Business Maverick

Business Maverick

Biden is going after ‘junk fees.’ Here’s what that means

Biden is going after ‘junk fees.’ Here’s what that means
US President Joe Biden speaks during a cabinet meeting at the White House in Washington, DC, USA, 2 October 2023, as US Secretary of State Antony Blinken (L) looks on. (Photo: EPA-EFE/Ting Shen / POOL)

President Joe Biden is expanding his crackdown on so-called “junk fees”, or charges that raise the prices of items like concert tickets, hotel rooms and internet service.

Biden on Wednesday will announce new steps, including  a proposed Federal Trade Commission rule that would require businesses to disclose all charges for goods and services upfront. The proposal would apply to a wide range of industries subject to FTC oversight, including event ticketing, hotels and apartments or car rentals. Companies that do not comply would face monetary penalties and have to provide refunds.

These fees have long been a target for Biden. In his most recent State of the Union address, Biden touted his administration’s efforts to crack down on the charges as an appeal to voters. 

Read More: Biden to Expand ‘Junk Fee’ Crackdown With Proposed FTC Rule

“Junk fees may not matter to the very wealthy, but they matter to most folks in homes like the one I grew up in,” Biden said. “They add up to hundreds of dollars a month.”

These are major examples of the practice the administration is targeting:

Entertainment fees

These are the service charges, processing fees, delivery fees and facility fees that online ticket sellers charge, which often add significant expense to the cost to attend events. After the public outcry over the botched sale of Taylor Swift concert tickets, websites Ticketmaster and SeatGeek launched initiatives that would make it easier for consumers to see costs upfront when they buy tickets for events.

Airline fees

Four airlines guarantee free family seating: Alaska, American, Frontier and JetBlue. To bring transparency to families faced with unexpected fees to sit with their children, the Transportation Department published a dashboard of the charges and is working to ban them. 

Termination fees

Charges for ending mobile phone, wireless or cable TV services undermine competition in the market, Biden has said. His administration called for the Federal Communications Commission to limit these fees in 2021.

Resort fees

The Biden administration wants hotels to include the surprise fees they charge for being resorts in the room rates so vacationers can budget more accurately. 

Financial fees

Some of the nation’s larger financial institutions, such as Capital One and Citigroup, have moved to eliminate overdraft fees on checking accounts, which cost consumers billions of dollars a year. In a related move, in July the top US consumer watchdog said it will closely monitor whether credit-card issuers follow through on their marketing promises of sign-up bonuses and other perks.

The Consumer Financial Protection Bureau is issuing an advisory that will crack down further on banking fees. It will say consumers are entitled to get basic information from large banks about their own accounts, including balances or the remaining payoff amounts on loans, without having to pay fees.

Gallery

Comments - Please in order to comment.

Please peer review 3 community comments before your comment can be posted