Hidden and other unexpected fees on everything from hotel rooms to cellphone service to concert tickets are getting out of hand and should be fully disclosed to let consumers make better buying decisions, a leading consumer group said.
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The Consumer Federation of America is calling for the pocket-picking fees on goods and services to be included in ads and website pricing so consumers can comparison shop knowing total prices.
Some fees, like those for hotel rooms or tickets, show up only on the last page of an online transaction, and by then, many consumers acquiesce and just pay rather than conduct a whole new search.
The consumer group cited new reports by the White House’s National Economic Council (titled “The Competition Initiative and Hidden Fees”) and the Federal Trade Commission (“Economic Analysis of Hotel Resort Fees”) in calling for the incoming presidential administration to address this pocketbook issue.
“After an election campaign in which middle class, consumer pocketbook issues and abuse of corporate power played a big part,” Mark Cooper, the CFA’s director of research, said in a statement, “this is a perfect time for the new administration to start requiring all businesses to include mandatory fees in advertised prices.”
“The undisputed elements of free market competition are comparison shopping and knowing the true cost of goods and services before buyers plunk down their hard earned dollars.”
Among the fees often not disclosed until the consumer is in the final stages of a purchase cited by the National Economic Council in its report:
Hotel resort fees. These mandatory fees pay for hotelwide services such as free coffee or fitness center access and can add up to a significant portion of the total price.
Event ticketing fees. Service, processing or delivery fees and even instant download fees can amount to 20 percent or more of the base price of the ticket and are mandatory for all buyers.
New car fees. Some states regulate the fees that may be added at the dealership; others don’t. These include fees for documentation, floor plan or inventory, dealer preparation, advertising and destination, delivery or processing and can add hundreds of dollars to the final cost. Many consumers assume these are nonnegotiable.
Airline baggage and change fees. Under the federal full fare advertising law, airlines now have to provide information on the entire price of the ticket — including all taxes, fuel surcharges and facility charges — in their advertising, websites and e-ticket confirmations. But extra charges for things like luggage or ticket changes are not included in that up-front price.
Telecommunications fees. With names like regulatory cost recovery fee or mobility administrative fee, these extra fees sound official but are dollars the companies keep for themselves.
In a separate report on mandatory resort fees in the hotel industry, the FTC acknowledged that by breaking out resort fees from the rest of the bill, hotels are able to lower the commissions paid to travel bookers.
However, consumers are unable to opt out of these fees even if they don’t use the extra services.
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