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Can Consumers Finally Claim Victory Over Junk Fees?
A series of announcements offers hope
Your bank wants your money.
Not just the money you have on deposit. Not just the money you pay them for a loan or credit card.
Your bank wants ALL of your money.
It turns out, some banks will go to any length to get your cash — even charging illegal fees.
“The CFPB continues to uncover junk fee scams that violate the law and undermine consumer trust,” said CFPB Director Rohit Chopra. “We will continue to combat the illegal fees cropping up in consumer finance markets.”
That’s why a pair of announcements from key regulators should have customers cheering.
First, the CFPB is taking steps to limit the fees big banks can charge.
The CFPB issued guidance that prohibits charging fees for basic customer service, such as requesting written documentation of account status or written copies of account agreements. The guidance also gives banks until the end of February 2024 to come into compliance before fines or penalties will be assessed for violation of the new rule.
The Federal Trade Commission (FTC) also got in on the act, taking additional action against junk fees in a range of arenas — hotels, tickets, banking, and more.
The new rule takes two steps that the FTC says will result in a reduction or elimination of most junk fees:
The proposed rule would prohibit businesses from advertising prices that hide or leave out mandatory fees
The rule would prohibit sellers from misrepresenting fees and require them to disclose upfront the amount and purpose of the fees and whether they are refundable
So, today is a good day for consumers as tangible steps are being taken to give them a fighting chance in the financial marketplace.
I’ve written a lot about bad news banks like Wells Fargo.
Here’s some more consumer news:
