The Cost of Living Continues to Rise
As inflation continues to soar and many Americans struggle to keep up with the cost of living, Joe Biden has targeted random junk fees as a way to keep expenses down.
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A wide range of businesses have added unnecessary junk fees to the cost of everyday purchases, causing people to spend exorbitant amounts of money on things like concert tickets, hotel rooms, and even utility bills.
Hidden Fees Would Be Prohibited Without Notice
The FTC’s proposed rule would make it so multiple industries would be banned from adding bogus fees to basic transactions without being upfront about the charges. If the rule gets approved, businesses that continue to pile on these fees will be fined and forced to return the money back to their consumers.
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The FTC insists that their proposed policy could save Americans “tens of billions of dollars in fees.” FTC Chair Lina Khan explained the purpose behind taking action against junk fees, saying, “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.”
The New Rule Will Save Consumers Both Money and Time
Not only will the FTC’s new proposed policy save consumers from blindly overspending, but it will also spare them valuable time.
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The FTC estimates that their new rule will save Americans over 50 million hours annually of wasted time spent searching through ticket and hotel prices. This astronomical amount of time given back to consumers could be equal to more than $10 billion over the next ten years.
The President Slammed Junk Fees During a Recent Speech
The elimination of junk fees is an example of Biden’s effort to propel “Bidenomics” into the forefront of America’s economic future.
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The President was outspoken against the American people getting bludgeoned with junk fees for virtually every conceivable purchase. “Folks are tired of being taken advantage of and played for suckers,” he said during a recent speech outlining his plan of action. “Unfair fees known as junk fees – those hidden charges that companies sneak into your bill to make you pay more because they can. Simply because they can,” Biden continued.
Biden Knows That Junk Fees Can Create Financial Hardship
The President unscored the obvious problem with junk fees by saying, “Charges are taking real money out of the pockets of American families. These junk fees can add hundreds of dollars weighing down family budgets, making it harder to pay family bills.”
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While Biden acknowledged that these fees may be meaningless to some, they could also be crippling costs to others. “These junk fees may not matter to the wealthy, but they sure matter to working folks in homes like the one I grew up in,” he said, before adding that the FTC’s new rule sets out to give Americans some much-needed “breathing room.”
Biden Is Adamantly Against Charging Junk Fees to Americans
Continuing on his mission to promote the FTC’s proposed junk fee ban, Biden said that companies need to be forthcoming about any costs added to consumer bills.
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Instead of piling on junk fees in secret, the proposed rule will ensure that businesses will have to be transparent. “If this proposed rule is finalized as proposed, the FTC would have the power to impose financial penalties on companies that don’t disclose their full upfront price and secure refunds for customers who have been defrauded by companies charging hidden fees,” he said.
The FTC Can Push the Rule Through Without Congress
After a 60-day public comment period the rule will be entered into the Federal Register. However, time is of the essence and nobody can confirm when the rule would eventually go into effect.
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The good news is that the FTC has the power to forge ahead with the anti-junk fees rule without Congress giving the green light. President Biden hopes that the proposed junk fee ban will allow for $2 billion in consumer savings and an additional $140 million in refunds from the Consumer Financial Protection Bureau.
The FTC Wants Businesses to Be Honest and Accountable
While the FTC’s proposed rule would not restrict companies from jacking up prices, it would force them to be upfront about exactly what they are asking consumers to pay for. An official for the FTC revealed that their efforts are designed with the consumer in mind.
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“We want companies competing on price, not on their ability to hide prices from consumers,” they 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.”
Even Bank Junk Fees Are Getting Eliminated
In addition to the FTC challenging junk fee charges, more changes are underway for Americans who are being nickel and dimed at the bank.
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The Consumer Financial Protection Bureau is taking action to prevent banks and credit unions from charging customers for simple services such as “checking bank account balances, obtaining a payoff amount for a loan, or getting account information needed for applications.” Biden has also shared his thoughts on banks taking advantage of the American people by saying, “These fees are now illegal,” before adding that he hopes to stop “tens of billions of dollars in other junk fees across the economy” from being charged to unsuspecting people across the nation.
Is it the End of the Road for Junk Fees?
Americans have been forced to pony up billions of dollars in junk fees which has ultimately hurt the economy in a big way.
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Rohit Chopra, director of the Consumer Financial Protection Bureau, expressed his dissatisfaction with how junk fees have been allowed to exist until now. “Junk fees have been creeping across the economy, and Americans are tired and fed up,” he said. “We are issuing a new policy to ensure the largest banks in the country play it straight with consumers.”
Americans Are United Against Junk Fees
While America remains divided on many political issues, they can all agree that junk fees have got to go. Lina Khan, chair of the FTC, has referred to junk fees as “an invisible tax that quietly inflates prices across the economy.”
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She hopes that the FTC’s rule will create a major shift for the American economy and provide some financial relief to consumers across the country. “Our proposed rule to ban junk fees would not just return money to people’s pockets but also restore a degree of justice to American families and restore fairness in our markets,” she said.