Number 1, I want to say, there are many, many offsite storage companies
that do not include these fees and they rely on their excellent service
and in some cases the security of their facilities to capture and
maintain client relationships. PRISM is filled with great companies run
by families who run their business to serve their community. The
problem is not that some vendors offer bad service and a poor overall
product. the problem is that you do not speak up to management, legal
and purchasing to make them aware.
Let us not tar everyone with the same brush to insure that the company
or companies that have created this Hostage Fee concept are disclosed
to everyone. There are a thousand offsite storage companies that will
take a contract without a Hostage Fee. Several records managers have
been fired for signing onerous contracts. Don't be bullied into a bad
deal for your company.
In any other business, in a capitalistic country, the bad vendor goes
out of business and the good vendor grows. But in a consolidating
industry, a bad vendor can obtain market share by buying up
competitors. They then attach a Permanent Removal Fee. IT IS AT THIS
POINT THAT RECORDS MANAGERS NEED TO NOTIFY VENDORS THEY ARE NOT
RENEWING THE CONTRACT. STOP THE FEE BEFORE IT CAN START.
Number 2, I blame records managers. Read the Contract!! If you don't
understand it, ask for plain english translations. Ask them to tell you
what they mean by "A Standard Records Storage Unit". Why pay for the
box storage and the aisle that leads to it???? If you read the
contract then they cannot do this to you.
Who signs a contract of thousands of dollars without having legal
> I've seen termination fees described as such and also as:
> Permanent withdrawal.
> Account closing.
There is a PRISM/ARMA Joint Session coming up this year in San
Francisco. The Listserv and ARMA should each draft a letter calling for
PRISM to call for clear and accurate contracts per their code of ethics.
>> TO OUR CUSTOMERS, WE WILL
>> * Clearly identify the terms of our storage and
>> service agreements and fulfill them in good faith.
While these hostage fees cost corporate America profits, they force
independent records storage companies out of business, or they must
adopt these fees themselves.
Now for HUMOR:
A certain records manager, outraged at this practice, but caught in the
web because their local records storage company was bought up by
another, decided to fight fire with fire. The RM started sending all
new boxes and computer media to an independent company that offered
better service and no hostage fees.
Each day, they requested a pallet of boxes in addition to any they
really needed. Over a period of months all active records under
retention schedule were moved out. The remaining boxes that were still
in storage were ordered shredded and proof of destruction requested and
provided. They then requested an Affidavit of all records in
inventory. They got back a letter stating they could not find any
records in storage. Then legal sent them a cancellation of Contract
prior to the renewal date. No boxes were left to permanently remove. An
attempt to collect on the removal fees was eventually abandoned by the
storage company as they had no leverage.
Imagine this Court Case........
Judge: "Wait, you are trying to bill your client to permanently
remove boxes of records! Right! But you don't have anything to
deliver?? You already delivered the boxes and billed them for delivery,
Lawyer: Yes your honor. But now we want to bill them because it is so
much more work to permanently remove them! Do you see??
Judge: But you already billed them to remove them. You are not doing
any more work? In fact, you are doing no work!
Lawyer: But your honor, we are trying to restrain the client from
seeking better pricing or better service or both! Failing to punish
them for this duplicitous behavior will create an unnecessary burden on
my client to provide security, adequate delivery capabilities, and
competitive service. I beg of you, your honor! Restrain free trade now.
A clever David beats an unaware Goliath every time.
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