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Cato Daily Podcast

The President's Odd and Expansive Conception of "Junk Fees"

Feb 19, 2024
A discussion on the concept of 'junk fees' highlighted by the president, exploring surprise charges like service fees at restaurants. Debates on the economic rationale behind these fees, their impact on consumers, and the Biden administration's strategy to regulate them in industries like airlines and hotels.
17:03

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Quick takeaways

  • Biden administration targets misleading fees like early termination charges, resort fees, and airline seat fees.
  • Fee structures like unbundling and termination fees enhance market competition but may annoy consumers.

Deep dives

Biden Administration's Definition of Junk Fees

The Biden administration defines junk fees as charges designed to confuse or deceive consumers or to take advantage of market power. These fees are deliberately deceptive or opaque, such as early termination fees, hotel resort fees, bank overdraft charges, and airlines charging for seating. While some fees have economic justifications, the administration aims to target those perceived as deceptive or inconvenient to consumers.

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