Profitt Report: Consumer protection groups say hidden fees are a growing problem
Consumer protection groups are worried about the growing problem of hidden fees. The Consumer Federation of America and the Federal Trade Commission have been looking into the issue, saying these fees are costing consumers billions of dollars every year.
From concert tickets to cell phone plans, the National Economic Council recently released a report, detailing hidden fees in consumer goods.
That fine print is where hidden fees can often be found. For example, the NEC said service fees added to concert tickets and sporting events added up to more than $1.6 billion last year.
Phone bills are big one for hidden fees according to the CFA. they estimate hidden fees add about 25 percent to our bill for communications services such as mobile phones, broadband and cable.
We checked in with Jason Cryderman of Great Lakes Investment Advisors in Midland. He warns us of hidden fees in our retirement planning.
“What we found is most families are unaware of a lot of their fees are,” he said, “most families that we meet, they're paying on average two percent of fees. Some of those fees they're aware of, some they're not aware they're paying.”
Two percent might not sound like a lot when it comes to a bigger, long-term investment such as a 401(k) or IRA, but Cryderman and his team try to get clients down to about one percent in fees.
“If you we look at a $100,000 investment, that $20,000-40,000, that could be a half year, one year of income (in retirement),” he said.
Though Cryderman said fees aren’t all bad; they’re a necessary part of doing business. Cryderman just cautions that you know how your money is being used.
“You want to ask questions, what are the fees? How much are the upfront fees? Annual fees? Hidden fees? Put a calculator to the fees and do the math, what does that one, two percent fee mean to my money over the next 10, 20, 30 years?” he said.
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