Nearly 90% of respondents to a 2024 Navigator Research survey conducted among voters in 61 competitive congressional districts for the general election said they wanted Congress to enact legislation restricting or outlawing these fees. (Photo : by Anna Moneymaker/Getty Images)
You've probably encountered several extra fees, whether buying concert tickets, checking out of a hotel, or canceling your gym or TV subscription.
These are unforeseen and occasionally concealed charges that businesses charge for a service that consumers barely or never pay for. They are enormously unpopular among American consumers.
Nearly 90% of respondents to a 2024 Navigator Research survey conducted among voters in 61 competitive congressional districts for the general election said they wanted Congress to enact legislation restricting or outlawing these fees.
We will explain junk fees, what the Biden administration has recommended, and how customers should avoid them.
Junk Fees You Should Know Of
Many consumers are often caught off guard by additional charges they encounter after completing a transaction or receiving a product or service. These fees, commonly known as junk fees, can include service charges for event tickets, resort fees at hotels, late payment fees for credit cards, airline family seating fees, termination fees for phone or internet service, document preparation fees for financial transactions, out-of-network ATM fees, checking account overdraft fees, restaurant living wage fees, and online convenience fees.
According to Teresa Murray, director of the consumer watchdog office at the U.S. Public Interest Research Group, these fees are often used by companies to unfairly extract money from consumers or gain an advantage over competitors. Additionally, if one company fails to disclose a fee that others are charging, it can create a perception of transparency and fairness in the marketplace.
In his State of the Union speeches in 2023 and 2024, President Biden pledged to use the Junk Fee Prevention Act to take tough measures against junk fees. If Congress approves it, businesses will not be able to charge certain fees.
Although it's uncertain if popular support will result in legislation being successfully passed, experts think that closer examination may result in reforms that would probably benefit consumers.
Legislation Opposition
However, many oppose the proposed legislation. According to Peter Earle, a senior research fellow at the American Institute for Economic Research, many "junk fees" are just companies passing along the additional expenses they incur in doing business.
For instance, a promoter of concert tickets must reimburse venues, other suppliers who enable the events, and other suppliers.
What Consumers Can Do
Howard Dvorkin, CPA and chairman of Debt.com, advises being more selective about where you shop. His reasoning is that businesses will adjust their practices if they lose customers due to excessive fees. In other words, if you see a company charging junk fees, consider taking your business elsewhere to companies that don't. This can send a message to businesses that these fees are driving customers away.
The content provided on MoneyTimes.com is for informational purposes only and is not intended as financial advice. Please consult with a professional financial advisor before making any investment decisions.
