New Laws coming soon that will protect consumers and take away massive fees for companies.

By N.A. Pagliara, Esquire of Pagliara Law Group, P.A. posted in Consumer Law Blog on February 10, 2023.

The act applies to travel and entertainment industries to take fees away from companies and protect consumers with more transparency and fairness.

No more sneaking in fees afterwards and overcharging. 

What are ‘Junk Fees”

Junk fees are those hidden charges many businesses use to make you pay more and allow them to profit more.  It stifles competition with other businesses as well. 

These fees don’t matter to the wealthy but add up for normal households and will save Americans $9 million. 

FIRST- CONSUMER FINANCIAL PROTECTION BUREAU (CFPB)

CFPB will propose a rule to eliminate excessive credit card late fees under the power of the CREDIT CARD ACT OF 2009 

• that will  reduce the late fees from $30 to only $8, saving $9 billion a year in late fees.
• They will also ban surprise overdraft fees – fees charged for overdrawing a checking account even though at the exact moment of the purchase there appeared to be available funds – and surprise depositor fees charged when you deposit someone else’s bounced check.

SECOND-DEPARTMENT OF TRANSPORTATION (DOT) 

• Proposed a rule to require airlines and booking services to show the full and complete purchase of a plane upfront including baggage and other fees not after the fact with expensive add ons.  
• Proposed policies when flights are delayed or canceled due to issues under the airlines’ control, leading 9 airlines to change policies to guarantee coverage of hotels and 10 airlines to guarantee coverage of meals, none of which was guaranteed before.

THIRD – FEDERAL COMMUNICATIONS COMMISSION  (FCC)

• Proposed a rule next year to require broadband providers to use “nutrition labels”—similar to similar to the ones used for food products—to illustrate vital information to consumers about internet service options in an readily available format. This information featured will include prices, speeds, data allowances, and any additional fees charged.

FOURTH – ADDITIONAL JUNK FEE PREVENTION ACT PROTECTIONS COMING

• Regulate excessive online concerts, sporting events and other entertainment fees  Specifically, the to prohibit excessive fees, require the fees to be disclosed in the ticket price, and make it mandatory to disclose ticket holdbacks that reduce available supply.
  • Many online ticket sellers impose massive service fees at check-out that are not disclosed when consumers are choosing their tickets. In a review of 31 different sporting events across five ticket sellers’ websites, service charges averaged more than 20% of the ticket’s face value, and total fees—like processing fees, delivery fees, and facility fees—reached up to more than half the cost of the ticket itself. A family of four attending a show could end up paying far more than $100 in fees above and beyond the cost of the tickets  (source Whitehouse)

• Ban airline fees for family members to sit with young children. 
  • Many airlines today charge a fee to select a seat in advance, including for those traveling with children. Parents can find themselves unexpectedly not seated with their young child on a flight or paying large fees to sit next to their children. The President believes no parent should have to pay extra to sit next to their child. (source White House).
  • In July 2022, the DOT issued a notice stating that it is the Department’s policy that U.S. airlines ensure that children who are age 13 or younger are seated next to an accompanying adult with no extra charge, but still no airline guarantees fee-free family seating. DOT will publish a family seating fee dashboard and launch a rulemaking to ban the practice. The President is calling upon Congress to fast-track the ban on family seating fees so that the DOT can crack down on these practices more quickly than through rulemaking. (source White House).

• Eliminate exorbitant early termination fees for TV, phone, and internet service. 

The President urges Congress to eliminate these excessive early termination fees so that companies can no longer lock in customers and must truly compete with each other on the basis of price and quality. Cable TV, internet, and mobile phone providers have “early termination” fees that consumers must pay if they want to switch to another provider. These fees can exceed $200. Early termination fees are costly for consumers and undermine economic dynamism by making it harder for innovative companies to win a toe-hold in the market by encouraging customers to switch. And these providers often charge people when they’re most vulnerable—people who are forced to move because of a job loss or other financial downturn, for example, may be slammed with hundreds of dollars in early termination fees. (source White House). 

• Ban surprise resort and destination fees.  

The President urges Congress to ban these surprise fees by requiring that hotels include them in the price of the room, so consumers aren’t surprised. Travelers should know which hotels charge these fees and which ones do not, so that they can plan and budget accordingly.

When families set their budget for a vacation, they expect that the hotel price they see is the price they will pay. But many travelers encounter surprise “resort fees” or “destination fees” when they check out or at the end of a lengthy online reservation process. These fees harm consumers by preventing them from the seeing the true price when they pick out a hotel and by limiting their ability to comparison shop. Over the past decade, a growing number of hotels have imposed these fees on consumers, which can be $50 or more per night. More than one-third of hotel guests report having paid such fees. And the total costs for Americans are enormous: according to one report, hotels collected billions in these fees and surcharges in 2018. (source White House).

AUTHOR: Nicholas A. Pagliara, Esq. Founder, Chairman of the Board and Managing Attorney of Pagliara Law Group, PA.

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Tags and Topics: New Laws, Congress, Airlines, Consumers, Junk Fees, Consumer Law