The War on Junk Fees Just Got Wider
The FTC made a big splash on Wednesday with an announcement that it’s planning new rules to stamp out “junk fees.”
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It’s not just Ticketmaster that’s on the hook.
The FTC made a big splash on Wednesday with an announcement that it’s planning new rules to stamp out “junk fees.” While the usual suspects (Ticketmaster et al) loomed large, it looks like regulators are looking beyond conventional consumer gripes to bigger, more institutional industries.
I’m Stuck in Folsom Prison, and Fees Keep Pilin’ Up
Junk fees is a pretty broad term, but it generally refers to any mandatory fees that companies spring on you after showing you an initial, more enticing price tag. Historically, the biggest culprits in the public consciousness have been consumer companies like ticket sellers and airlines (remember free luggage?) but the FTC’s prospective rule goes far broader — including sections on the rental market, banking, and “correctional services fees.”
“Incarcerated people are a captive audience who are forced to pay excessive fees by
monopolistic or oligopolistic service providers in connection with private correctional services,” the FTC said:
- The services that incarcerated people are backed into include: “money transfers, release cards, and technology services, such as phone calls, emails, tablets, and music and e-book subscriptions, and that providers often charge fees far in excess of the cost of the services to the companies providing them.”
- While cracking down on junk fees is mostly about allowing consumers to make an informed decision about the sellers they’re engaging, the FTC is arguing that companies charging correctional services fees already benefit from a lack of competition because they have exclusive contracts with the prisons.
Horror Stories: The footnotes in the FTC’s notice contain direct commentary submitted from consumers that reveal an extensive list of consumer cautionary tales. In one case, a diner said a restaurant hit them with a nondescript “Economic Impact Fee.” Is that not just… inflation?