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(CNN) — President Joe Biden on Wednesday unveiled new efforts to crack down on junk fees while announcing $2 billion in savings and $140 million in consumer refunds from previous crackdowns on junk fees from the Consumer Financial Protection Bureau.
“Folks are tired of being taken advantage of and played for suckers,” Biden said during remarks in the Rose Garden.
“Unfair fees known as junk fees – those hidden charges that companies sneak into your bill to make you pay more because they can. Simply because they can. Charges that are taking real money out of the pockets of American families. These junk fees can add hundreds of dollars weighing down family budgets, making it harder to pay family bills. These junk fees may not matter to the wealthy, but they sure matter to working folks in homes like the one I grew up in,” he added, arguing that the moves will give Americans “breathing room.”
The Federal Trade Commission unveiled a proposed rule that the Biden administration says would ban businesses from charging hidden or misleading fees and require companies to show full prices upfront, preventing event ticketing companies, hotels and lodging companies, apartment and car rental agencies, and more from levying surprise or unexpected service charges.
“If this proposed rule is finalized as proposed, the FTC would have the power to impose financial penalties on companies that don’t disclose their full upfront price and secure refunds for customers who have been defrauded by companies charging hidden fees,” he said.
According to an official, the proposed junk fee rule would not limit what sellers can charge, but would require that vendors, including ticket sellers, disclose final costs upfront.
“We want companies competing on price, not on their ability to hide prices from consumers,” the official said. “So what our rule would do is require upfront pricing, so that consumers can look for the ticket seller with the best deal and an honest business and have a fair chance to compete.”
The official, speaking before the announcement, noted that while it’s already illegal for companies to hide fees on the back-end of sales, the administration stands prepared to bring enforcement action against companies charging excessive fees, so “firms should not wait for a rule to be finalized, they should act now to ensure they’re in compliance.”
In addition, the CFPB will take steps to prohibit large banks and credit unions from charging consumers for basic services like checking bank account balances, obtaining a payoff amount for a loan, or getting account information needed for applications.
A proposed rule from CFPB would also require banking institutions to allow consumers to securely send transaction data to other companies, making it easier for customers to switch providers to “ensure financial companies compete based on service quality and up-front pricing, deterring junk fees.”
Biden also noted that the CFPB “is banning bank fees and credit unions from charging fees for basic service like checking your account balance, retrieving old bank records, or looking up your balance on a loan,” calling those fees “outrageous.”
“These fees are now illegal,” Biden said, adding that there are “tens of billions of dollars in other junk fees across the economy” and he’s directed his teams to crack down there, as well.
This story has been updated with remarks from President Joe Biden.
The-CNN-Wire
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