I recently had a tight cash flow situation, so asked our HR person about taking a loan from my 401(k). She said no problem, there are no fees or anything. I was surprised, and asked again if there are definitely no fees. She said yes.
Then I take out the loan and there is an $85 administrative fee. Not only that, I find out that it's an ANNUAL fee for having a loan. This is an outrage. First of all, none of the papers I filled out said anything at all about an administrative fee. Second, this is a huge fee. That means if someone take a $1000 loan, they are paying 8.5% just for the fee! Tack on the 6% interest, and you are paying 14.5%! You might as well put it on your credit card!
It should be illegal for companies to tack on these hidden fees. But they get away with it because everyone just pays the fee and probably doesn't even notice it. You can only find it (in this case) if you dig deep into the transaction ledger of your account.
So I decided not even to cash the check when I heard about this outrageous fee. Problem is, they decided to deduct the money from my account, even though I didn't cash the check. Three months later, I finally got the money credited back (but not the investment gains I lost) and I'm still down the $85 admin fee for a check I didn't cash. And then I find out it's illegal for my own company to give me back the $85 because that would be discrimination against people who didn't get their fees refunded.
The name of the company is DailyAccess (http://www.dailyaccess.com). Pass along to anyone considering them as a 401(k) provider that they are a disgrace.
Friday, September 02, 2005
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BrianM
MikeB
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4 comments:
Mike,
keep calling the company and ask to get the $85 fee back. You didn't even get the loan, so thier reason is moot. if the person won't help you, ask for thier supervisor.
although its all relative to how much time you have to keep calling and checking and how badly you need the $85.
I had hidden fees show up on my bank acct. and I bitched and then they credited it back.
This sounds outrageous. Not only is it sleazy, it should be illegal.
Part of the problem is, I'm not supposed to call. I'm supposed to report the issue to our HR administrator so she can call on my behalf. Normally I would do anything possible to get the money back but I need to be sensitive to the fact that the company I work for still needs to work with this company in the future. It is so expensive to change providers, we are basically trapped. I will have to slowly escalate the issue in a friendly manner until I get the money back.
oh well. Just report it. I guess you have to choose your battles. Maybe this is just a lost cause and the best you can do is to warn others.
speaking of hidden fees- I just saw a .05 charge on my bank statement listed as a "fee." its just such an odd amount and just weird.
also, we are in the process of refinancing and manny was on the phone with the guy trying to get all the nickel & dime "fees" knocked off.
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