Convenience fees, seat-selection charges, universal fund surcharges—all you wanted was an aisle seat in coach! It’s estimated that Californians pay about $28 million a year in hidden charges that businesses sneak onto bills hoping consumers won’t notice they’re being dinged an extra 3% here, 5% there.
Death by a thousand paper cuts? Try bankruptcy by a thousand junk fees.
With that in mind, North Bay state Sen. Bill Dodd (D-Napa) cosponsored a bill in the state legislature last month that would outlaw such hidden charges on consumer purchases.
Introduced in partnership with Attorney General Rob Bonta and Berkeley state Sen. Nancy Skinner, SB 478 would prohibit such deceptive practices as advertising a certain price and then adding on mandatory charges that are controlled by the business. Companies that fail to comply with the new rules could be subject to steep financial penalties.
Dodd described it as a matter of “put(ting) the consumer first” as well as leveling the playing field for businesses that advertise the true price upfront. The bill passed the state Assembly in September and was next headed to the governor’s desk for signage.
The proposed legislation was inspired by President Biden who, in his State of the Union speech last February, called out such junk fees and proposed federal agencies put a stop to them (within their regulatory authority, that is). It’s estimated that 85% of Americans have paid hidden fees totaling about $28 billion per year, according to Dodd’s office.
As AG Bonta put it in his statement of support: “The price consumers see should be the price consumers pay.”—Jason Walsh
Egregious junk fees
Here are a few of the more infamous hidden fees that consumers are often surprised by:
- Resort fees: Assumed the $250 for your hotel room covered the various amenities, like the hotel pool and gym? Nope, a separate “resort fee” may pop up on your bill for those, whether you use them or not.
- Event fees: Exorbitant concert ticket prices for entertainers from Taylor Swift to the Boss have made headlines this year thanks to companies like StubHub and Ticketmaster tacking on a slew of hidden charges that increase the end price by 20% or more.
- Convenience fees: When you pay a bill, the company might charge you a fee for it—how convenient… for them.
- Mortgage fees: Anyone who’s purchased a home or refinanced a mortgage ends up faced with a laundry list of itemized fees at the close—many of them unnecessary and some of them ongoing. But at the end of a $700,000-plus (or whatever) transaction for the loan, the lender is hoping you won’t notice a few more hundred greenbacks slipped into the total.