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Subject: Re: Speaking of Hostage Fees........will this come to Court???
From: Christian Garcia <[log in to unmask]>
Reply-To:Records Management Program <[log in to unmask]>
Date:Thu, 9 Oct 2003 18:08:21 -0700

text/plain (202 lines)


I am new to the list, but someone sent me an email from this list two years
ago when we were doing an outsourcing study of our corporate records center
that mentioned withdrawal fees. This made me look at our proposal closer
and I am sure glad we did. In it, there was a small line labeled as a
"Permanent Withdrawal" fee, and if we ever wanted to take our boxes out of
this company's facility (they shall remain nameless for legal purposes),
the charge per box to remove would equate to $4.75/box. We keep an average
monthly inventory of about 105,000 boxes; that would have been a charge of
$498,000 plus applicable labor charges if we ever became dissatisfied with
their service. This was non-negotiaable, but deemed not necessary to
negotiate over since they were assuring us that we would never be unhappy
with their service and they would do anything to rectify any problems.

Needless to say, we still own and operate our own corporate records center.

Thanks for all the good insights everyone is sharing. I'm still new at this
RM area, but am learning a lot by reading all your comments.

Christian Garcia
Southern California Edison
Business Resources Supervisor
Drawing/Document Management and Corporate Records Center

                      Sherri Taylor
                      <STaylor@AARCHIVE        To:       [log in to unmask]
                      S.COM>                   cc:
                      Sent by: Records         Subject:  Re: Speaking of Hostage Fees........will this come to Court???
                      <[log in to unmask]

                      10/09/2003 01:21
                      Please respond to

Yes, Margie they can be.  I have also seen these "permanent withdrawal"
combined with an additional "account closure" fee.

Sherri Taylor

----- Original Message -----
From: "Van Derworp, Margie" <[log in to unmask]>
To: <[log in to unmask]>
Sent: Thursday, October 09, 2003 3:01 PM
Subject: Re: Speaking of Hostage Fees........will this come to Court???

> Are the "hostage/termination fees" also known as "permanent withdrawal
> fees" in these contracts?
> Should we as the consumer expect to pay labor cost to remove the cartons
> from the shelves?  And the termination fees far exceed the cost of
> labor?
> Margie Van Derworp
> Corporate Records Manager
> Washington Mutual
> [log in to unmask]
> 209.460.2537  direct
> 209.460.2550  fax
> -----Original Message-----
> From: Roger Blais [mailto:[log in to unmask]]
> Sent: Thursday, October 09, 2003 12:48 PM
> To: [log in to unmask]
> Subject: Re: Speaking of Hostage Fees........will this come to Court???
> Hi Ivo,
> Some interesting reading this subject.
> UBMDR encountered "hostage fees" when it asked Iron Mountain to
> terminate
> the contract for the storage of 70 boxes in Vancouver,  so they are
> waiting
> for the end of the contract to move their boxes here but will still have
> to
> pay a termination fee.
> The agreement with Boyd's states that there are no such fees. Schedule
> B,
> 2, e.
> Roger
> Hugh Smith <[log in to unmask]>@[log in to unmask]> on 2003-10-09 11:38:53 AM
> Please respond to Records Management Program <[log in to unmask]>
> Sent by:    Records Management Program <[log in to unmask]>
> To:    [log in to unmask]
> cc:
> Subject:    Speaking of Hostage Fees........will this come to Court???
> Here is your justification to write a memo to the CEO or CFO!!  This is
> exactly what we have been talking about as to why the educated RM needs
> to be involved in all decisions with regard to records both paper and
> media.   I will buy you a steak dinner in Boston if you write a report
> to management about why you need to be in the loop on media storage and
> you get a favorable response back.
> Apparently, we are not the only ones discussing Hostage Fees.  Will
> this go to court or will someone blink??
> >
> We talked about how renewals and automatic renewals can hurt you, well
> here is an example to show the CEO on why media needs to be controlled
> by the records manager so that IT is not hurt in the same way that
> paper was hurt by Hostage Fees.
> Hostage Fees stifle innovation. Why improve your facility to compete if
> people cannot ever get their records out?  New competition is stifled
> in that new paper storage companies decide to just open for media only
> because paper is held hostage.
> But if the records manager presents a "White paper" to management about
> avoid this trap with media, then your media will be able to go to the
> best service provider, the best security provider and pricing remains
> competitive.
> Hostage Fees are Restraint of Trade. No justification exists as Patrick
> pointed out!
> A disturbing trend is that companies who have huge Hostage Fees will go
> into a market and rather than buy out people or compete fairly, they
> offer a free year of storage. A FREE YEAR of Storage. Then a year
> later, with their hostage fee insuring the company cannot leave, the
> prices rise.
> What are the effects:
> 1) We prove how stupid some Purchasing Agents are! ( Read a Contract
> for goodness sake!)
> 2) The local company loses business and then realizes that they need to
> put Hostage Fees in their Contract.
> 3) Due to Hostage Fees,  quality, security or service need not be
> addressed. Everyone ends up in concrete boots.
> 4) Hostage Fees become legitimized and claims that everyone is doing it
> start to be put forth.
> 5) In a time where terrorism and Sarbanes Oxley place corporations at
> great risk, the implementation of enhanced security to meet demands of
> the client diminished by the clients ability to act like any other
> customer. You cannot move from a vendor not satisfying your needs to
> another who will.
> Where is ARMA's new contract that has language to protect the rights of
> the client. This contract would  insure that movement away from sloppy
> or insecure storage to higher quality or better service can occur.
> In the meantime, how about telling your Purchasing Agent about this
> trick of the one year free with a hostage fee? You might save your
> company a lawsuit or at least the embarrassment of being held hostage.
> Hugh Smith
> FIRELOCK Fireproof Modular Vaults
> hsmith @[log in to unmask]
> (610)  756-4440    Fax (610)  756-4134
> List archives at
>  Contact [log in to unmask] for assistance
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