White House, states tackle ‘junk fees’ that inflate costs

States urged to use laws already on the books to end abusive acts and practices

WASHINGTON — The White House brought together state lawmakers, federal officials and others Wednesday to trade ideas about how to fight “junk fees” that inflate the cost to consumers of everything from hospital visits and airline tickets to student loans and concert seats.

The virtual meeting follows President Joe Biden’s pledge in February to work with state and local officials to identify ways to crack down on such fees. A Government Accountability Office report from 2018 on event ticket sales found that primary ticket providers charged fees averaging 27% of a ticket’s price.

The director of the Consumer Financial Protection Bureau, Rohit Chopra, encouraged state lawmakers to use consumer protection laws already on the books.

“States can enforce a prohibition on certain abusive acts or practices,” Chopra said. “These words might seem like obscure legal concepts, but they’re really about making sure there’s fair market dealing that prices are upfront and clearly disclosed, but also that consumers have a chance to avoid those fees if they don’t actually want that service.”

The bureau, the nation’s financial watchdog agency, was created in 2011 after the Great Recession.

A lack of transparency in pricing is bad for businesses and consumers because it encourages companies in the same industries to begin to hide fees in order to compete and creates a “race to the bottom,” said Lael Brainard, who recently took the helm of the National Economic Council after serving as vice chair of the Federal Reserve.

“Excessive fees hurt the companies that want to be good actors and that want to price transparently,” she said.

State lawmakers on the call shared examples of how they pursued efforts to eliminate specific junk fees.