White House Declares War on Junk Fees, Surcharges

As a way to tackle inflation and give households financial breathing room, the President Joe Biden administration is taking action against junk fees — hidden cancellation charges and convenience fees added to some goods and services.

“[U]necessary hidden fees, known in the parlance as ‘junk fees,’ are hitting families at a time when they can’t afford it,” Biden said Monday (Sept. 26) in remarks at a meeting of the White House Competition Council. “…It hits middle- and working-class families especially hard.”

He added that he thinks no one should be paying these fees, but in today’s economic climate, the additional expense is a strain on household budgets that are already stretched by record inflation.

“A little over a year ago, I signed an executive order to promote competition with a goal of lowering prices for consumers and raising the wages of workers and encouraging innovation in the economy,” he said. “We made some real progress.”

Biden pointed to changes in the airline industry prompted by the Competition Council. The industry largely followed the practice of charging customers a fee to rebook flights canceled by the airline. The industry also didn’t cover meals or hotel rooms for customers stranded at airports due to flights canceled by airlines.

“Now nine airlines cover hotels and meals when you’re away from home and 10 rebook for free,” Biden said.

New mandates enacted by the U.S. Department of Transportation Monday require airlines to disclose upfront if they charge a rebooking fee for canceled flights.

“You know, it could have cost you up to $200 to have to rebook a flight, and that’s $200 you can pay your monthly bills or your electric bill or whatever for it with,” he said. “And that’s progress.”

The Competition Council is now tackling unfair termination fees some cellphone carriers charge customers who are changing providers. Biden said he expects the council to come back to him with a plan to reduce or eliminate the fees.

“That’s competition,” the president said in his remarks.

Read also:

Study Finds Hidden Surcharges Sour Consumers’ Impressions of Merchants

What Merchants Are Doing Wrong With Credit Card Surcharges