The Federal Trade Commission proposes a ban on junk fees and says hidden charges push up prices

The Federal Trade Commission on Wednesday proposed a rule to ban any hidden and bogus junk fees, which can mask the total cost of concert tickets, hotel rooms and utility bills.

President Joe Biden has made the removal of these fees a priority of his administration. The Democrat’s effort has led to a legislative push and a spate of initiatives aimed at helping consumers. Administration officials have said these additional costs can inflate prices and waste people’s time.

“The proposed rule would prohibit corporations from running up the bills with hidden and bogus fees, requiring honest pricing and spurring firms to compete on honesty rather than deception,” FTC Chair Lina Kahn said on a call with reporters. “Violators will be subject to civil penalties and be required to pay back Americans that they tricked.”

The FTC proposal is being coupled with the Consumer Financial Protection Bureau announcing that it will block large banks from charging junk fees to provide basic customer services.

Treczoks,

But, but, profitable business model! How should they make insane profits if governmetal overreach forces them to honesty!

foggy,

I’m sick of the FTC not doing shit.

Please, do anything.

lolcatnip,

What a sad state of affairs that we’re just now getting to the point where businesses might be required to stop systematically stealing from customers by billing more than the price they quote.

csm10495,
@csm10495@sh.itjust.works avatar

Can we call tax a junk fee and bundle it in all prices like in Europe?

RandomPancake,

Great! There’s no reason not to clearly disclose those fees up-front other than deception.

AirBnB is the worst at this. A vacation rental is $200 a night, so you’d assume five nights would be $1000 plus tax. But then add the cleaning fee, the service fee, the booking fee, the hosting surcharge, the surcharge fee, and a half dozen other junk fees, and suddenly it’s $375 a night. Plus tax.

Kalkaline,
@Kalkaline@leminal.space avatar

And at $375 a night you can get a pretty nice hotel room without the hidden fees.

RandomPancake,

Exactly. And the hotel probably has a rewards program and an on-site employee in case any issues come up.

I like the idea of vacation rentals, but I hate the current state of the market. It’s almost always cheaper and simpler to just get a hotel.

Nougat,

And you don't have to clean it.

holiday,

And a continental breakfast. Can’t say no to free juice.

bassomitron,

Hotels often have other fees tacked on, too. Especially in places like Vegas, where 90% of hotels there are also considered “resorts” and have to add a “resort” tax on top of the normal tax.

ChexMax,

Hotels definitely have hidden fees, plus fees like $40 a night for a parking space. They know you’re traveling, so why not just include that fee in the price of the room? It’s a scam.

Masshuru,

I expect business travelers wouldn’t like that, given how few are driving.

beansbeansbeans,

Business travellers have everything paid for by their company. It wouldn’t affect them.

brygphilomena,

Most places have specific taxes for hotels. Taxes go to the city/state.

It’s the resort fees that are annoying. The ones that claim go to your pool access and maybe the wifi.

RandomPancake,

I go out of my way to avoid hotels with “resort fees”. That’s one of the reasons we just don’t go to Vegas anymore.

We don’t gamble and we couldn’t care less about shows. We hate the severe overcongestion of the strip. And we’re both way past the age where we have any interest in clubbing. There are tons of great restaurants and bars and touristy things to do far away from the strip. But it seems like just about every hotel in and around the town charges resort fees now, and the ones that don’t are in bad neighborhoods or don’t have much walkable nearby or have some other deficiency. Add to that the rising costs of everything in Vegas, and it’s just not worth the trip anymore.

Vegas used to be a cheap place to go because they made up so much money in gaming. About 15 years ago prices started to creep, but it was okay because Vegas still offered a lot of value for what you were paying. Vegas is now trying to reinvent itself as “a premium destination where people will pay anything because it’s Vegas” rather than “a somewhat expensive destination, but you get a lot for your money”.

dogslayeggs,

Except AirBnB by default shows the total price in searches before taxes, including the fees. These laws exclude taxes from being required to be shown. You don’t even have to click any options, it just shows you the total.

RandomPancake,

They do now, only because they were dragged kicking and screaming into doing so. The fact that they resisted this for so long and then acted like they were somehow “innovating” by simply disclosing what you’re actually paying instead of burying people with fine print really left a bad taste with a lot of consumers.

None of that addresses the issue with AirBnB hosts hitting you with undisclosed requirements upon arrival. In addition to paying a cleaning fee, suddenly I have to take out the trash, wash / dry / put away the linens, scrub the bathroom, and do a checklist of other tasks.

I can stay in a four-star Marriott for $200 a night where I’m earning loyalty points, have daily housekeeping, and have on-site hotel staff in case something goes sideways. For the same price, I can stay in a mediocre AirBnB where I’m charged a cleaning fee AND hit with undisclosed requirements after the fact/

zero_spelled_with_an_ecks,

Can we do airlines, too?

pdxfed,

Airlines are required to provide price taxes and fees up front, it had its own legislation around 06(?). The rest of the things they’re now charging for like baggage, a non-middle seat, etc. that used to be included are theoretically optional so they don’t have to include it.

Airlines just need to be federalized officially, they’ve had two bankruptcy cycles in the last 15 years, and the industry has no ideas or interest other than adding things to the list above that are currently included that they can then charge you for. Canned air from Druidia is next.

Kerrigor,
Kerrigor avatar

Spirit charges you for your seat after you arrive. So no they aren't already doing this

dogslayeggs,

No, they charge you for picking a seat. They don’t stop you from boarding the plane. You can even pay less for a flight by buying your Spirit ticket at the airport to avoid a $23 passenger usage fee.

pdxfed,

So you buy the ticket but can’t get on the plane unless you pay an additional seat fee at check in?

dogslayeggs,

No, that person is incorrect. They charge you to pick your seat. They don’t stop you from getting on the plane.

pdxfed,

Ok, so then that’s one of the services that used to be free but they now charge for; it’s standard asshole corporate squeeze but not hidden.

bassomitron,

State control of airlines is an interesting proposal… I like it a lot the more I think about it.

pdxfed,

There would be drawbacks for sure, but no one can seriously argue airlines aren’t incredibly worse than they were before deregulation.

Great article here: www.theatlantic.com/ideas/archive/2023/…/675374/

isles,

I’m just waiting to have to swipe my card to unlock my tray table or page the FA.

pdxfed,

If you want to apply for our credit card we can waive the FA fee…but actually no need to apply, we took the liberty of using your fingerprint from the armrest and have great news, you’re pre-approved! Simply nod your head to accept the APR of 99.99% and we’ll get the FA to your seat straight away.

evatronic,

Airlines used to be regulated and broken into many smaller regional airlines. Airlines were required to run certain routes at minimum frequency to ensure everywhere was serviced.

Then came the airline deregulation act and, predictably, things went to shit.

lolcatnip,

I wish companies like Expedia would make it a feature of their price comparison to show prices that include options the customer plans to use, like baggage or wifi, with the default set to a set of options most customers choose.

Taco2112,

While we’re at it, can we get them to make stores include tax in the price listed as well? I’m happy to pay tax because we benefit from it but having tacked on at the end seems like a hidden fee to me.

bassomitron, (edited )

deleted_by_author

    •
    Nougat,

    There's also intermittent tax holidays for various classes of items (school supplies in the late summer, certain foods, infant supplies), which can apply at the municipality, county, or state level - or any combination of the three.

    With regard to retail stores, especially ones that sell groceries and sundries, the tax landscape is just too complicated and ever-changing for stores to be retagging shelves all the time.

    snooggums,
    snooggums avatar

    Stores change posted prices without tax more often than the taxes change, and they can handle the taxes in their point of sales, so they can easily include the taxes in the posted price by using the point of sale price.

    bassomitron,

    deleted_by_author

    •
    snooggums,
    snooggums avatar

    They don't have to calculate at checkout, and even if companies were forced to it would be within a few cents. Still better than needing to estimate ahead of time to know if you have enough tmfor tax.

    I live in the US and several businesses have tax included in their listed prices. It really is not that hard.

    bassomitron,

    deleted_by_author

    •
    snooggums,
    snooggums avatar

    Bars frequently sell drinks at a price that includes tax, and people frequently purchase more than one.

    Most concession stands sell food with tax included in the price per item.

    It is called sales tax because it is from items being sold, not whether they are sold together or individually.

    bassomitron,

    deleted_by_author

    •
    snooggums,
    snooggums avatar

    When you have a tab at a bar you pay for multiple at the same time when you close out the tab. Same thing.

    grue,

    Apologists: “it would be too hard for stores to post the prices!”

    Meanwhile, stores be like:

    e-ink price tag

    (In case it’s not obvious, that’s an electronic price tag.)

    altima_neo,
    @altima_neo@lemmy.zip avatar

    Posting prices on store shelves isn’t a big deal. We do it every week.

    And presumably. Taxes don’t change very often, so including tax into the price wouldn’t be hard to do.

    bassomitron,

    deleted_by_author

    •
    Salad_Fries,

    I think youre fundamentally misunderstanding how math works…

    Sales tax is percentage based… purchasing 1 item at $10 pays the exact same amount of sales tax as purchasing 2 items at $5 or 10 items at $1 regardless of if the tax is applied “per item” or “total sale”.

    Blaster_M,

    Regardless how sales tax is charged, the items can be priced to cover tax and sold at that price, tax included. Other parts of the world already do this, and it is the business that reports the numbers to the gummint and pays their tax bill. Profit margins can be optimised to fix the little sway in the sub-cent variance of percentages, and only a real penny pincher would care. You sell this much, you pay this much, every month. It’s how it works in the end.

    And businesses already re-print/price their items frequently, sometimes on every purchase order received, which can be several times a week, because prices go up.

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