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Biden proposes a ban on 'junk fees' — from concert tickets to hotel rooms

President Joe Biden delivers remarks on hidden junk fees during an event in the Rose Garden of the White House, Wednesday, Oct. 11, 2023, in Washington.
Evan Vucci
/
AP
President Joe Biden delivers remarks on hidden junk fees during an event in the Rose Garden of the White House, Wednesday, Oct. 11, 2023, in Washington.

Many consumers are no strangers to added and surprise fees, from buying airline tickets to renting a car or ordering takeout.

These pesky charges are the target of new actions announced Wednesday by the Biden administration, which hopes to stamp out so-called "junk fees" and make it easier for buyers to know what they're paying and why.

"Folks are ... tired of being taken advantage of, and being played for suckers," Biden said in remarks at the White House.

"These junk fees may not matter to the wealthy," he added, "but they sure matter to working folks in homes like the one I grew up in."

One sweeping measure announced Wednesday is a rule proposed by the Federal Trade Commission that would block companies throughout the economy from charging hidden and "bogus" fees, forcing sellers to disclose all mandatory costs up front.

The FTC could charge companies financial penalties for violating the rule, which backers say would allow consumers to compare prices more easily and level the playing field for businesses that display their total costs in advance.

The Consumer Financial Protection Bureau is also ordering banks and credit unions to provide customers with basic information — such as their account balances — without charging fees.

Later this month, the CFPB will propose a separate rule that would force financial institutions to allow customers to easily share their information with other banks if they want to switch, the White House added.

Neil Bradley, executive vice president of the U.S. Chamber of Commerce, said in a statement that the Biden administration's crackdown on "junk fees" would harm consumers.

"Every minute of every day, Americans engage in close to 400,000 transactions, buying and selling goods and services," Bradley said. "It is baffling that the administration believes it is going to help consumers by regulating how businesses price all of those transactions."

But consumer advocates applauded the administration's actions on the fees, which officials estimate cost buyers more than $64 billion each year.

"It is clear that Americans across party lines are tired of being scammed and forced into paying worthless junk fees," Erin Witte, director of consumer protection at the Consumer Federation of America, said in a statement. Witte added that "junk fees" disproportionately affect low-income consumers and communities of color.

Chip Rogers, president and CEO of the American Hotel & Lodging Association, said in a statement that the organization would review the FTC rule but that it "supports creating a single standard for mandatory fee display across the lodging industry – from short-term rental platforms, where fees are most prevalent, to online travel agencies, metasearch sites, and hotels."

Earlier this year, Biden used part of his State of the Union speech to urge lawmakers to pass the Junk Fees Prevention Act, proposed legislation that would limit the excessive fees charged by companies.

Copyright 2023 NPR. To see more, visit https://www.npr.org.

Joe Hernandez
[Copyright 2024 NPR]
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