JUNK Fees

The Consumer Financial Protection Bureau is taking companies to task to make sure you aren’t getting taken to the cleaners. Their plan is to save you billion$.

To start, note that there is nothing wrong or illegal about adding fees to a service – the issue is that they are not being properly disclosed. Since they are not transparent in your initial purchase, prices can sometimes seem better than they truly are.

Have you ever booked a hotel room or airline ticket based on the price and then your total included all kinds of ‘extras’…so that initial price you had in mind went WAY up? Those are junk fees. They can be spotted in so many places including overdraft fees, resort fees, late fees, processing fees, ticket fees, food delivery fees…the list is endless. The issue is being addressed on the Federal and State level with the goal being that companies need to disclose more of their fees as part of the total package UP FRONT to help consumers make more informed decisions.

The Council of Economic Advisers has been compiling estimates, and a visual is quite sobering – this will have you reading the fine print next time you click on the check-out button:

 Source: https://www.whitehouse.gov/cea/written-materials/2024/03/05/the-price-isnt-right-how-junk-fees-cost-consumers-and-undermine-competition/?utm_source=link

The CFPB means business and they are making progress. Just a few months ago, they finalized a rule which will cut excessive credit card late fees. They are digging into loopholes and proposing rules and guidelines to end this predatory behavior.