Bill Introduced by Senator Blumenthal Today Aims to Protect Consumers From Costly Hidden Fees That Hike up the Cost of Goods and Services
WASHINGTON, D.C. – Consumer Reports endorsed the Junk Fee Prevention Act introduced today by Senator Richard Blumenthal modeled after a proposal touted by President Biden during the recent State of the Union address. The bill aims to rein in the rise of hidden fees that frustrate consumers and distort and inflate the true price of goods and services.
“Consumers are rightfully fed up with the proliferation of junk fees that jack up the price of everything from event tickets and hotels to airline flights and internet services,” said Chuck Bell, advocacy program director for Consumer Reports. “Junk fees can add up to a lot of extra money and pose a real financial strain for families at a time when inflation is already taking a big bite out of their wallets.”
Bell continued, “These charges are being added to more and more transactions – hidden in the fine print of a contract, popping up when you reach the last page of an online purchase, or combined with taxes and other costs. Congress should protect consumers from these unfair and deceptive charges by passing the Junk Fee Prevention Act.”
The bill introduced by Senator Blumenthal would require hotels and event ticket sellers to disclose all fees upfront; ban early termination fees charged by cable TV, internet and mobile phone companies and require all mandatory fees to be disclosed in advertised prices; and require airlines to provide children 13 years old or younger a seat next to a family member at no extra charge.
Junk fees have become increasingly common in recent years and made it difficult for consumers to know the true cost of services based on the advertised price. For example, the Government Accountability Office found in 2018 that fees charged on concert, sports and event tickets add an average 27 percent more to the ticket’s face value price. Likewise, a Consumer Reports investigation in 2019 found that cable company-imposed fees cost consumers $37 per month, on average, and add an extra 24 percent surcharge on top of the advertised price.
Last year, a CR review of broadband service bills found that more than a dozen internet service providers charged company-imposed fees under names such as “network enhancement fee,” “internet infrastructure fee,” deregulated administration fee,” and technology service fee.” These fees can surprise consumers when they appear on monthly bills, and can enable providers to raise prices without seeming to violate marketing or contractual price commitments.
Consumer Reports has also called on the Consumer Financial Protection Bureau to protect consumers from excessive junk fees charged by financial institutions. The CFPB has been examining exploitive fees that can obscure the true cost of services and undermine family finance. CR has urged the CFPB to use its authority to ensure that financial fees are clearly disclosed in plain language, imposed fairly, and reasonably proportionate to the cost of providing the service.
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Contact: Emily Akpan, emily.akpan@consumer.org