Staying Fit
In this story
Fee-for-all • FTC proposal • Junk fees accumulate • Agencies seek transparency • Consumers balk • A new era • Service fees defended • Ways to fight
Exorbitant fees that come out of the blue are practically everywhere. Call it a fee-for-all.
- Your hotel bill includes a surprise “resort” or “destination” fee. Never mind that you didn’t use the gym, swimming pool or Wi-Fi, or partake in city tours or other amenities.
- That sweet budget airfare you booked online doesn’t look as enticing after fees for privileges that were once gratis are piled on, such as selecting a seat or placing a carry-on in the overhead bin.
- Tickets to a hot concert, show or sporting event that you vied for online don’t disclose the hefty handling charge on top of the tickets’ face value. The vendor has exclusive rights to sell access to the event, so you must pay the fee or stay home.
These and other maddening charges, collectively known as junk fees, exasperate Americans of all ages. Older adults on fixed incomes may feel the financial strain even more.
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The Biden administration has declared war on junk fees. And on May 23, the federal Justice Department and 30 state attorneys general sued Ticketmaster-Live Nation alleging monopolistic abuse.
“Through its Ticketmaster subsidiary, Live Nation controls primary ticketing at hundreds of ... venues across the country,” Assistant U.S. Attorney General Jonathan Kanter said in prepared remarks. “It is through these exclusive ticketing arrangements that Americans face the dreaded Ticketmaster tax: the seemingly endless set of fees ironically named ‘service fee’ or ‘convenience fee’ when they are anything but.”
FTC proposes rule in October to ban junk fees
In October, the Federal Trade Commission proposed a rule that would ban hidden fees and make it mandatory for businesses to disclose the “all in” pricing for hotel stays, concerts and other events.
“All too often, Americans are plagued with unexpected and unnecessary fees they can’t escape. These junk fees now cost Americans tens of billions of dollars per year — money that corporations are extracting from working families just because they can,” FTC Chairwoman Lina M. Khan said in a statement. “By hiding the total price, these junk fees make it harder for consumers to shop for the best products or service and punish businesses who are honest up-front.”
Not all fees are illegitimate. Charges may cover staffing and the cost of doing business, and companies have a right to make a profit.
But some businesses are more transparent about disclosing fees to consumers ahead of time, rather than burying them in the fine print of advertisements or contracts.
What you’re paying for — or not — can get squishy.
Junk fee problems targeted
A year before, the Biden administration asked federal agencies to find ways to reduce or eliminate hidden fees, charges and add-ons for everything from banking services and cable and internet bills to airline and concert tickets.
“It’s beyond frustrating to end up spending more than you budgeted because of random, arbitrary fees,” Khan said in an earlier statement. “No one has ever felt that a ‘convenience fee’ was convenient. Companies should compete to provide the best quality at the best price, not to see who can squeeze the most added expenses out of consumers.”
Along the way, the FTC solicited comments from the public “on the harms caused by junk fees and the unfair or deceptive tactics companies use to impose them.” Some of those fees it considers fraudulent include auto dealerships’ “nitrogen-filled” tires that have no more nitrogen than normal air.
The agency also wants to improve the public’s access to funeral prices posted online. In January, the FTC sent warning letters to 39 nationwide funeral homes after investigators discovered “several violations” of the Funeral Rule following an undercover phone sweep.
An FTC document explains the rule: "The Funeral Rule requires [funeral providers] to give consumers accurate, itemized pricing information, and various other disclosures about funeral goods and services." On 38 calls, investigators said the funeral homes either refused to answer pricing questions or provided inconsistent answers.
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