The Junk Fee Prevention Act, if passed, will make it unlawful for companies to impose various hidden charges. In a recent tweet, Joe Biden tweeted,

“Hidden junk fees – like processing fees on concert tickets – are a pain. They’re unfair and add up. Congress, it’s time to pass the Junk Fee Prevention Act.”

The Junk Fee Prevention Act will prevent companies and businesses from charging hidden costs or “junk fees” on various services.

It is important to know that these types of junk fees collect large amounts of money from the American People.

For American citizens, the economic situation is already in bad shape. Plus, inflation is showing no mercy on common people, and thus, the cost of living keeps getting elevated.

When Americans are already having difficulty with the ongoing inflation, then this junk fee makes it nothing but worse.

1. Know All about Junk Fee Prevention Act

The Biden Administration even issued a fact sheet explaining the government’s junk fee measures and actions.

The declaration was made with nonprofit groups like the Consumer Financial Protection Bureau. 

Hidden junk fees – like processing fees on concert tickets – are a pain.

They’re unfair, and add up.

Congress, it's time to pass the Junk Fee Prevention Act.

— President Biden (@POTUS) May 23, 2023

The Junk Fee Prevention Act will have four types of hidden charges: 

• Extra charges for online concerts, entertainment, and sports events.
• Excessive airline charges for families flying or traveling together.
• Cancellation/ termination charges for television, internet connections, and telephone.
• High charges are imposed on resort fees.

2. Drip Pricing 

A clear appearance of junk fees occurs when companies or businesses use “drip pricing.”

Drip pricing is when more charges are imposed or dipped when buyers shop for something. 

In simple words, the buyer will see a direct or honest price first, but later, they are confronted with a much higher and hidden genuine price. And this drip pricing happens at the end of the purchase.

For instance, consumers buying an event or concert ticket online will initially view a low-price ticket while comparing it with other websites.

But here comes the drip pricing: consumers see the final charges that include service prices after filling in their card details at checkout.

3. How Drip Pricing Works in Food Delivery 

Food delivery service is also a good example to understand drip pricing systems. The widely accepted status of various mobile applications and websites is often used to order food.

These apps and websites allow you to order food from nearby restaurants or stores. People who use these applications end up paying the initial price of the food and extra charges added at the checkout.

When the consumers sign up for the account, fill out the card information and click on to order. Such drip pricing includes delivery charges, service costs, and tax.

4. Final Words

There is no doubt that these so-called junk fees are a topic of debate now. If your organization/company also charges such hidden charges, please keep track of this situation.

And consider changing your policies before the Biden Administration passes The Junk Fee Prevention Act.