WSJ Your Money Briefing - Junk Fees Are Easier to Spot… But Still Hard to Avoid

Episode Date: September 18, 2024

In the wake of a crackdown on so-called junk fees, more companies are making the unpopular charges easier for consumers to spot. But the fees still aren't going away. Wall Street Journal reporter Allison Pohle joins host J.R. Whalen to discuss why, and what consumers can do about them. Sign up for the WSJ's free Markets A.M. newsletter.  Learn more about your ad choices. Visit megaphone.fm/adchoices

Ecolab Water for Climate. Less water, more growth. Results will vary. Learn more at Ecolab.com slash EWC. Ecolab Water for Climate. Transforming the way the world thinks about water. Here's your money briefing for Wednesday, September 18th. I'm JR Whelan for The Wall Street Journal. September 18th. I'm JR Whalen for the Wall Street Journal. There have been widespread calls to eliminate junk fees. You know, those charges that get tucked into the bottom of your hotel bill or plane ticket. The good news, those fees are now a lot less hidden than they used to be. The bad news,

you're stalling the hook for them. After many years of feeling frustrated at that checkout screen, some consumers say even just seeing the total price from beginning to end feels like a win. They don't feel duped, but at the same time there are some other people who wish that they had gone farther. We'll talk with our travel reporter Alison Pauley about what else is being done about junk fees and what you can do about them on your next trip after the break. How to Stop Losses Work on Kraken

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Alison, fees get tacked onto a lot of prices we see, but what are junk fees? Junk fees are those ambiguous, vague charges that come at the end of your bill that you're not totally sure what they're for. You might see it at the end of a hotel bill, there will be a resort fee, but you don't really know what you're getting for that resort fee. It could be $40 a night. It could be $70 a night. You might see it at the end of a rental car transaction where there is a service fee added to the bill, but there's no specification about what that service fee is for. What do companies say is the reason for these fees?

Companies do say that there are benefits given with these fees. So with a resort fee, for example, a hotel might say this includes access to the pool or the fitness room or a food and beverage credit. And so we're giving you things along with charging this fee where consumer advocates argue that those things that are given, for example, should be included in the initial price that consumers

see. Last year in his State of the Union address, President Biden called for a ban on these fees. We're going to ban surprise resort fees that hotels charge on your bill. Those fees can cost you up to $90 a night at hotels that aren't even resorts. What kinds of laws have been passed? Since then, there's been a bunch of regulations from various angles. So, for example, the transportation department has taken a look at fees related to airlines. So they're looking closely at seat assignment fees because families

want to be able to sit together without paying a bunch extra for that. They're also looking to make fee displays more transparent in terms of checked bags or the cost to change or cancel a flight. So there are federal rules that have been proposed along those lines, but there are also bills on the state and national level. In California, for example, two bills went into effect that target mandatory fees. So these are fees that you have to pay. They're not optional. And the California bills are saying that these fees that consumers must pay when they check

out have to be disclosed from the time the initial price is advertised. So are people actually seeing a lower price as a result of these rules? They are not and so the California Attorney General put out some guidance that said this isn't meant to affect the price it's not meant to make sure prices are higher necessarily or lower necessarily it's just meant for people to know exactly what they're paying so they're not surprised by added fees at the end of their transaction. Has it raised questions whether these fee transparency rules are actually helping consumers?

After many years of feeling frustrated at that checkout screen. Some consumers say even just seeing the total price from beginning to end feels like a win. They don't feel duped. But at the same time there are some other people who wish that they had gone farther. But it gets into a whole other area of regulating private businesses and what they're allowed to charge. Do the rules and laws being proposed or actually passed only apply to travel? They apply beyond travel. One of the California bills applies specifically to hotels, motels, short-term rentals, and online travel agencies. Another bill that was passed is most

businesses. So they say most because there are some exceptions. Restaurants got a carve out in that bill and so did rental car companies. And so across the board people should know how much things cost from the very first time they see the price but as with anything there are exceptions. Is there anything travelers can do to avoid paying these fees? A lot of travelers have successfully negotiated or gotten out of the fees if they're able to

prove that they haven't gotten the service that they're intended for. So for example, sometimes you'll find a wifi charge at a hotel and maybe the wifi wasn't working well, or maybe you just dropped your bags off, went to bed and then checked out the next morning and didn't even use the Wi-Fi. It's possible to negotiate your way out of those fees, but the work really is on the

consumer to do that, to notice the charge, to look closely at the bill and to make sure that you raise those issues before you check out. For people who can't avoid the fees, how can they plan for the expense of junk fees? So the good news is prices are getting more transparent in the sense that the fees should be listed up front. So there's national legislation that's been proposed, but in response to these bills and to lawsuits that have been directed at them, companies have started showing the full price ahead of time. So if you do log on to look for a hotel stay,

you should be seeing the total price, even if you're not in California, especially if you're looking at a big chain like Marriott or Hilton. But it's always good to look closely and to keep in mind that the price that you see from the initial point could be increased by about 10% if you're going with a smaller hotel company for example, or if you're looking for a rental car, add about 10% in your head so you won't be shocked by that cost. But hopefully there's a light at the end of the tunnel for consumers and things are becoming a little bit more clear. That's WSJ reporter Alison Poley, and that's it for your Money Briefing. This episode was

produced by Ariana Osborne with Deputy Editor Chris Zinsley. I'm JR Whelan for The Wall Street Journal. Thanks for listening.