Hostage fees have always been my hot button. They come in many forms --
"permanent removal", "delocation", "termination", etc. The bottom line
is that they are designed to prevent the records owner from removing
the organization's records. They came about, for the most part, when
the industry was particularly competitive and contracts had very little
in the way of teeth to prevent a company from moving its records in
search of a better deal. The intent was to prevent a loss by a vendor
who had paid a customer's out charges from somewhere else, and invested
in a facility for the customer's records. The idea rapidly evolved into
what we now like to call "hostage fees" because they no longer protect
the vendor, but penalize the customer. 

Many vendors will talk about the "cost of acquisition" for a new
customer. Permanent removal fees are designed to recoup that cost if
the customer walks away during the course of the contract. However,
when they can get away with it, that hostage fee applies after the
contract period is over. That's when it becomes a hostage fee to me. I
am not aware of any other industry that has this sort of a charge after
a contract is over. 

As others have noted, people who don't know our industry get suckered
into these all the time. They chase a cheap storage rate (don't get me
started on the definition of a cubic foot) and completely miss the cost
to walk away if the vendor doesn't perform.

There is nothing wrong with paying a retrieval charge and some nominal
administrative costs (pallets, shrinkwrap, and a data entry charge) to
remove your records. But these need to be customary and normal charges
applied during the life of the contract, not just specifically when you
terminate storage.

My rule is that you negotiate the divorce at the time of the marriage
when it comes to records storage vendors. You don't want surprises and
you want to deal with a vendor who wants your business when you start
talking about what happens later on.

Patrick Cunningham, CRM

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