Taking Aim at Junk Fees

Senator Richard Blumenthal (D-CT) introduced the Junk Fee Prevention Act  (S.916), which takes aim at eliminating fees that are not advertised for a product but that get added on after a customer buys a product or service. These fees were attacked this year by President Biden in the State of the Union Address. Telecommunications companies, particularly cable companies, are among the worst in having hidden junk fees that are not included in advertising but are added to a customer’s first bill. But telecom companies aren’t the only industry, and the bill is aimed at airlines, online ticket companies, and other industries that routinely advertise prices that are lower than what a consumer is ultimately charged. It’s clear why companies use junk fees since the practice gives them the ability to advertise super-low rates to attract customers. Consumers hate hidden fees. Anybody who has signed with one of the giant cable companies got a big surprise when they opened their first bill. But by then, most people are locked into a contract that came along with getting the low advertised rates. Deceptively low special rates make it unfairly hard to compete against a cable company. A competitor could have prices that are lower than the cable company, but hidden fees let the cable company advertise an untruthfully lower price.