It has been claimed that Joe Biden will crack down on surprise “junk fees” being charged to shoppers for thousands of everyday products to get back into the White House.
The hidden fees are levied on concert tickets, food deliveries, airline tickets, and car rentals, among others.
Used in almost every consumer goods industry, they are designed to lure customers in with an attractive price, only to then charge them more at the last minute.
Biden announced a “fight to end junk fees” during a White House press briefing earlier this month and said his administration has already pressured ticketing platforms Live Nation, which includes Ticketmaster, and SeatGeek to list all fees upfront .
“I think that’s just wrong,” said the then-president. “Junk charges aren’t so much an issue for the rich, but they’re an issue for working people like the homes I grew up in, and they can rake in hundreds of dollars a month and make it harder for families to pay their bills.” .”
Biden’s focus on junk charges is part of a broader strategy to target corporations and foment problems facing working and voting Americans. In his State of the Union address in February, he touched on junk fees, but also raised taxes for companies.
President Joe Biden can be seen during a meeting at the White House this month where he advocated for the end of so-called junk fees imposed on American consumers at the end of the checkout process
In November last year, Taylor Swift fans were in an uproar after the Ticketmaster website collapsed due to the ticket rush and renewed calls for the industry to be regulated. When buying tickets online, the fees can be around 20 percent of the ticket price
“The genius of Joe Biden’s presidency is to bring about change that people feel every day,” Senator Elizabeth Warren told The Daily Beast of his junk fee policy.
“It’s politically smart, but it’s also right.” “To show people that government can be on the side of the people and not just always help big companies,” she said.
In November last year, Taylor Swift fans were in an uproar after the Ticketmaster website collapsed due to the ticket rush and renewed calls for the industry to be regulated.
In the criticism, Ticketmaster denied anti-competitive practices, claiming there was no “evidence of systemic violations” and that the company signed a decree with the Justice Department after merging with Live Nation in 2010.
When ordering food through apps like Grubhub, DoorDash, and Uber Eats, there are often numerous fees at the very end of the checkout process, after customers have already invested time selecting items and exploring options.
When renting a car, it often happens that additional insurance or young driver costs arise once the customer collects the car and has no alternative options.
Junk fees are also regularly levied on mobile phone bills.
The hidden costs are a combination of fees and taxes. Some are mandated by the state, others are mandated by cell phone providers.
Consumers paid about $11.2 billion in these taxes last year alone, according to the latest data from the think tank Tax Foundation.
It found that average cell phone charges have skyrocketed for the fifth straight year and now account for a record 25.4 percent of the average bill.
According to the study, a typical household with four phones and a “Family Share” plan paying $100 a month would spend nearly $305 a year in taxes, fees and government surcharges.
When renting a car, it often happens that additional insurance or young driver costs are incurred once the customer picks up the car
When ordering food through apps like Grubhub, DoorDash, and Uber Eats, there are often numerous fees at the very end of the ordering process
US Senator Richard Blumenthal said the agreement with the ticket giants was a step in the right direction but insufficient.
“Instead of a voluntary patchwork that varies by company, Americans deserve a basic disclosure standard so they’re fully aware of the prices and fees they’re being charged.” Nickel boosted and consumers weakened are counted,” he said.
The “flat pricing” for tickets announced by Biden this month does not mean that companies will eliminate the surcharges, just that the fees will be made clear to the customer.
Beginning in September, all event tickets at Live Nation’s 200+ venues will have transparent pricing for the concert goer or sports fan, which the government estimates will benefit over 30 million customers.
The president said there is a queue for other companies to make similar changes.
“I urge their competitors to follow suit and adopt flat pricing as well,” Biden said. “These actions are important and inspire companies to change their practices.”
In a White House study of 31 different sporting events on five ticket vendors’ websites, service fees averaged more than 20 percent of the ticket’s face value, and total fees — such as handling fees, delivery fees, and setup fees — amounted to more than 20 percent and half that ticket price itself.
Another glaring example of hidden junk fees is charging airline passengers last-minute for baggage check-in. According to the Department of Transportation, passengers had to pay $5.3 billion in baggage fees last year alone.
Customers are often promised a lump sum for a flight, only to find that the actual fare is hundreds of dollars more.
Biden said his government has already pressured ticketing platforms Live Nation, SeatGeek and Ticketmaster to list all fees upfront. He is pictured on June 15th
According to the Department of Transportation, passengers had to pay $5.3 billion in baggage fees last year alone
Despite the government’s crackdown, there has been no formal change to cap baggage fees. This month, American Airlines announced that it will now charge a $75 checked bag fee on all basic economy tickets.
Most airlines offer a free carry-on bag, which some customers use as their only bag for a short trip.
A decade ago, however, many began imposing penalties on passengers whose carry-on baggage exceeded the requirements and could not be stowed in the cabin space. The fine covers the cost of storing the bag along with the other suitcases paid for.
Consumers have long suspected that staff are too strict in enforcing the rules, often penalizing passengers whose luggage easily meets the requirements.
Reports that Frontier Airlines employees were being paid a $10 bonus for each overweight bag found and identified seemed to confirm these suspicions.
Banking is another industry that resorts to junk fees to boost its revenue.
Surcharges include overdraft fees, late credit card payment fees, account maintenance fees, or even fees for paying a bill.
It is estimated that consumers paid over $7.7 billion in overdraft and insufficient fund fees in 2022.
The Consumer Financial Protection Bureau (CFPB) has proposed a rule to curb excessive fees for late credit card payments. It is estimated that credit card companies collect approximately $12 billion in late payment interest each year.