charge fees for pets (mainly dogs and cats). Some complexes euphemisitically call these a non-refundable deposit, ignoring the definition of a deposit as inherently being refundable.

House purchasing

A title company or attorney collects a variety of fees in the course of handling the purchase of a house. These may include fees for tax service, flood certification, underwriting, appraisal, credit report, record deed, record deed trust, loan signing and processing.

Event tickets

With respect to events tickets, online reservations and payments, and other transactions, there is sometimes a service charge (often called a convenience fee) that serves as additional compensation for the company facilitating the transaction. Ticketmaster and others charge this, and have made a business model of it. However, such groups have a monopoly on particular events or even entire concert venues.

Air travel

Airlines have long charged fees for changing flights, and for excess luggage. However, with the oil price increases since 2003, many are increasing fees. In May 2008, it was announced that some would be charging even for just one checked bag, making it nearly impossible to avoid.

Airports also charge landing fees to airlines in order to cover costs, particularly airport security.

Customer service

Some businesses charge fees just for talking to a customer service representative. DirecTV charges this when ordering a pay-per-view movie via telephone instead of through the set-top box. Some companies charge for technical support, either prepaid or by using a premium-rate telephone number (such as the 1-900 numbers in North America).

Speaking

A speaking fee is a payment awarded to an individual for speaking at a public event. Sometimes it is used as a way to pass money to individuals which would otherwise be prohibited.

Late fees

Late fees are charged when payment is not received by a deadline.

Retail

Some retail stores add fees, mainly for "guest passes" at membership warehouses like Costco and Sam's Club, where membership dues have not been paid.

There are a few other "cost-plus" stores, however, that add ten percent or so at checkout, using the lower shelf price to trick consumers into erroneous comparison shopping. At Food Depot and other smaller low-end chain stores like this, the shelf price may be 1.95, when the shopper will actually be charged 2.15 in the end, in a sort of legalized bait and switch. (Furthermore, a disclaimer indicates the shelf price is not even the actual cost to the store.)

Infrastructure and environment

An impact fee is a charge which a developer must pay to local government, in order to raise money for capital improvements to roads, libraries, and other services upon which the new land development places a burden. This prevents existing residents from being forced to pay in taxes, in addition to already having to put-up with the traffic, noise, and environmental damage of the new development.

Government

Public resources

A user fee is a fee paid for the use of a public resource, like a park. This is most common for national parks, and often also state parks or provincial parks, and for privately-owned areas.

Licenses and permits

Fees are usually charged for various government services, including license plates and annual motor vehicle registration, as well as driver licenses and professional licensing. Fees are also charged for various permits, like demolition and building permits, rezoning, and land grading (which causes silt); and sometimes for increasing stormwater runoff, destroying native vegetation, and cutting-down healthy trees.

Deceptive use

Sometimes fee is used to whitewash what are actually penalties or taxes. For example, Virginia's now-repealed Civil Remedial Fees were actually a tax on drivers with certain kinds of traffic law violations.

Schooling

At public universities and community colleges, students are charged tuition and matriculation, when can themselves be considered fees charged per credit hour. However, the term student fees typically refers to additional charges which the student is required to pay, typically no matter how many hours the student is taking in the academic term.

Commonly this is a student activity fee, which helps to fund student organisations, particularly those which are academic in nature; and those which serve all students equally, like student government and student media. A newer fee is the technology fee, which is often charged to students by schools when state government funding fails to meet needs for computers and other classroom technology. Students may also be charged a health fee which usually covers the campus nurse, and possibly a visit to a local clinic if the student is ill.

Parking fees are normally optional, because students may not have their own automobiles. Hoewver, many U.S. schools are now forcing meal plans on their students, particularly those that stay in dorms, and some force freshmen to stay in the dorms. Generally, all fees except parking are covered under scholarships, whether they are from private, government, or lottery funds.

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