You wouldn’t know it if you were a casual consumer of news, but the Biden/Harris administration has gotten a lot of stuff done despite not being able to pass crucial legislation like codifying Roe and reforming voting rights. #AbolishTheFilibuster. They’re not perfect, but things that the administration has accomplished over the past three years include vaccinating the majority of non-brainwashed Americans against Covid-19, lowering the price of insulin, allowing Medicare to negotiate some prescription drug prices, the CHIPS Act, the Infrastructure Law, and the Inflation Reduction Act. Secretary Pete has also been working on making our flying experience better, albeit to mixed results.
On Wednesday, the Biden administration proposed something they’ve been promising for a while now. The Federal Trade Commission has proposed a rule that would ban all things considered to be “hidden and bogus fees” that fall to consumers. In the same spirit of transparency that’s required for airlines, this rule would make it clearer for consumers when extra fees are being charged, the most glaring examples being hotels and live-ticket events. (F you, Ticketmaster!) It would also bar businesses from applying these BS fees to consumers and prohibit a business from advertising prices without mentioning the mandatory fees that inflate the actual cost. For example, U-Haul can’t advertise their price being “Only $19.99 in town!!” without mentioning, “Only $19.99 in town, plus a $100 fee just because!”
The Federal Trade Commission rolled out a proposed rule Wednesday that would ban what it calls hidden and bogus fees that can cost consumers an extra $80 billion every year, officials said.
“This is real money. It really adds up for people,” FTC Chair Lina Khan said in an interview that aired Wednesday on NBC’s “TODAY” show. The proposed rule would make it clearer when extra fees are being charged, like at hotels and at live-ticket events, the agency says. It would bar businesses from using hidden fees, or charges that the FTC calls “bogus fees” and which are misrepresentations, the commission said in a statement.
It would also prohibit businesses from advertising prices that leave out mandatory fees, a practice that causes consumers to expect to pay one price, only to see the actual cost soar, according to the FTC. It wouldn’t stop a company selling tickets to a concert from adding fees, and it wouldn’t limit what they can charge.
“What the rule says is that if there’s going to be a fee, a mandatory fee, it needs to be part of the total price that consumers see up front,” a senior administration official said in a briefing. Hidden fees are an issue that Robert Kraus, a frequent traveler who organizes conventions, knows all too well — things like getting charged $3 for a glass of water he didn’t ask for, and the price of which is not on the menu, and other extra fees, like resort fees.
“Sometimes they call it a convenience fee,” Kraus said. “Because it’s convenient for me and you to pay 20, 30, 40 dollars a night so that they can make more money and not be honest and upfront.”
President Joe Biden at his State of the Union address in February mentioned junk fees, which he described as “those hidden surcharges too many companies use to make you pay more.”
“They add up to hundreds of dollars a month. They make it harder for you to pay your bills or afford that family trip,” Biden said. His administration has proposed a bill that would ban surprise hotel resort fees, he said. It was introduced in the Senate in March. In June, Biden said ticket sales giants Ticketmaster and Live Nation have pledged to provide consumers with full pricing upfront. The proposed FTC rule will next be published in the Federal Register, and then people can comment for 60 days.
The FTC could force violators to provide refunds, and it could seek monetary penalties against companies. Other agencies are also taking action, officials said. The Consumer Financial Protection Bureau is issuing guidance to enforce rules to prevent banks from charging fees for basic services, like balance requests or other information, it said.
The bureau also plans later this month to propose a rule that it says would make it easier to shop around with banks and to switch accounts, for example to find a better interest rate, officials said.
Things really have gotten so expensive nowadays and it’s frustrating. For the smaller business, I completely understand that they are at the mercy of the bigger ones above them. You know, the bigger companies that they get their supplies from at a higher rate than ever before because it’s all about those profit margins for the executives and stockholders, baby. I like this rule, but I am skeptical that just like the airlines did, bigger businesses will still find a way around them. If they all agree to have these extra fees, then what does it matter to them if they disclose ’em? You’re still paying the same price, you just know what you’re paying for and don’t have another option to pay less. I guess it does help to realistically budget what you’re actually going to spend.
The other day, my friend Tweeted, “I wish people would stop confusing inflation with capitalism,” and I can’t stop thinking about that. I’ve been trying to put those thoughts into words for a little while now, and she expressed it so eloquently and succinctly. I really hope this ends up being a solution that actually helps make things more affordable and discourages companies from charging these junk fees.
air bnb fees have gotten ridiculous. you can find a place for $100 a night and 2 nights somehow comes out to be $500… not doing it, I’ll just get a hotel.
— india. (@IndiaDionna) February 19, 2021
Absolutely nuts that @Ticketmaster get's away with these kind of fees pic.twitter.com/sr4KKwYFkX
— Bret Little 🇺🇦 (@little_bret) October 12, 2023
Junk fees can add up to hundreds of dollars for working families.
President Biden continues to call on Congress to pass the Junk Fee Prevention Act to stop unfair charges by hotels, airlines, cable and internet companies, and online ticket sellers.
— The White House (@WhiteHouse) October 9, 2023
The entire Biden administration is working to eliminate junk fees across the board & protect families from unfair charges.
Visit https://t.co/1QkmVqmAaB to see how USDOT is strengthening passengers’ rights and improving airlines’ customers service. https://t.co/WD1uPmgMog
— Secretary Pete Buttigieg (@SecretaryPete) October 11, 2023
As Rosie said, especially when there is NO OTHER OPTION. Are we able to go to a Ticketmaster booth and pay in cash to avoid an online processing fee? What IS an online processing fee? Is the computer charging for its time? Infuriating!
I remember a time when I could go to TicketMasters IN MY FAVORITE RECORD STORE…and PICK my seat & pay right there…just had to pay a processing fee for printed tickets…AWW GOOD TIMES❤️
And camping out overnight to get them before they sold out.
And to quote Clark Howard, it’s customer no-service. Since it’s all automated, why is there a service fee and processing fee, and a service fee for each ticket?!
Well, that’s the thing. I’m not really a satisfied customer now that I know why the total bill is what it is. If I don’t have a choice in declining the resort fee, for example, knowing about it ahead of time doesn’t help.
Internet and cell phone plans still have so many extras it seems, too. The $99 plan always ends up being $150 when it’s said and done.
Right? I like to think I’m a savvy consumer, reading all the fine print, but it’s still a shock sometimes when I get the first bill for something; it’s like wait a minute, I thought I signed up for the $49.99 plan, & then I see all those fees tacked on below & argghhh!! It’s so aggravating!
More transparency is always good, because its frustrating to see “tickets as low as 19.99” and then you realize its 19.99 plus XYZ fees so actually each ticket is 45 dollars.
But, if I have to pay those fees anyway, the transparency is only so helpful. The issue for me is more the fees themselves, not just the lack of disclosure. And the more companies add on fees, the more we just accept it as the cost of doing business. Remember when most airlines didnt charge baggage fees? And then oil prices soared so they added baggage fees and we were told they would go away when the oil prices dropped.
And now we’re all just like “so if I bring this purse the size of a business envelope it costs 25 dollars? Sounds about right.”
I think knowing the full cost upfront will have the effect of less people deciding to buy the [whatever] which will hopefully have the effect of companies lowering fees. There has to be some studied phenomenon showing that when people have already decided to buy something they are more likely to agree to the extra fees to finish the transaction, whereas if they are presented the total cost upfront that will prevent some people from making the decision to buy it in the first place.
Especially something like tickets where you’ve spent maybe 10-15 minutes or longer finding the event, searching for seats, entering all your cc info only to be presented with these extra fees on the third screen. It makes you mad but at that point you’ve already spent the time and effort of finding your seats and you just want to get it over with. If it’s on the first screen before you even pick seats – oh each seat costs $75 – well then you can quickly add up the total and decide if that’s too much and make an educated decision before wasting any more time.
That’s a good point. If people know that something costs X, maybe they’d think twice before even considering it. I know I often think “well its just an extra 5 dollars” but then there’s another fee and another fee and then at the end i’m like JUST TAKE MY MONEY AND LET ME HAVE THIS. But if I know upfront its going to be X amount, I might not even bother. Especially with something like airline tickets or concert/theater tickets.
This.
Literally went through this process the other day trying to book a room in Boston. Great prices UNTIL you added on the taxes for the room in addition to the resort/urban fee and then the TAX on the fee. So that room on hotwire for $275 a night turned into $1400 with taxes plus an additional 105 at the hotel for their fee (which doesn’t include the taxes.) It’s egregious and I’m tired of feeling like we’re being squeezed all to make sure the 1% and business keep their coins.
That was my reaction when I went to book an Air BnB in Maine. The housekeeping fee alone was almost as much as the room, before all the other stuff was added on. I’d rather just stay at a hotel at this point, fewer random rules, don’t have to find a gym, and I don’t have to change/wash the linens (yet).
Also, Airbnb treats us like unsalaried maids. we just got a terrible review for forgetting to wash a single plate, not being able to mop up around the indoor pool completely, and misunderstanding when the garbage cans needed to be put out in the road a block away. We did try, despite the fact that we were traveling with 2 toddlers. Mice in the bathroom didn’t help. Nor the owner texting and calling several times a day. She even drove up to talk to us several times
Airbnb would not remove the review so I had to pull my profile, with its 10 years of good reviews. On top of everything, the place came with an expensive service fee.
Yes, I know you can post a counter review, but there is a time limit and the owner timed her surprise slam perfectly and we weren’t allowed to reply.
Exactly, it’s less about inflation than it is capitalism. Funny how so often you hear companies “had” to raise prices due to inflation coincides with xxx company made record profits. I mean, we aren’t stupid, profits are a pretty simple calculation of income less expenses. But at this point we all seem to be immune and accepting that it’s all about keeping the stockholders and 1% happy.
Small, but relevant example. I work PT for a very well known niche national retailer, company is doing VERY well. They will not invest in the enterprise version of Office (stores rely on the free version) or the payroll app module that lets you see the weekly schedule online, we rely on a text from whoever is working when posted. BUT, the CEO and board did get another corporate jet to fly around on so, you know, priorities.
Alllll of this. Regulating these giant corps, busting up these monopolies…there needs to be tangible action to thwart the incessant corporate greed. This is definitely a small but crucial step in the right direction. F*ck late stage capitalism.
Would this affect Doordash as well? Their “service fee” on top of everything else is ridiculous.
Oh, my first thought went to DoorDash! The extra fees, particularly in California, were wild! I decided I could drive my lazy self down to the restaurant to pick up the takeout after all.
Heh–it’s most entertaining to see several restaurant chains starting to do their own delivery. Doordash overplayed their hand with high fees.
You can’t opt out of the fees, what we are actually paying for isn’t clear, and 90% of the time there is no choice to go somewhere else.
My favorite is when fees show up on your credit card or checking account and it takes ‘7-10 business days’ to resolve.
Great, so the next step: remove tipping. Tipping is an idiotic custom. People deserve a good, living salary. Enough with the CEOs and their second, third jets and yachts.
Tipping depends on the establishment. My boyfriend was a server at a high end steakhouse and walking out the door with $600+ in tips a night was common. He’d never work that job for a higher hourly wage but no tips because it would be a huge pay cut. Being asked if I want to tip at Panera and places like that are annoying though.
Then the steakhouse should price itself so that they can pay the servers that same amount, if they want to keep their staff. It’s the employer’s duty to pay the workers, not the customers’.
The tipping system is abusive at the low end.