The big dog on the White House porch has taken another swing at “junk fees.” President Biden has called in Federal Trade Commission (FTC) Chair Lina Khan and  Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra to ramp up his war on junk fees and bring down costs for American consumers. 

Junk fees – those pernicious hidden fees that hotels, airlines, and whoever else can try to sneak into our bills – have been an enemy of the White House since Biden set foot on Pennsylvania Avenue.

It’s been an uphill battle, but this past summer, when the President got Ticketmaster's parent company Live Nation, Airbnb, SeatGeek and others in the entertainment and hospitality industries to agree to remove those fees, he got the steam he needed to move this initiative forward.

The muscle the FTC and CFPB are adding

With the FTC and CFPB now in lockstep with Biden, consumers should start seeing more of the junk fee bad guys caving in on their fee grab. 

The FTC is proposing a rule that would prohibit businesses from charging any fee that’s hidden or misleading and require them to show the full price upfront. The rule would also require companies to disclose upfront whether or not a fee is refundable. 

“This would mean no more surprise resort fees at check out or unexpected service fees to buy a  live event ticket,” the White House said in a statement. “The rule would apply to industries across the economy, including event tickets, hotels and lodging, apartment rentals, car rentals, and more. Under the proposed rule, companies that fail to comply could face monetary penalties and have to provide  refunds to consumers.”

The CFPB has already had some luck in getting banks to stop being so greedy with bounced check and overdraft fees. Nearly 66% of America’s large banks have eliminated those fees entirely, saving consumers nearly $2 billion since 2021.

Now, the the Bureau is taking action to require large banks and credit unions to do away with fees for basic services like checking bank account balances, getting a payoff amount for a loan or getting information needed for applications. 

Not that the government was looking for a fist pump from anyone, but they certainly got a big one from Teresa Murray, U.S. PIRG Education Fund Consumer Watchdog.

“We applaud this effort to stop businesses from padding their profits with gotcha fees. This sneaky practice has gone on way too long. When some businesses don’t disclose all fees upfront, it hurts consumers and hurts companies that are transparent. Hidden fees are just wrong,” Murray told ConsumerAffairs.

“Consumers have been getting nickel and dimed – or dollared and 20 dollared – for years. Officials say that every year, junk fees cost us tens of billions of dollars and tens of millions of hours as we wander through fine print, compare prices and root out mystery fees. We hope those days are ending."

If you see a 'junk fee,' here’s what you do

Until Biden, FTC, and CFPB have completely scorched junk fees from the Earth, consumers may have to push back on junk fees if and when a company tries to sneak one in. Until then, U.S. Pirg offers some simple advice to protect yourself from junk fees:

• Read everything before you pay, sign, initial or agree.

• Don’t sign or agree to anything that you didn’t actually read. If you sign or click that you “read” or “understand” something, you’ve pretty much lost your right to defend that you “didn’t know.”

• If there’s something you don’t understand, ask what the fee is for. PIRG says that getting clarification in writing (or via email) is better than “Well, the person I talked to said…”.

• Don’t be afraid to walk away from the transaction if you don’t like the extra fees.

• Pay by credit card and never by debit card. “Undisclosed fees are easier to dispute with a credit card,” PIRG noted. “Besides, debit cards expose your whole checking account to all kinds of additional problems.” Banks and retailers handle debit vs. credit card transactions in different ways. You may want to read this or speak to your bank to find out what’s involved.

• Note the names of anyone you talk with. Put a note in your calendar or send yourself an email of the day and time of day when you talked with the person. It helps you fight a fee if you can document that you talked with this person on this day and were told this.

• Keep copies of all receipts, agreements, emails and texts. 

If worse comes to worse and you feel like you need to make some noise about an undisclosed or misleading fee, complain to the company and file a complaint with your state attorney general’s office of consumer protection or the FTC. Reporting a scam has just gotten a lot easier, so don’t be shy about letting your voice be heard.