Biden vows to crack down on surprise junk fees in a re-election bid

Joe Biden will crack down on surprise “junk fees” faced by buyers on thousands of everyday products in a bid to get back into the White House, it is claimed.

The hidden costs are added to concert tickets, food delivery orders, airline tickets, and car rentals, among other things.

They are used in almost all consumer sectors and are designed to lure customers in with an attractive price, only to make them pay more at the last minute.

Biden announced a “battle to end junk costs” at a White House press conference earlier this month, saying his administration had already pressured ticket platforms Live Nation, owner of Ticketmaster, and SeatGeek to drop all charges. to list in advance.

“I just think it’s wrong,” the president said at the time. “Junk fees aren’t so much an issue for the rich as they are for working people, like the homes I grew up in, and they can add hundreds of dollars a month and make it harder for families to pay their bills.”

Biden’s focus on junk fees is part of a broader strategy to address corporate and solve problems facing working and voting Americans. During his State of the Union address in February, he talked about junk costs, but also tax increases for businesses.

“The genius of Joe Biden’s presidency has been to bring about changes that people feel every day,” Senator Elizabeth Warren told The Daily Beast regarding his unwanted compensation.

It’s politically smart, but it’s also the right thing to do. To show people that government can be on people’s side, not just help big companies all the time,” she said.

Last November, Taylor Swift fans rioted after the Ticketmaster site went under in a ticket stampede, renewing calls for regulation from the industry.

Under criticism, Ticketmaster denied anti-competitive practices, claiming there was no “evidence of systemic violations” and that it signed an executive order with the Justice Department following its 2010 merger with Live Nation.

When ordering food through apps like Grubhub, DoorDash, and Uber Eats, it’s common for numerous fees to be added at the end of the ordering process after customers have already invested time in selecting items and considering options.

It often happens that when renting a car, extra insurance or costs for young drivers are incurred when the customer goes to pick up the car and has no other options left.

Likewise, junk charges are also routinely applied to mobile phone bills.

The hidden costs consist of a combination of fees and taxes. Some are government-mandated, while others are mandated by cell phone providers.

Last year alone, consumers paid about $11.2 billion in these taxes, according to the latest data from think tank the Tax Foundation.

It found that average cell phone service costs have skyrocketed for the fifth year in a row, now accounting for a record 25.4 percent of the average bill.

A typical four-phone household with a “family share” plan paying $100 per month would spend nearly $305 per year in taxes, fees and government benefits, according to the study.

US Senator Richard Blumenthal said the deal with the ticket giants was a step in the right direction, but not enough.

“Instead of a voluntary patchwork that varies by company, Americans deserve a basic disclosure standard so they can be fully aware of the prices and fees they are being charged. The days of nickel-filling corporate profits and dimming consumers are numbered,” he said.

The “all-in prices” for tickets that Biden will announce this month do not mean that companies will cut surcharges, but simply that the costs are made clear to the customer.

Beginning in September, all event tickets at Live Nation’s more than 200 venues will make pricing transparent to concertgoers or sports fans, which the government estimates will benefit more than 30 million customers.

The president said it was a queue for other companies to make similar changes.

“I ask their competitors to follow suit and also have an all-inclusive price,” Biden said. “These actions matter and it inspires companies to change their practices.”

In a White House review of 31 different sporting events across five ticket seller websites, service fees averaged more than 20 percent of the face value of the ticket, and total costs — such as processing fees, delivery fees, and facility fees — amounted to more than half the price of the ticket itself.

Another egregious example of hidden junk costs is the last-minute charging of airline passengers for baggage check-in. Passengers paid $5.3 billion in baggage fees last year alone, according to figures from the Transportation Department.

Customers are often promised a principal for a flight only to find out that the actual cost is hundreds of dollars more expensive.

Despite the government’s crackdown, no formal change has yet been made to limit baggage fees. This month, American Airlines announced it will now charge $75 for checked baggage on all Basic Economy tickets.

Most airlines offer one free piece of hand luggage, which some customers use as the only luggage for a short trip.

Ten years ago, however, many began issuing fines to passengers whose hand luggage exceeds the requirements and cannot be slid into the cabin hold. The fine covers the cost of storing the bag along with the other paid bags.

Consumers have long been suspicious that staff are over-enforcing the rules and often fine passengers whose luggage would easily meet the requirements.

Reports that Frontier Airlines employees receive a $10 bonus for every overweight piece of luggage they find and identify seemed to confirm these suspicions.

Banking is another industry that resorts to junk fees to bolster its revenues.

Add-ons include overdraft fees, late credit card fees, account maintenance fees, or even fees to pay a bill.

It is estimated that consumers paid more than $7.7 billion in overdraft and underfunding fees in 2022.

The Consumer Financial Protection Bureau (CFPB) has proposed a rule to curb excessive late fees for credit cards. It estimates that credit card companies rake in about $12 billion a year in delinquent fees.