White House, states tackle 'junk fees' that cost consumers

Streaming HUBMarch 8, 2023

WASHINGTON (AP) – The White House brought together state lawmakers, federal officials and others on Wednesday to trade ideas on how to fight “junk fees” that range from hospital visits and airline tickets to student loans. And that drives up the cost of everything, even the concert seats.

In February, President Joe Biden said his administration would work with state and local officials to identify ways to crack down on such fees. A 2018 Government Accountability Office report on event ticket sales found that primary ticket providers charged an average of 27% of the ticket price.

Rohit Chopra, director of the Consumer Financial Protection Bureau, encouraged state lawmakers to use the consumer protection laws already on the books.

“States can ban certain derogatory acts or practices,” Chopra said. “These terms may seem like vague legal concepts, but they are really about ensuring that fair market practice is that prices are upfront and clearly disclosed, but also that consumers have protection from those charges.” have a chance to escape if they really don’t want that service”

The bureau is the country’s financial watchdog agency and was created in 2011 following the Great Recession.

Lael Brainard, who most recently took over the National Economic Council after serving as vice chairman of the Federal Reserve, said the lack of transparency in pricing is bad for businesses and consumers because it allows companies in similar industries to hide fees. encourages to. Makes orders and “races to the bottom” to compete.

“Exorbitant fees hurt companies that want to be good actors and that want to set pricing transparently,” she said.

State lawmakers on the call shared examples of how they led efforts to eliminate specific junk fees.

Democratic State Sen. James Skoufis of New York talks about how he worked on legislation that eliminated junk fees in live entertainment ticketing, banned delivery fees on emailed tickets, and ostensibly profiting from tickets issued free of charge.

“There’s a lot more to be done in this space,” Scofis said.

The administration is attempting to eliminate the additional fees across the federal government.

Biden called on Congress to pass the Junk Fee Protection Act, which would target hidden fees in the entertainment, travel and hospitality industries. Earlier this year, the CFPB proposed a rule to limit credit card late fees, which would reduce the typical late fee for missed payments from about $30 to $8. It can be effective till 2024. The bureau estimates that it would save consumers about $9 billion in late fees annually.

In February, the Federal Communications Commission published a proposed rule that, when finalized, would cap the cost of making calls within the state from people in prisons and jails.

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