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It's not just Ticketmaster: Congress must fight junk fees in all industries that harm consumers [1]
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Date: 2023-02-07
Americans are losing billions of dollars to hidden "junk fees" and penalties that creep into everyday retail services across industries including entertainment, utility, and travel. Here are some more common examples: airlines will advertise a low-price flight that doesn't include baggage, cancellation, and family seating fees that drastically increase the cost; hospitals surprise patients with bills from out-of-network doctors at in-network hospitals; or cable companies will misrepresent costly, unnecessary packages as required.
President Biden's proposed Junk Fee Prevention Act would target excessive fees on things like online concerts, sporting events, airline tickets, hidden hotel fees, and termination fees for TV, phone, and internet services.
Of course, not all additional fees are junk fees. The cost of upgrading from an economy seat to a business class seat on a flight, for example, would not be considered a junk fee. The Biden administration is taking aim at four specific categories of fees "designed either to confuse or deceive consumers or to take advantage of lock-in or other forms of situational market power," including:
Mandatory fees that often hide the full price, a practice that can lead consumers to pay more than they would otherwise, and it also makes it hard for consumers to comparison shop.
Surprise fees that consumers learn about after purchase, which make it hard to stay within budget and can burden household finances.
Exploitative or predatory fees that target consumers who are locked into a product or service, or are otherwise economically vulnerable, imposing a financial burden.
Fraudulent fees that involve outright fraud or misrepresentations on the part of the seller.
The Biden administration’s efforts to alleviate the burden of corporate greed on consumers has been ongoing. During a September 2022 meeting of the White House Competition Council, President Biden called on federal agencies to reduce or eliminate junk fees in everything from banking services to cable and internet bills to travel and entertainment.
We're already seeing results from his call to action. For example, if your bank is like mine, i.e. predatory, you may be getting repeated notices about how they are eliminating fees or adding longer grace periods for overdue accounts. While banks would have us believe they took these steps out of generosity, in reality the Consumer Financial Protection Bureau (CFPB) targeted overdraft and bounced check fees, and ramped up oversight. The Biden administration reports that these efforts saved Americans more than $1 billion annually.
The administration has also taken aim at increasing transparency in airline travel, and released new rules requiring internet providers to display easy-to-understand labels to allow consumers to comparison shop for broadband services. The new proposed focus on “junk fees” will help millions of Americans find fast relief from costly charges that pile up and obstruct any meaningful efforts to reach economic relief.
We all know that House Speaker Kevin McCarthy is a disaster who has no real ability to lead his caucus. However, as we saw with the Ticketmaster hearings in the Senate, Republicans are on board to redirect attention toward something Americans hate more than them: predatory consumer practices. While we may not get everything—corporations are already taking aim at Biden's attempts to rein them in, so we're in for a battle—there is no reason to completely give up hope on enacting some form of consumer protection when it comes to junk fees.
RELATED STORY: Senators use Taylor Swift lyrics to slam Ticketmaster executives for ticket-buying fiasco
Join President Biden in calling on Congress to pass the Junk Fee Protection Act, which would target hidden fees in the entertainment, travel, and hospitality industries. Click this link to send a letter today.
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