The Federal Trade Commission proposes a ban on junk fees and says hidden charges push up prices
The Federal Trade Commission proposes a ban on junk fees and says hidden charges push up prices
The Federal Trade Commission has proposed a rule to ban any hidden and bogus junk fees, which can mask the total cost of concert tickets, hotel rooms and utility bills.
The Federal Trade Commission on Wednesday proposed a rule to ban any hidden and bogus junk fees, which can mask the total cost of concert tickets, hotel rooms and utility bills.
President Joe Biden has made the removal of these fees a priority of his administration. The Democrat’s effort has led to a legislative push and a spate of initiatives aimed at helping consumers. Administration officials have said these additional costs can inflate prices and waste people’s time.
“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,” FTC Chair Lina Kahn said on a call with reporters. “Violators will be subject to civil penalties and be required to pay back Americans that they tricked.”
The FTC proposal is being coupled with the Consumer Financial Protection Bureau announcing that it will block large banks from charging junk fees to provide basic customer services.
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Great! There's no reason not to clearly disclose those fees up-front other than deception.
AirBnB is the worst at this. A vacation rental is $200 a night, so you'd assume five nights would be $1000 plus tax. But then add the cleaning fee, the service fee, the booking fee, the hosting surcharge, the surcharge fee, and a half dozen other junk fees, and suddenly it's $375 a night. Plus tax.
And at $375 a night you can get a pretty nice hotel room without the hidden fees.
Exactly. And the hotel probably has a rewards program and an on-site employee in case any issues come up.
I like the idea of vacation rentals, but I hate the current state of the market. It's almost always cheaper and simpler to just get a hotel.
And you don't have to clean it.
And a continental breakfast. Can't say no to free juice.
Hotels often have other fees tacked on, too. Especially in places like Vegas, where 90% of hotels there are also considered "resorts" and have to add a "resort" tax on top of the normal tax.
Most places have specific taxes for hotels. Taxes go to the city/state.
It's the resort fees that are annoying. The ones that claim go to your pool access and maybe the wifi.
Hotels definitely have hidden fees, plus fees like $40 a night for a parking space. They know you're traveling, so why not just include that fee in the price of the room? It's a scam.
I expect business travelers wouldn’t like that, given how few are driving.
Business travellers have everything paid for by their company. It wouldn't affect them.
I go out of my way to avoid hotels with "resort fees". That's one of the reasons we just don't go to Vegas anymore.
We don't gamble and we couldn't care less about shows. We hate the severe overcongestion of the strip. And we're both way past the age where we have any interest in clubbing. There are tons of great restaurants and bars and touristy things to do far away from the strip. But it seems like just about every hotel in and around the town charges resort fees now, and the ones that don't are in bad neighborhoods or don't have much walkable nearby or have some other deficiency. Add to that the rising costs of everything in Vegas, and it's just not worth the trip anymore.
Vegas used to be a cheap place to go because they made up so much money in gaming. About 15 years ago prices started to creep, but it was okay because Vegas still offered a lot of value for what you were paying. Vegas is now trying to reinvent itself as "a premium destination where people will pay anything because it's Vegas" rather than "a somewhat expensive destination, but you get a lot for your money".
Except AirBnB by default shows the total price in searches before taxes, including the fees. These laws exclude taxes from being required to be shown. You don't even have to click any options, it just shows you the total.
They do now, only because they were dragged kicking and screaming into doing so. The fact that they resisted this for so long and then acted like they were somehow "innovating" by simply disclosing what you're actually paying instead of burying people with fine print really left a bad taste with a lot of consumers.
None of that addresses the issue with AirBnB hosts hitting you with undisclosed requirements upon arrival. In addition to paying a cleaning fee, suddenly I have to take out the trash, wash / dry / put away the linens, scrub the bathroom, and do a checklist of other tasks.
I can stay in a four-star Marriott for $200 a night where I'm earning loyalty points, have daily housekeeping, and have on-site hotel staff in case something goes sideways. For the same price, I can stay in a mediocre AirBnB where I'm charged a cleaning fee AND hit with undisclosed requirements after the fact/