Do Companies Compose Price Increase Letters When They Raise Rates?


Quick Answer

Companies within various industries, but not all companies, make it standard practice to compose price increase letters for customers when they raise rates, so the customers won't be surprised when they receive their future invoices and the amounts exceed what they're willing to pay. In the legal field, it's become a virtual holiday tradition for law firms, in particular, to send out annual rate increase letters to their clients notifying them of fee hikes for ongoing services.

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Full Answer

Businesses that provide child care services, such as day care centers and preschools, typically compose fee increase letters for their customers. This practice is especially warranted if the rates have been fairly stagnant over several years; in this instance, a letter regarding an increase would likely be taken as a reasonable measure for the services provided, rather than being based on a profit motive.

When health insurance companies want to increase the rates for their health plan enrollees, or members, they must first notify the state, and in some states, such as New York and Maine, they must secondarily notify the enrollees. Aetna, like other companies, sends its members an actual letter. Professionals such as massage therapists may also deliver news of an impending rate increase by letter to both inactive and active customers.

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