By Kim Lyons | Pennsylvania Capital-Star
Credit: PA Internet News Service
A new report on from U.S. Sen. Bob Casey (D-Pa.) zeroes in on junk fees, the mandatory fees consumers pay on top of the prices they pay for goods or services.
“Junk fees are pervasive—appearing on everything from basic necessities to luxury purchases— and they’re negatively impacting families in Pennsylvania and across the Nation,” according to the report, titled “Additional Charges May Apply.”
The report presents a “day in the life” of a couple who encounter numerous junk fees for everyday transactions— like paying an “out-of-network” fee for using an ATM, and an “activation” fee for signing up for new internet service.
The Biden administration has attempted to crack down on junk fees over the past several months, after President Joe Biden called on federal agencies to come up with a plan for lowering and disclosing junk fees at a White House Competition Council meeting in September 2022.
In February of 2023, Biden devoted a portion of his State of the Union speech to his agenda on lowering junk fees. He said that although these costs may seem small to some, they are burdensome to many households.
In October, the Federal Trade Commission proposed a rule that would ban businesses from charging “hidden and misleading” fees, and require them to tell customers the full price up front.
And last week, the Consumer Financial Protection Bureau proposed a rule that would reduce the overdraft fees banks charge customers, which the CFPB estimated brings in billions in revenue for banks each year.
House Republicans have criticized the proposed rule, saying it would “limit consumer choice, stifle innovation,” and raise banking costs for consumers. And banking groups, including the American Bankers Association and Consumer Bankers Association, oppose the rule, claiming that it will make it harder for consumers to obtain credit cards and that consumers will be forced to turn to payday loans, which will end up costing them more money.
The new report from Casey is the senator’s latest look into “greedflation.” Previous reports from his office looked at the ways corporations drive up prices to achieve record profits, often by raising prices on everyday products.
On Jan. 11, Casey sent a letter to the Government Accountability Office (GAO), requesting the Congressional watchdog “examine the effects of corporate greed on American consumers” and seek transparency measures the federal government can use to help consumers more easily identify the practices of greedflation and shrinkflation.
“Corporate strategies to hide price increases and raise the unit cost of everyday items like food and household products are hurting families in Pennsylvania,” Casey wrote in the letter. “The American people should not have to tolerate corporate executives squeezing them for every last nickel and dime.”
States Newsroom national reporter Casey Quinlan contributed.
