Amid record-high inflation and challenging financial outlook, new doxo report exposes $128B in hidden bill pay costs, driven by overdraft fees, increased credit costs, late fees, and fraud

doxo, the innovative web and mobile bill pay service, today released its latest doxo INSIGHTS statistical report: The Hidden Costs of Bill Pay - 2022. Each year U.S. households spend over $4.6 trillion on household bills, and $3.3 trillion on the 10 most common recurring ones. Staying on top of these bills is the single largest determinant for consumer financial health. The hidden bill pay costs – obscured in identity fraud, late fees, overdraft fees, and detrimental credit impacts – amount to an additional $128 billion annually, averaging $986 per household.

These figures are 6% higher than they were for last year’s Hidden Costs of Bill Pay Report, which showed that the hidden costs of bill pay had an overall market impact of $119 billion, and an average annual cost per household of $925. Moderate increases across the board contributed to this spike, with the biggest increase coming from biller late fees and penalties. While households paid $15 billion because of biller late fees and penalties last year, this year they paid $20 billion.

doxo’s report uncovers the concerns American consumers have about these hidden costs and quantifies the expense for the typical U.S. household.

Breaking Down the $986 Consumers Pay in Hidden Costs Associated with Paying Household Bills:

Analysis of consumer survey and statistical data shows the average U.S. household incurs $986 per year on additional hidden costs associated with bill payment, comprised of:

• $54 in Identity Fraud Costs: The average household out of pocket costs for identity fraud amounts to $7 billion, or $54 per household a year, as compared to a total of $3 billion, or $26 dollars per household, last year. These are just the direct costs, not including the time and expense consumers spend to restore and repair their identity records once compromised.
• $119 in Overdraft Fees: Banks charged consumers over $16 billion in overdraft fees this year, or about $119 per household. This is compared to an average of $97 last year, with bill payments as the primary cause of bank overdrafts.
• $155 in Late Fees: Missing or paying a bill late often incurs late fees, and 32% of households reported incurring one or more late fees. This totaled $20 billion in household expenses, or $155 per household, as compared to a total of $15 billion, or $119 per household last year.
• $658 in Added Costs of Credit: Staying current on bills and debt payments is a primary factor for strengthening credit. doxo’s analysis shows that staying ahead on payments and improving credit score by 35 points can save the average household $658 per year in interest expense. The average U.S. household carries over $96,000 in revolving debt – between mortgages, auto loans, and credit cards, primarily – so boosting credit and qualifying for lower interest rates significantly reduces expenses.

“doxo empowers consumers to achieve their financial goals while spending less time and effort managing their bills,” said Jim Kreyenhagen, doxo’s VP of Marketing and Consumer Services. “Hidden bill pay costs like identity fraud, detrimental credit impacts, late fees and overdraft fees are a major avoidable expense for many consumers. Using a bill pay manager like doxo can help people avoid incurring a per-household cost of $986 a year on average. Additionally, doxo's premium service, doxoPLUS, adds additional benefits to protect consumers from these hidden costs like $1 million dollars in identity theft protection, credit score tracking, and a no late fee and no overdraft fee guarantee.”

High Consumer Concern about Identity Theft and Credit Impacts

Consumers are increasingly concerned about the variety of ways they get stuck with expenses when managing and paying their bills. doxo’s survey of active household bill payers shows:

• 86% are concerned about bill pay impacts on their credit score
• 85% are concerned about having payment account information stolen
• 84% worry about identity theft when managing online accounts
• 71% worry about incurring late fees and penalties
• 59% are anxious about overdrafts to their bank account when paying bills

doxoPLUS Tackles the Hidden Costs of Bill Pay

doxo’s secure, all-in-one bill pay service facilitates secure payment to any biller, with any payment method, on any device – delivering payments from millions of paying users to tens of thousands of billers across the country. doxo users can now upgrade to doxoPLUS and receive five key Bill Pay Protections that directly address the hidden costs of bill pay: Private Pay™ Protection, Identity Theft Protection, Overdraft Protection, Credit Score Protection, and Late Fee Protection. Collectively, these protections reduce the hassle and anxieties of paying bills and improve household financial health.

Read the full doxo INSIGHTS Hidden Costs of Bill Pay Report 2022 here.

About doxo INSIGHTS

doxo INSIGHTS provides direct insight into household financial health and spending activity by leveraging consumer surveys and doxo’s unique aggregate bill pay data set, comprising actual bill payment activity to confirmed household service providers across the country. doxo data brings together the broadest available data set for analyzing actual household bill payment activity, pulling from over 8 million paying consumers across over 97% of U.S. zip codes. doxo’s payment network covers over 120,000 billers in 45 different service categories and enables payments using bank accounts, credit cards or debit cards. This uniquely broad statistical foundation powers doxo INSIGHTS reports – uncovering key trends for household financial health and bill payment behavior.

About doxo

doxo provides simple, secure all-in-one bill payment to any biller, with any payment method, on any device. A doxoPLUS subscription adds free bank payments and five essential financial protections that boost household financial health. Through these services, doxo currently serves over 8 million users who can make payments to over 120,000 local and national businesses, making doxo the largest bill pay directory in the nation. Billers on the network get paid directly, fast and free – and consumers have complete bill pay independence over when and how they pay their bills. doxo investors include Jackson Square Ventures, MDV, Sigma Partners, and Bezos Expeditions. doxo is based in Seattle, WA. For more information visit www.doxo.com.

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