WASHINGTON, Oct 26 (Reuters) - President Joe Biden pledged on Wednesday to crack down on surprise fees consumers are forced to pay on cable bills, hotel rooms and concert tickets, while U.S. financial regulators declared bank fees for bounced checks and overdrafts unfair.
"These are junk fees," President Joe Biden told reporters at the Eisenhower Executive Office Building. "They benefit big corporations. Not consumers. Not working families. And that changes now."
Biden signaled his administration would look at concert tickets, hotels and airfares shortly after the U.S. Consumer Financial Protection Bureau (CFPB) issued guidance that surprise overdraft fees and unexpected depositor fees for bounced checks are likely unlawful.
The White House said the move could eliminate billions in banking fees.
Overdraft fees can catch consumers off guard when their online accounts still show a positive balance, while some customers may find they owe a fee for depositing a check that they did not know was bad, the CFPB said.
The agency said that both fees likely violate the Consumer Financial Protection Act's prohibition on unfair fees that are unavoidable to consumers.
In a fact sheet, the White House noted that bank overdraft and non-sufficient funds fees accounted for an estimated $15.5 billion in revenue for banks in 2019.
[1/4] Rohit Chopra,?Director of the?Consumer Financial Protection Bureau, listens as U.S. President Joe Biden delivers remarks on the U.S. economy from an auditorium on the White House campus in Washington, U.S. October 26, 2022. REUTERS/Jonathan Ernst 1 2 3 4
Pressure by the regulator pushed revenue from such fees down 90% at Bank of America this summer.
Biden added that the Federal Trade Commission had started work on a rule last week to crack down on "unfair and deceptive fees across all industries."
He cited processing fees for concert tickets and resort fees at hotels as two items his administration is examining.
"We're just getting started. There's tens of billions of dollars and other junk fees across the economy that I'm directing my administration to reduce or eliminate," Biden said.
"We applaud President Biden's advocacy for fee transparency in every industry, including live event ticketing," Live Nation Entertainment Inc (LYV.N) said in a statement.
"This only works if all ticketing marketplaces go all-in together, so that consumers truly have accurate comparisons as they shop for tickets." Shares of the company, which owns Ticketmaster, fell 4% on Wednesday.
Biden's remarks follow a meeting the White House Competition Council held last month, in which he ordered federal agencies to take steps to reduce or eliminate hidden fees, charges and add-on costs, which he said were weighing on family budgets.
The administration has come under intense pressure to tamp down inflation that has hit four-decade highs.
Editing by David Holmes and David Gregorio
Our Standards: The Thomson Reuters Trust Principles.
linuxpiper on October 27th, 2022 at 00:15 UTC »
I closed a checking account once at a well known bank. A few months later, I get a letter from them that I had $500 in overdraft fees since there were still a few auto-renew services that hit it after I closed the account (and naturally when you close an account, there is no money in it).
I said "but I *closed* the account, so why would you let charges go through?" "That's just how we do it. You have to pay the fees or it will go to collections".
Absolutely no recourse whatsoever. I hate banks and these stupid fees.
Edit - bank hack tip: if you are ever in this situation where you are going to close your checking account, make sure you report your debit card as lost or stolen before you close your checking account. That way, if you miss an auto-renew service that you forgot about that was tied to your card, and your bank's policy is to re-open the account and let the charge go thru (which create overdraft fees), you won't get screwed like I did.
IxI_DUCK_IxI on October 26th, 2022 at 21:46 UTC »
Great step forward. I've always loved the "911 Service Fee" on your cell phone bills that's mandatory but doesn't go towards 911 (Which is state funded). We need more of this spotlight on junk billing and agree we need to provide services that provide value to the customer, not junk fees just to raise profits for corporations. "Innovative Billing" where they offer nothing new, but for some reason, you're getting billed to use the same service you did when you signed up.
atomsk29 on October 26th, 2022 at 21:07 UTC »
I want backpay for all those junk fees over the years.