An extra $50 to sit with your child on your next flight? Another $40 in facility charges? Hidden fees are getting so out of control that President Joe Biden is calling for governmental action to reign them in.
Americans are tired of being played for suckers, Biden said during his State of the Union address Tuesday night, which touched on a variety of everyday financial concerns.
That includes the so-called junk fees Americans are paying on more and more expenditures, from concert tickets to bank and overdraft fees to airfare. Biden reiterated his support for banning the hidden surcharges.
Junk fees may not matter to the very wealthy, but they matter to most folks in homes like the one I grew up in. They add up to hundreds of dollars a month, Biden said during his speech. They make it harder for you to pay the bills or afford that family trip.
The White House defines junk fees as those that are designed either to confuse or deceive consumers or to take advantage of lock-in or other forms of situational market power. It does not include reasonable add-on fees for additional products or services, like upgrading to a nicer hotel room.
The policy Biden supportscalled the Junk Fee Prevention Actincludes requiring airlines to show customers the full cost of the ticket upfront (rather than tacking on opaque upcharges for seat assignments and baggage), and to refund travelers if a flight is delayed or canceled.
It would also ban airlines from charging families with children to sit together.
Baggage fees are bad enoughairlines cant treat your child like a piece of baggage, he said.
And Taylor Swift and Beyoncé fans will be happy to see that the president also wants to cap service fees on tickets to concerts and sporting events, and require companies to disclose all fees upfront, rather than when customers are checking out. Research cited by the White House finds that consumers often pay most attention to the base price of a good or servicewhen additional fees are added on, consumers end up paying more and have difficulty comparison shopping.
Another target: So-called resort fees levied by hotels. Biden is calling for these fees, which often arent disclosed in the initial cost of a room, to be included in the rate resorts advertise.
Bidens Consumer Financial Protection Bureau (CFPB) has also made it a priority to go after excessive credit card and overdraft fees. As a result, many major banks have changed their policies in recent years.
And the Federal Trade Commission announced in October that it is exploring a rule to crack down on junk fees proliferating throughout the economy, which could include addressing resort fees or event ticket processing fees. The agency is accepting public comments on the fees now.
If the Junk Fee Prevention Act gets any momentum, the bill could help Americans save hundreds to potentially thousands of dollars a year, depending on their budgets. Already, guidance issued by the CFPB to curb surprise overdraft fees is expected to save consumers more than $1 billion annually.
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