Ujifusa sponsors bill to prohibit hidden fees on consumer goods and services

 

STATE HOUSE – Warwick resident Pearl Holloway was excited to buy her grandchildren Harlem Globetrotter tickets whose lowest ticket price at an online site was $23.  After promising to take them, Pearl was horrified to learn that each of those tickets required her to pay a $14.75 “service fee” — a 64% increase — that raised the price for a family of four from $92 to $151. 

“I didn’t want to disappoint my grandchildren, so I just bought the tickets,” said Holloway, and she is not alone. Research has shown that 10 specific kinds of junk fees amount to $90 billion per year in the United States, or more than $650 per household per year on average. 

Holloway was so concerned about what she called a “bait and switch” that she called her friends Senator Linda Ujifusa (D-Dist. 11, Portsmouth, Bristol) and House Speaker K. Joseph Shekarchi (D-Dist. 23, Warwick), also her state representative, to see if something could be done. 

Both legislators introduced almost identical bills in the General Assembly (2024-S 22572024-H 7284) that targeted undisclosed mandatory fees, such as those typically tacked on to event tickets and many other products and services. The bills would make it a deceptive trade practice in Rhode Island to advertise, display or offer a price for a good or service that does not include all mandatory fees or charges other than government taxes and shipping.

“Junk fees go by many names — convenience charges, facilities fees, service charges and more — but they are usually just an excuse to charge consumers more than the advertised price of an item or service,” said Senator Ujifusa. “If the fee is mandatory, it’s part of the price. Telling consumers that the price is lower is false advertising that should be prohibited.”

Attorney General Peter F. Neronha supports this legislation and has also recently joined 29 other state attorneys general and the U.S. Department of Justice in  an antitrust lawsuit against Live Nation Entertainment, Inc. Nontransparent ticket fees are among the anticompetitive and monopolistic practices targeted by the suit.

The Federal Trade Commission and the Consumer Financial Protection Bureau are also trying to crack down on junk fees, and have the support of a broad coalition of 52 consumer advocacy groups.  In addition, California and Minnesota have banned junk fees, and multiple other states are considering junk fee bills.

“Junk fees hurt consumers and businesses because they make it impossible to compare actual prices,” said Senator Ujifusa. “Although the Rhode Island attorney general can currently address junk fees on a case-by-case basis,” she adds, “this legislation identifies what is illegal and thereby acts to prevent the use of junk fees as well as reduce the need for taxpayer-supported state enforcement actions.”

Customers subjected to hidden fees in online ticket sales spend significantly more than those shown the true price up front.  “If this proposed law were in place,” said Senator Ujifusa, “my friend Pearl and countless other Rhode Islanders would be protected from hidden mandatory fees and able to spend their hard-earned dollars on things they really want or need.”

 

 

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