Federal Trade Commission to explore rule cracking down on ‘unwanted’ fees

LAS VEGAS (KLAS) – Could we soon see the end of resort fees? This week, President Joe Biden said he was going after hidden “junk fees,” including those charged at Strip resorts, ordering the Federal Trade Commission to investigate.

In Las Vegas, the majority of resorts on the Strip charge an average resort fee of around $40 per night.

President Biden has also said his administration will target “hidden fees” on concert and airline tickets and even bank overdraft fees that he says can weaken the economy.

President Joe Biden arrives on Air Force One at the Delaware Air National Guard Base in New Castle, Delaware, Thursday, Oct. 27, 2022. AP Photo/Manuel Balce Ceneta)

The Federal Trade Commission has voted to start a regulatory process to prevent “junk fees,” but it’s unclear when or how it will actually affect the Las Vegas Valley.

Local experts such as gaming historian David Schwartz at UNLV said if the change were made, resorts would likely raise their rates.

“I think it will provide more transparency in pricing, which is generally a good thing, and it will just give people a better idea of ​​what they’re getting into when they go to book,” Schwartz said.

8 News Now spoke to tourists on the Las Vegas Strip, like Mike Haske, who said higher upfront prices would change the way they book their vacations.

“They sell you $8 a night or $20 a night and then it’s ‘Oh, by the way, you have the resort fee,'” Haske said.

Many people 8 News Now spoke to said they chose to stay on Airbnb to avoid resort fees on the Strip. For the most part, hosts cannot charge resort fees unless they manage multiple properties and the company has approved it.

On its website, the White House has listed examples of what it considers to be “hidden fees” or “junk fees”.

Definition of “unwanted” charges

  • Mandatory fees that often hide the total price – Some sellers publish a low price and then add a mandatory fee later, at the “back-end” of the purchase process or when a consumer tries to cancel the service. An example is the “service charge” added to the cost of a ticket to a concert or sporting event.
  • Surprise fees that consumers are informed about after purchase – Surprise fees that consumers do not expect – and which may not be mandatory – also complicate the comparison and can weigh on household finances. Surprise hospital bills from out-of-network doctors at in-network hospitals and airline “foster care fees” are prime examples.
  • Operating or eviction costs. Excessive fees that target consumers who have limited alternative options – because they are locked into a product or service, or because they are otherwise economically vulnerable – can also impose a financial burden. As the CFPB explains, one sign of operating costs is that they “far exceed the marginal cost of the service they claim to cover.” Bank overdraft fees, which far exceed the bank’s cost of credit, and surprise “break fees” are prime examples.
  • Fraudulent charges. Some charges involve outright fraud or misrepresentation by the seller. An example is advertising a “no-fee” bank account which, in practice, incurs significant fees.

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