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HIDDEN BATTLE: The unheralded fight that Biden is waging to lower US consumers’ bills

HIDDEN BATTLE: The unheralded fight that Biden is waging to lower US consumers’ bills

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Undoubtedly you’ve experienced the feeling: You go to buy a car or hook up your internet service, or just pay for your cell phone, and you find out the bills are considerably higher than you expected – higher than was advertised.

Probably, like many of us, you’ve wondered how this isn’t false advertising – how companies manage to get away with it.

And the reason, you realize, is that there are two types of crimes in this world: the illegal and the legal.

Simply put, sometimes things that should be crimes are not. Or perhaps it’s just a matter of proper interpretation and enforcement.

When Republicans are in office, don’t expect much of either if it goes against big business.

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As economist Robert Reich has frequently noted, there really is no such thing as laissez-faire, despite Republican claims to the contrary: the government is always involved in some way or other; it’s just about the rules that it sets and who those rules favor.

For many years now, companies have gotten away with these “junk fees” – fees that add no actual value to a product or service and that are often designed to be hidden, unavoidable, or inserted at the last moment.

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Though not many people seemed to notice, President Biden went on the offensive against such fees in the lead-up to the midterms, instructing the Consumer Financial Protection Bureau and the Federal Trade Commission to take actions to dissuade or even fine companies that apply them.

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In a statement issued last month, the administration noted that these ridiculous, nonsensical hidden fees can have extreme costs, often hitting those least able to afford them the hardest.

They calculated that credit card late payment fees total some $12 billion a year and that a substantial amount of this is junk fees.

There are typically about $15 billion in bank-generated “non-sufficient funds” (NSF) fees, many of which are applied surreptitiously, preventing consumers from making their accounts whole before a fee is applied.

The Financial Health Network found that low- to moderate-income families are almost two times as likely to be hit with NSF fees.

The administration also cited a CFPB estimate that found hidden fees from cable companies to be a whopping $28 billion (big shock there – thank you, Optimum).

One tactic is for companies to employ “drip pricing” – the practice of tacking on fees at the end of the buying process.

This takes advantage of consumers by only alerting them to certain fees when they’re at the very end of a long process and will likely agree to the extra money just to get done with things – essentially, subterfuge through exhaustion.

“These junk fees – they’re unfair and they’re hitting marginalized Americans the hardest, especially low-income folks and people of color,” the president said when announcing his intention to take action. “They benefit big corporations, not consumers, not working families.”

Since much of the president’s strategy involves directing federal agencies to propose new rules through administrative law – and to reinterpret old ones – he can avoid a Congress that, with the GOP taking over the House, is likely to be recalcitrant.

One Republican, retiring Senator Pat Toomey of Pennsylvania, has already lambasted the administration’s efforts, calling the CFPB an “out-of-control and unaccountable agency.”

Right, Pat – as opposed to Chase, American Airlines, GoDaddy, Hilton, Payday Loans, et cetera, et cetera, et cetera.

We wouldn’t want those poor innocent companies to suffer the burden of reasonable regulation, would we? Perish the thought!

Perhaps we should give you credit for one thing, though, senator: at least you’ve had the courtesy to retire before your brain goes completely to mush.

(Of course, that credit comes with an 8% dumbass fee and another 12% we’ll tack on at the end, just because we can.)

The free market, baby!

Ty Ross contributed research.

Help Ross go after the bastards by joining him on Twitter: @RossRosenfeld

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