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.
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.
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/