President Joe Biden is expected to unveil new efforts to crack down on junk fees during an event at the White House Wednesday, while announcing $2 billion in savings and $140 million in consumer refunds from previous crackdowns on junk fees from the Consumer Financial Protection Bureau.
According to an administration fact sheet shared with CNN ahead of Wednesday’s announcement, the Federal Trade Commission will unveil a proposed rule that the Biden administration says would ban businesses from charging hidden or misleading fees and require companies to show full prices upfront, preventing event ticketing companies, hotels and lodging companies, apartment and car rental agencies, and more from levying surprise or unexpected service charges.
“For President Biden, kitchen table economics is at the heart of growing the economy from the middle out and bottom up – that’s because he thinks a lot about how it feels for a family to sit around the kitchen table, choosing which bills to pay and what order each month, because there isn’t enough money to cover everything,” National Economic Council Director Lael Brainard told reporters on a call Tuesday.
“That’s why we’ve made it a priority to crack down on the junk fees that are hidden away in payments for so many services and that really add up. … Those sneaky fees might not matter a lot to the wealthiest Americans, but they sure do matter for hardworking Americans sitting around the kitchen table trying to stay on top of their bills and have a little left over,” Brainard continued.
According to an official, the proposed junk fee rule would not limit what sellers can charge, but would require that vendors, including ticket sellers, disclose final costs upfront.
“We want companies competing on price, not on their ability to hide prices from consumers,” the official said. “So what our rule would do is require upfront pricing, so that consumers can look for the ticket seller with the best deal and an honest business and have a fair chance to compete.”
The official noted that while it’s already illegal for companies to hide fees on the back-end of sales, the administration stands prepared to bring enforcement action against companies charging excessive fees, so “firms should not wait for a rule to be finalized, they should act now to ensure they’re in compliance.”
In addition, the CFPB will take steps to prohibit large banks and credit unions from charging consumers for basic services like checking bank account balances, obtaining a payoff amount for a loan, or getting account information needed for applications.
A proposed rule from CFPB would also require banking institutions to allow consumers to securely send transaction data to other companies, making it easier for customers to switch providers to “ensure financial companies compete based on service quality and up-front pricing, deterring junk fees.”
Source: www.cnn.com