We’ve all heard the phrase, “too good to be true.” Well, these days shoppers are experiencing that when they find low advertised prices often come with junk fees — and consumer complaints are increasing. The White House says these fees cost consumers billions each year.
Earlier this year, North Carolina Attorney General Josh Stein joined other AGs in supporting a Federal Trade Commission rule to rein in the deceptive pricing practice. Kevin Anderson, senior counsel for consumer protection in Stein’s office, talks to WFAE’s Gwendolyn Glenn about the office’s fight against add-on fees.
Kevin Anderson: The problem with these junk fees is they sometimes trap consumers into purchasing items when they otherwise wouldn't have purchased them, because they thought the price was lower originally than it turned out to be.
Gwendolyn Glenn: How would you define the junk fees? What qualifies?
Anderson: Fees that are the company’s fees — and not, for example, taxes. And then in connection with the junk fee issue, there's this issue of are they being properly disclosed or not? And then sometimes there are also issues about companies sometimes misrepresenting the nature of the fees and, for example, giving the impression that they are government-imposed fees when, in fact, they're just fees the company is imposing themselves on the consumer.
Glenn: Give me a specific example of a consumer not knowing they are being charged these fees. What kind of examples have you seen?
Anderson: So, one example would be a consumer going to make an online purchase, seeing a price upfront, and then they get to the checkout — and then they see a $5 maintenance fee, a $3 service fee, and then suddenly the price of a $10 item instead of being $10, has gone up to $18. This type of thing is happening, whether it's just typical online purchases, travel-related purchases, concert tickets, moving costs. You know, they're all sorts of different examples that you could look at there.

Glenn: Yeah, because I have experienced, say for instance, when I use my credit card at a restaurant or some retailers, there is a charge for using a credit card that I never experienced before.
Anderson: Some merchants these days are charging consumers if they [pay by] credit cards. That fee is being imposed by the merchant.
Glenn: Yeah, because I had on one restaurant bill 3%. And I assumed it was not for a tip, because a tip would be more than 3%. But then it was explained to me that was for what the credit card companies charge them. But, in the past, that was just a part of doing business, correct?
Anderson: That's right. I think they typically weren't broken out that way in the way that you describe. And it's unfortunately become more commonplace these days for sellers to break out different types of fees, that just being one, one example.
Glenn: Yeah. And I've seen people complaining about, you know, in the past, you go to a restaurant, things like water and bread, no charge. But now they are sometimes charges for those things. And they show up on the bill, but some people are kind of surprised. And some people just overlook it. Where are you seeing more fees pop up? Is it at restaurants? Is it, is it at hotels? Where?
Anderson: Concert tickets is one action we've taken in our office. In connection with that, is we sued — along with some other states — Live Nation and Ticketmaster earlier this year. And it's a competition antitrust-related lawsuit. But part of the aspect of that suit is that their market power and lack of competition, we allege, allows them to add additional fees. The ticket legislation in North Carolina goes into effect January of next year. It became law a few days ago.
Glenn: What will change with this law being in effect?
Anderson: In general, it requires ticket sellers and ticket resellers to disclose the total price of tickets, including all mandatory fees upfront — and so they can’t hide the fees until the end of the purchase. You know, we've taken action also against a finance company earlier this year — Mariner Finance — that we alleged was imposing some junk fees on consumers’ insurance-related products that weren't disclosed properly. So, again, it's an active area.
Glenn: So what is your advice to consumers? Because as you said, these fees are out there and they seem to be proliferating. What would you advise consumers to do?
Anderson: One would be just to read things carefully when you're purchasing items. And, in particular to be on the lookout for fees with general ambiguous labels, like I mentioned earlier — maintenance fees, service fees.
And, in particular, if it's an in-person type of transaction, I think the consumer should always feel free to ask the company why certain fees are being imposed. If they don't think the fee is appropriate, ask the company or seller to remove the fee from their bill. And you know with online purchases, the consumer also has the ability to just walk away from the transaction.
Glenn: For those kinds of situations where you just can't cancel the transaction, walk away. What do you suggest?
Anderson: They can always file a complaint with our office, and then we'll interact with the company and see if we can get the consumer their money back. You can file a complaint at https://ncdoj.gov/file-a-complaint/consumer-complaint/ or call 877-5NOSCAM, 877-566-7226.