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Consumers express concerns over cost recovery fees

Charging these fees isn’t illegal, but consumers can take action to combat them

Fees concept with blocks
Photo (c) gustavofrazao - Getty Images
ConsumerAffairs recently noticed comments regarding “cost recovery fees” that were issued by Brinks Home Security in reviews posted by Alan, of Duncan, S.C., and Paul, of Ft. Lauderdale, Fla. 

Alan claimed that Brinks used a cost recovery fee “as a way to raise prices.” He noted that his monthly bill from Brinks is $25.00 and that his cost recovery fee is now over $6.00 per month. Paul’s concern was that since he was on a month-to-month contract with Brinks, his rates kept going up. When the cost recovery fee was added last year, his rate went up even higher.

Alan’s and Paul’s concerns raised a question about how these cost recovery fees work, so ConsumerAffairs decided to research the legality of the fees and what options exist for consumers who have to pay them. Here’s what we found out.

Are cost recovery fees legal?

In Alan’s and Paul’s case, Brinks has the right to charge cost recovery fees. While they might not sit well with consumers, those fees are not illegal. In fact, they’re used for everything from vehicle rentals to fisheries. The bottom line is this: companies and service providers are allowed to cover any fee that is imposed on them such as regulatory fees for operating their service. 

In Brinks’ situation, a company spokesperson told ConsumerAffairs that the cost recovery fees that it charges customers help offset things like the company’s out-of-pocket costs to keep its technology up to par. 

“By the end of 2022, the company is estimated to spend ~$125 million on 2G and 3G technology upgrades as cellular companies eliminate previous generation technologies. The cost recovery fee is charged by the company to fairly recoup a portion of such fees,” a company spokesperson told us. 

Like Brinks, companies that charge cost recovery fees tend to disclose them on their websites. The amount of the fee depends on the service provider, where the consumer lives, and the level of service or plan a customer signed up for. As an example, AT&T charges a $1.50 fee per line in Hawaii to cover some of the costs from government-imposed fees. 

Are there alternatives to paying those pesky fees?

ConsumerAffairs asked consumer and money-saving expert Andrea Woroch if there’s a way consumers can either avoid cost recovery fees or find an alternative where the fees have less of an impact on their bill. She said doing consumers should do their research before signing up with a company to give themselves the best deal.

“You can find details about cost recovery fees in your contract or on the service provider's website. Keep in mind, comparing rates with different service providers can help you spend less on this fee. Negotiating may also help recover some of these fees, but the fastest way to stop wasting money on this fee is to lower your overall bill,” Woroch told ConsumerAffairs. 

Woroch cautioned consumers to keep in mind that fees are often charged on a percentage of the overall bill. She suggests that consumers scrutinize their plan (cable, wireless, home security systems, etc.) to figure out if they’re actually using everything they’re paying for. If they’re not, they should consider switching to a lower-cost option. 

“For instance, you can now get premium wireless service for just $15 a month through an online-only carrier like Mint Mobile-- with less overhead, they can pass on savings to the consumer,” Woroch said. “Switching to a cheaper option can help you spend less on these cost recovery fees!”

Asking for some help might get you some

To Brinks’ credit, the company does a thorough job of responding to reviewer complaints on ConsumerAffairs. In both Alan’s and Paul’s situations, the company asked them to reach out to discuss the matter further. As Alan found out, Brinks was helpful in resolving his issue. 

“Brinks agreed to honor the monthly price, which was agreed a year ago, until the end of my contract (2 more years),” he told ConsumerAffairs in an email. “I still have not received a written explanation of the ‘cost recovery fees’ but the seemingly random pricing increases was my main concern and this will not happen in my case.” 

In response to Paul’s review, Brinks stated that it “takes all complaints seriously, and we appreciate you bringing this to our attention.” A representative asked Paul to email the company with details about his experience and that they looked forward to speaking with him.

Brinks’ response is proof that asking for help doesn’t hurt, but it’s no guarantee that every company will respond in a similar fashion. Still, writing a review starts the process of possibly achieving a win-win result for both parties.

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