Whether you’re purchasing concert tickets, checking out of a hotel or canceling a cable subscription or gym membership, you’ve likely run into a spate of additional charges.
These are unexpected — and sometimes hidden — fees that companies pass on to you for a service that costs them little (or nothing) to provide. Among American consumers they are wildly unpopular.
According to a 2024 Navigator Research survey that polled general election voters in 61 battleground congressional districts, nearly nine in 10 want Congress to pass laws banning or limiting these fees.
Here’s what junk fees are, what the Biden administration has been proposing regarding them and how consumers can avoid them.
Common Junk Fees
Many people are unaware of these extra charges until they complete a transaction or have already received a product or service. Common junk fees include:
— Service charges for event tickets.
— Resort fees at hotels.
— Late payment fees for credit cards.
— Airline family seating fees.
— Termination fees for phone or internet service.
— Document preparation fees for financial transactions.
— Out-of-network ATM fees.
— Checking account overdraft fees.
— Restaurant living wage fees.
— Online convenience fees.
“A lot of times these fees are just ways for companies to secretly gouge consumers, or to get an unfair advantage over their competitors,” says Teresa Murray, direct of the consumer watchdog office at the U.S. Public Interest Research Group.
“If there is a fee that everyone is charging but one company isn’t disclosing it, that can make one company seem like their product or service is cheaper. But they’re just not being transparent,” she adds.
The Junk Fee Prevention Act
In both his 2023 and 2024 State of the Union addresses, President Biden promised to crack down on these fees with the Junk Fee Prevention Act. If passed by Congress, it will limit the ability of companies to levy certain fees.
[Biden’s Crackdown on Junk Fees in Retirement Plans]
While it’s unclear whether public support will translate to successful legislation passage, experts say that increased scrutiny could lead to changes that would likely benefit consumers.
“Junk fees make people feel angry, helpless and frustrated — like they’re being nickel and dimed,” says Nadine Chabrier, a senior policy counsel working on federal policy and litigation at the Center for Responsible Lending.
“These fees affect virtually everyone, but financially vulnerable consumers frequently bear the brunt of such fees,” she adds.
Legislation Detractors
Still, the proposed legislation has some detractors. Peter Earle, a senior research fellow with the American Institute for Economic Research, says that many so-called junk fees involve businesses passing along the added costs they face to do business.
A concert ticket promoter, for example, needs to pay the facilities that host events and other vendors that make them possible.
“Many times, the reasons for which these fees are appended are defensible,” Earle says. “The only way to eliminate them is by rolling them into a single price, and consumers would like that even less.”
Consumers Can Control Some Junk Fees
The Biden administration’s legislation is still winding its way through Congress, but even if it doesn’t pass, there are ways to avoid some junk fees.
The first, says Howard Dvorkin, CPA and chairman of Debt.com, is to be more discerning about where you shop.
“Stop patronizing the places that keep hitting you with these stupid charges, and eventually they’ll get the message that they shouldn’t be charging them,” Dvorkin says. If you see that one company is charging extra but another isn’t, take your business elsewhere.
For example, as a traveler you have choices between airlines. Review the terms and look for one that has a low or no fee policy on services you want. Maybe you want to take the kids on a trip and don’t want to be charged extra for adjacent seats for children. If so, you may lean toward Alaska, American or Frontier.
[The Trick to Finding Cheap Flights in 2024]
When buying tickets to concerts, plays and sporting events you may be able to avoid the service fees by purchasing them directly through the box office. If you are an avid movie-goer and want to reserve seats, consider joining the cinema’s reward program. AMC’s Stubs program will waive online ticket reservation fees, even at the “free” level.
[How to Get Cheap Sports Tickets and Concert Tickets]
If you don’t know what kind of fees you may be up against when you stay at a hotel, a little research goes a long way. Check out how much you might be charged for things like parking, resort fees, and Wi-Fi connection, then call and ask how you may get around those charges.
Have you ever been surprised by a restaurant check that seems unusually large? Read the bill carefully. You may spot fees for credit card transactions, employee health insurance and inflation. You can try to have them purged from the bill, but if management doesn’t budge, consider dining elsewhere in the future.
To eliminate or lower fees associated with banking, select low fee credit cards. Pay your bills on time and stay under the limit so you aren’t financially penalized. Open checking and savings accounts at financial institutions that keep account fees to a minimum.
[Read: Best No-Annual-Fee Credit Cards.]
For everything else, from terminating phone or internet service to having documents prepared to financial transactions, it always pays to ask if there are any additional charges to be aware of and in what circumstances they can be waived.
If the Junk Fee Prevention Act does pass, consumers won’t have to be quite as eagle-eyed while shopping. But even if it doesn’t, or the version that does make it through is diluted, remember that you, as a consumer, hold the power of the purse strings.
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What Is a Junk Fee and How Does It Affect You? originally appeared on usnews.com
Update 04/25/24: This story was previously published at an earlier date and has been updated with new information.
