The Federal Trade Commission proposes a ban on junk fees and says hidden charges push up prices
The Federal Trade Commission proposes a ban on junk fees and says hidden charges push up prices
The Federal Trade Commission has 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.
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.
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.
And at $375 a night you can get a pretty nice hotel room without the hidden fees.
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.
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/
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.
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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.
I’m doubtful of your argument that it would be difficult. Store’s add inflation prices or have sales and other various promotions or where the price changes and they seem to be able to roll with those changes pretty easily. Granted, those are set by the store so they get to decide. But, if they know the price is increasing 0.05% at the beginning of the year, they have time to plan and figure out the price change.
You say it’s fairly easy to just add 10%, I think it is when you’re buying one or two items but I think most walk around the grocery store thinking “I have to add 10% to the milk, I have to add 10% to the lettuce, I have to add 10% to the bread, I have to add 10% to the salsa, 10% to the chips”.
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.
I'm sick of the FTC not doing shit.
Please, do anything.
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.
Can we do airlines, too?
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.
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.
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.
Can we call tax a junk fee and bundle it in all prices like in Europe?
But, but, profitable business model! How should they make insane profits if governmetal overreach forces them to honesty!