Undisclosed, deceptive cost consumers billions
Like any normal consumer, I click
first on the lowest price. When I did that recently, I got an offer for $135.98
for a three-month supply. Pricey, but tolerable.
I went through the tedium of
entering my prescription, eye doctor’s name, credit card number, and address.
And that’s when I finally got to the actual price: $262.41 — a whopping 93
percent more than the original offer.
Boy, did I feel like a sucker. And
I’m guessing you can relate.
These kinds of undisclosed, surprise
charges are a classic example of the “junk fees” that are now everywhere,
deceiving consumers into paying more for banking and internet services,
concerts and movies, rental cars and apartments, and more.
A Consumer Reports survey found
that 85 percent of Americans have experienced such fees
in the past two years. The cost of all this swindling? Tens of billions of dollars a year. Junk fees also
make it hard for businesses that are honest and transparent about their costs
to compete against the cheaters.
President Joe Biden is determined to
put junk fees where they belong — in the trash.
He recently announced that the Federal Trade Commission plans to force companies to disclose the total price of goods and services up front. Violators would face big fines and have to refund consumers.
This is a big deal. Of course, fans
of consumer deception in the banking, travel, and auto industries could file
lawsuits to try to block the plan. But if the Commission prevails, it will mean
no hidden fees — and more money in ordinary Americans’ pockets.
This new plan builds on the
administration’s progress to date in reducing junk fees in certain industries,
particularly financial services.
The Consumer Financial Protection
Bureau has reduced banking junk fees, like overdraft charges, by $5.5 billion annually. They’ve also
extracted $140 million in consumer refunds from companies
that charged illegal junk fees for things like fake paper bank account
statements or worthless add-on products for auto loans.
The Bureau is now working to
eliminate fees on basic information services, like providing account balances,
and making it easier for consumers to switch banks.
I first heard about President
Biden’s contempt for junk fees when I watched his State of the Union address this year. When he
lashed out about surprise resort fees at “hotels that aren’t even resorts,” it
really resonated.
My husband and I had spent a weekend
at a crowded Miami rental on a busy street, several blocks from the beach. We’d
picked that hotel for our budget vacation because their advertised rate seemed
like a decent deal. That was before we found out about the $36 per night
“resort fee.”
Nobody likes to be taken for a sucker. But for too long, businesses have been able to get away with using junk fees to profit off deception, making suckers of us. The administration’s crackdown will help turn the tables, giving a leg up to honest businesses and hard-working consumers.
Sarah
Anderson directs the Global Economy Project and co-edits
Inequality.org at the Institute for Policy Studies. This op-ed was distributed
by OtherWords.org.