Junk fees: How to avoid them or fight them
Many consumers see junk fees in various forms. Some people use junk fees as a catch-all phrase for any charge they don’t like. The topic is certainly getting attention these days, with the White House talking about a new crackdown, buzz about a Junk Fee Prevention Act that could be introduced in Congress and new rules expected from the Federal Trade Commission (FTC).
There are three simple definitions of a junk fee:
- Mandatory charges that aren’t disclosed up front. It could be a “resort fee” slid in just before you book a hotel room, a required company charge added to monthly cell phone bill, or a service fee you can’t avoid when purchasing an event ticket. Many companies are guilty of “drip-pricing” – prices that don’t include everything you must pay.
- Optional charges that are portrayed as mandatory or are given official-sounding names to deceive consumers or discourage them from questioning the fees.
- Mandatory fees or charges buried in an unreasonably long terms and conditions document. You might expect a 10-page document for a car loan, but not to book an airline ticket.
Here’s some simple advice to protect yourself from junk fees:
- Read everything before you pay, sign, initial or agree.
- Don’t sign or agree to anything that you didn’t actually read.
- If there’s something you don’t understand, ask what the fee is for. Getting a clarification in writing (or via email) is better.
- Don’t be afraid to walk away or from the transaction if you don’t like the extra fees.
- Pay by credit card. Never by debit card. Undisclosed fees are easier to dispute with a credit card. And debit cards expose your whole checking account to all kinds of additional problems.
- Note the names of anyone you talk with. Put a note in your calendar or send yourself an email of the day and time of day when you talked with the person. It helps you fight a fee if you can document that you talked with this person on this day and were told this.
- Keep copies of all receipts, agreements, emails, texts.
- If you’re hit with an undisclosed or misleading fee, complain to the company and file a complaint with your state attorney general’s office of consumer protection or the FTC.
Consumer Watchdog, U.S. PIRG Education Fund
Teresa directs the Consumer Watchdog office, which looks out for consumers’ health, safety and financial security. Previously, she worked as a journalist covering consumer issues and personal finance for two decades for Ohio’s largest daily newspaper. She received dozens of state and national journalism awards, including Best Columnist in Ohio, a National Headliner Award for coverage of the 2008-09 financial crisis, and a journalism public service award for exposing improper billing practices by Verizon that affected 15 million customers nationwide. Teresa and her husband live in Greater Cleveland and have two sons. She enjoys biking, house projects and music, and serves on her church missions team and stewardship board.