Can Washington Crack Down on ‘Junk Fees?’
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Here's your Money Briefing for Thursday, February 16th. I'm J.R. Whalen for The Wall Street Journal. If there's anything that frustrates consumers besides rising prices, it's fees, sometimes hidden fees, that companies slap onto the total cost.
What are 'junk fees' and which charges does President Biden mean?
So a lot of times these are surcharges tacked on to concert tickets, cable bills, banking services, hotel bookings. Many of these fees do not get you anything in return.
That's Wall Street Journal reporter Alison Pohle. She's been looking into calls by President Biden for companies to rein in what he calls junk fees. We'll talk to her about how that would affect consumers after the break.
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In last week's State of the Union speech, President Biden said Americans are tired of paying fees.
I know how unfair it feels when a company overcharges you and gets away with it. Not anymore. We've written a bill to stop it all. It's called the Junk Fee Prevention Act. We're going to ban surprise resort fees that hotels charge on your bill. Those fees can cost you up to $90 a night at hotels that aren't even resorts.
But what can the White House actually do about these fees? And how would regulation affect you, the consumer? Wall Street Journal reporter Alison Pohle looked into that, and she's here to discuss. Hey, Alison, thanks so much for being with us.
Thanks for having me.
So, Alison, when President Biden talks about junk fees, what is he specifically referring to?
There are a lot of different charges that fall into this category, but generally you can think of them as fees that don't get you anything in return or that you would expect to be included in the price of an item. So a lot of times these are surcharges tacked on to concert tickets, cable bills, banking services, hotel bookings. And unlike the upcharge for a first class plane ticket or something like extra guacamole, many of these fees do not get you anything in return.
No, don't mess with my guacamole. Now, you also mentioned plane tickets. And between baggage fees and fees for picking out your own seat, there might not be fees that infuriate consumers more. How would regulating those fees affect consumers?
First, they're going to need to stay patient because the government needs to define exactly what a junk fee is. So whether or not a baggage fee is exactly a junk fee is up for debate because the airlines will argue that it is getting you something in return. It's getting you your baggage checked, whereas other people might say, well, shouldn't that be included in the cost of my plane ticket? but the president wants to target additional fees that airlines charge for seating assignments and the government is especially worried about families having to pay these seat fees so that they can sit with their children so if these are regulated it's possible that those fees could go away though it's a long shot or another option is that they'd be displayed more transparently
Now, Biden also specifically mentioned resort fees.
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