It’s Time to Eliminate “Junk Fees”
Advocacy groups call on Consumer Bureau to take action
In response to a call for comment on junk fees in the consumer finance industry, a number of consumer advocacy groups sent a letter to the Consumer Financial Protection Bureau (CFPB) detailing junk fees across a range of industries and services. The groups also called for specific actions to protect consumers from these fees.
The groups submitting the letter included Americans for Financial Reform (AFR), National Consumer Law Center (NCLC), Center for Responsible Lending (CRL), Consumer Federation of America (CFA), and the National Community Reinvestment Coalition (NCRC).
The letter notes:
It has become increasingly common for businesses to deceptively increase the cost of goods and services through hidden or obscured fees, often presented after the consumer has committed to a transaction. The cost of junk fees almost always exceeds the cost of the service or activity that triggers them. Using well-honed techniques and marketing research, companies obscure the fee, trick the consumer into accepting it, or force them into a position where they cannot say “no.” Junk fees can also lead to perverse incentives where banks and other companies push practices that are at odds with their customers’ financial health, setting…
