In a significant move, the Biden Administration is gearing up to implement measures aimed at putting an end to what are commonly known as “junk fees,” hidden costs that follow consumer transactions, prevalent in areas such as airline fees and hotel resort fees.
Collaborating closely with the Federal Trade Commission (FTC) and Consumer Financial Protection Bureau, the White House is actively working on establishing rules to address this issue, which has been a financial burden on American consumers, costing them billions annually.
President Biden’s firm stance on potential legislation has already prompted several companies, including certain hotel groups and online travel platforms, to re-evaluate and amend their pricing models.
Expanding the scope of their initiative, the administration is also turning its attention to concert and sports event ticketing providers. The move is driven by the belief that hidden fees imposed post-purchase hinder consumers’ ability to make informed choices and compare prices effectively.
According to a White House press release, such fees not only disadvantage consumers but also have broader negative impacts, unfairly affecting honest businesses, hindering innovation, and disproportionately impacting small enterprises.
The Federal Trade Commission has proposed a rule requiring companies to transparently disclose the complete cost upfront before payment, applicable across various sectors such as event tickets, hotels, and rentals. Violations of this rule could result in substantial penalties and mandatory refunds to customers.
Simultaneously, the Consumer Financial Protection Bureau is working on a parallel initiative, proposing a similar rule tailored for banks and financial institutions. These combined efforts underscore the administration’s commitment to fostering transparency and fairness in consumer transactions across diverse industries.