US President Joe Biden announced this Wednesday (1st) new progress on his administration’s “competition agenda”, specifically targeting useless fees, while asking Congress to pass legislation targeting hidden fees in various sectors.
Those costs could “drain hundreds of dollars a year out of the pockets of working American families, especially people who are already struggling to make ends meet — but no more after today,” Biden said at the fourth meeting of the Presidential Council on Competition on Wednesday.
The legislation proposed in partnership with the Consumer Financial Protection Bureau, called the “Junk Fee Protection Act”, would target four types of excessive fees:
- Excessive fees for online concerts, sporting events and entertainment tickets
- airfares for families sitting together on flights
- exorbitant early termination fees for TV, phone and internet services
- resort fees and surprise destination
In brief remarks before the meeting, Biden called credit card late fees in particular “a crappy fee,” saying the CFPB’s new guidance would reduce those fees.
“Today’s rule proposes to cut those fees from $31 on average to $8,” he added. “This change is expected to save Americans tens of millions of dollars, about $9 billion a year in total savings.”
Biden urged Congress to pass the “crap tax” legislation, saying it would give “working Americans a little more breathing room.” It is part of a plan, he added, to build “a competitive economy that works for everyone”.
“Companies exploited a loophole”
Rohit Chopra, director of the CFPB, noted before the announcement that “more than a decade ago, Congress banned excessive credit card late fees.”
“But the companies exploited a regulatory loophole that allowed them to escape scrutiny by charging an illegal crappy fee,” he added in a statement to the CNN . “Today’s proposed rule seeks to save households billions of dollars and ensure that the credit card market is fair and competitive.”
Another fee category that frustrates many customers is event tickets sold online, for which the additional fees are often high – and usually appear towards the end of the payment process, when the customer is about to make the purchase.
For example, earlier this year, lawmakers quizzed Live Nation President and CFO Joe Berchtold after a ticket sales debacle due to exorbitant ticket fees. While the company said on Wednesday it supports the reform, it also said it opposes the proposed legislation.
“We stand ready to work with the President and Congress on many common-sense box office reforms, while also speaking out against proposed legislation that would benefit scalpers over artists and fans,” the company said in a statement.
Biden’s Department of Transportation also took steps last fall during the previous Competition Council meeting to reduce “unnecessary hidden fees” from airlines and travel websites that the president warned were “weighing down family budgets.”
Source: CNN Brasil
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