Anthem Blue Cross reconsiders fee for credit card payments
Anthem Blue Cross is backing away from its decision to impose a $15 “convenience fee” on credit card payments.
The move had drawn complaints from customers — and the scrutiny of the California attorney general’s office, which looked into whether Anthem may be violating state law after my column on the controversy ran last week.
“Anthem’s convenience fee for payments made through a customer service representative will be waived while the company makes a decision about retaining the option of credit card payments through customer service,” Leslie Porras, an Anthem spokeswoman, said in a statement Monday.
The fee may violate a state law forbidding businesses from charging a higher price for use of a credit card. Discounts for paying by cash or check are permissible, but not higher rates for plastic.
California Civil Code Section 1748.1 states that “no retailer in any sales, service or lease transaction with a consumer may impose a surcharge on a cardholder who elects to use a credit card in lieu of payment by cash, check, or similar means.”
“We’re concerned about this,” said Lynda Gledhill, a spokeswoman for Atty. Gen. Kamala D. Harris. “We are going to monitor the situation and make sure health consumers are protected.”
As I reported last week, Anthem has notified members that it was doing away with automatic credit-card payments as of Aug. 1. Paying with plastic will still be allowed, the company said, but this will require calling a service rep each month and paying the $15 fee.
Porras, the Anthem spokeswoman, maintained that the $15 fee isn’t a surcharge but a fee to cover customer service costs. She noted that Anthem members can pay by check or have payments deducted online from their checking account for no extra charge.
But Anthem notified credit-card customers that after automatic payments stop Aug. 1, they’ll start receiving paper bills in the mail. This will cost them $2 a month.
Anthem has declined to discuss the rationale for doing away with automatic credit-card payments, saying only that “we reviewed our processes and decided to eliminate this payment method.”
Hundreds of Anthem customers sent me emails and commented online about the company’s billing change. Almost all expressed outrage that automatic card payments would end and fees would be imposed just to pay one’s bill.
Dana Hobart, the mayor of Rancho Mirage, said that by pushing people to write checks for their monthly premiums, Anthem increases the chances that some people will miss payments.
“People who have to write checks, including businesspeople who travel and others who vacation, frequently neglect to write checks on time, thus securing for Anthem some form of late fee,” he observed. “That fee is usually inordinately high and is a windfall to the company.”
A surprising number of Anthem members said they suspected the company had more in mind than just padding its pockets.
“I think they’re hoping that people like me forget to pay and then they get to cancel me,” said Roberta Shaffer, 73, of West Los Angeles. “It seems like a very, very devious thing to do.”
Some Anthem customers who have been paying their premiums bimonthly were dismayed to learn that the company will switch all bills to monthly cycles as of Aug. 1.
West Hollywood resident Brian Budin, 56, now pays by check every other month. That means he has to pay $12 a year for receiving paper bills. That fee will double when his bills become monthly.
“The whole second page of my bill is devoted to telling me that there’s a $2 paper-billing fee,” Budin said. “That’s it. It’s like they tack on another page just to try to justify that charge.”
Meanwhile, Anthem is contacting about 30,000 Medicare Supplement members to apologize for mistakenly allowing their Social Security numbers to be visible through the envelope window in a recent mailing.
Anthem’s Porras said the company became aware of the problem in early May and “implemented processes to prevent this error from happening again.”
She said there’s no evidence of fraud resulting from the funky correspondence. But Anthem is nevertheless offering free credit monitoring to anyone involved in the incident.
“Protecting the privacy and security of our members’ and applicants’ personal information is a top priority,” Porras said. “We apologize for this error.”
David Lazarus’ column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5. Send your tips or feedback to email@example.com.