A close-up picture of Joe Biden. Joe Biden said to pass the Junk Fee Prevention Act. A close-up picture of Joe Biden. Joe Biden said to pass the Junk Fee Prevention Act.

President Biden’s Push: Propelling The Junk Fee Prevention Act

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. 

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

  • Extra charges for online concerts, entertainment, and sports events.
  • Excessive charges in airlines 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 takes place 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 first direct or honest price, 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 who are buying an event or concert ticket online will initially view a low-price ticket while making comparisons with other websites.

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

Biden introduces Junk Fee Prevention Act during State of the Union address

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 give options to order food from your nearby or local restaurants or stores. People who use these applications end up paying the initial price of the food and also extra charges that are added at the checkout.

When the consumers sign up on the account, fill up the card information, and click on to order. Examples of such drip pricing are 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 any such hidden charges, then please keep track of this situation.

And consider changing your policies before The Junk Fee Prevention Act gets passed by the Biden Administration.

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