As part of his campaign against the so-called “junk charges,” US President Joe Biden announced a series of measures, while asking Congress for a law to end this type of “improper charges that exploit people.” “.
Biden, from the Rose Garden, appeared accompanied by the president of the Federal Trade Commission (FTC), Lina Khan, and the director of the Consumer Financial Protection Bureau (CFPB), Rohit Chopra.
During the conference, given on October 11, they revealed new policy proposals from the two agencies aimed at banning junk rates in certain sectors. The President announced the measures and discussed the progress of some initiatives to control tens of billions of surcharges linked to the financial and banking sector, as well as airline measures.
WHAT’S OUT OF JOE BIDEN’S STEPS AGAINST “JUNK CHARGES”?
US President Joe Biden indicated that the Federal Trade Commission (FTC) is proposing a rule that, if passed as proposed, “will prohibit companies from charging hidden and deceptive fees and require them to show total the price of customers.” Companies are also required to disclose in advance whether the payment is refundable.
Biden noted that, over the past two years, his administration has taken, with the help of members of Congress, “a series of steps to end unfair and fraudulent bank waste fees; Hotels; concert; airlines; rental house; wire; Internet; healthcare”.
In that sense, he emphasized that junk charges take advantage of people: “Without knowing it, a person can pay up to 20% more than they would have paid if they had seen the total price in advance and compare it with Other options. . That’s wrong”.
The goal is to have no surprise payments. Even after the measures were approved, the President asked Congress to approve the Junk Rate Prevention Law. “I’m asking Congress to act to make this a matter of law,” he said to applause.
“We are trying to do the right thing to compete with dishonest companies that deceive customers by making them believe that their price is lower when the truth is not,” said the President, who is considered “scandalous” that, for example, there. are banks that charge up to US$30 for giving a user their bank balance.
The FTC’s proposal would prohibit companies from hiding fees within a transaction and require them to disclose the amount and purpose of surcharges up front, which could save consumers more than $10 billion over the next decade, according to a report. statement from the White House. Under the rule, the commission can guarantee a refund to consumers if the rule is violated.
The head of state will also act on other “junk tariffs” worth tens of billions of dollars.
Airlines are starting to settle their “junk charges.” President Joe Biden explained that two summers ago, if your flight was canceled or delayed, almost no major airline would guarantee anything other than charging you a fee to rebook it. “Even if it’s your fault, you have to pay the fee to rebook. Now 10 airlines rebook for free.
He added that there are also voluntary changes by Airbnb and other companies to offer customers an all-inclusive price upfront so there are no surprises.
The Consumer Financial Protection Bureau aims to target big banks by promoting consumers’ rights to access complete, accurate and free information about their accounts, according to a 2010 federal law. .
In that sense, it would prohibit banks and credit unions from charging fees for basic services such as checking account balances; recovery of old bank records; or check the balance of a loan. “Some banks charge up to $30 for these services every time you call. It’s very unusual,” Biden said when the measures against financial entities were announced.
The CFPB will propose another new rule that will require banks to make it easier for customers to switch banks, something that banks have really struggled with and that will allow more competition. .
He mentioned that, as part of his administration’s progress, nearly two-thirds of the major banks have completely eliminated fees for bad checks. And that was a lot of money. “These bounced check bills for consumers are down by nearly $2 billion. “It’s a lot of money,” he emphasized. They also got $140 million in refunds for consumers who were charged illegal “junk rates. “