(TheDailyCurrents.com) – Junk fees are extra charges tacked on to services that are often vague or unclear, leaving consumers feeling like they’re being taken advantage of. These fees can be anything from hidden fees on phone and cable bills to extra charges on loan documents, they are often hidden in the fine print or just added without your consent.  A recent Consumer Reports study found that more than 85% of Americans had paid a junk fee in the past two years.

What Are Junk Fees?

Junk fees, also known as add-on fees, are extra charges that companies add to the cost of a product or service. These fees are usually not disclosed upfront, catching consumers off guard and resulting in unexpected expenses. However, these fees can add up quickly, costing consumers more than they initially planned to spend.
Lawmakers are beginning to take notice of the problem of junk fees and are working to curb their use. However, there are still many industries that rely on junk fees, and consumers need to be aware of them to protect their finances.

Common Junk Fees

The Consumer Financial Protection Bureau reported that in many industries, junk fees are increasing at a higher rate than base prices.

The Financial Sector

The financial sector generates significant amounts of revenue from charging outrageous junk fees. Last year, they made approximately $30 billion off of such charges. Commonly, these types of charges include:

• Account Maintenance Fees: Some banks charge fees for simply having an account open, regardless of how much you use it. These fees can range from a few dollars to several hundred dollars per year.
• Overdraft Fees: If you overdraw your account, your bank may charge you a fee. While it’s important to avoid overdrafts whenever possible, these fees can be quite high (sometimes up to $35 or more per overdraft). Keep track of your account balance to avoid overdrafts or consider opting out of overdraft protection.
• Late Payment Fees: Late payment fees are charged by credit card companies, lenders, and other companies when you miss a payment or make a late payment. These fees can add up quickly and can also hurt your credit score.
• Prepayment Penalties: If you pay off a loan, such as a mortgage or a car loan, early some lenders will charge you a prepayment penalty. These fees can sometimes add up to several thousand dollars.

Sports and Concert Tickets

Purchasing sporting event or concert tickets can quickly become frustrating when you see the final ticket price, only to realize that it’s much higher than the advertised price. Ticket sellers often add extra charges that may not be visible at first glance such as:

• Convenience Fees: These fees are added for the convenience of buying online or by phone. They can be as high as $10 or more per ticket.
• Processing Fees: Some ticket sellers add a processing fee for sending the tickets to you. These fees can vary depending on how you choose to receive the tickets, ranging from $2 for email delivery to $20 for overnight shipping.
• Print-at-Home Fees: Even if you choose to print your own tickets in an attempt to avoid shipping fees, you may be charged a $2-3 print-at-home fee.

Home Improvement

Whether you’re renovating your bathroom or remodeling your kitchen, you’ll want to be on the lookout for a few sneaky upcharges such as:

• Permit Fees: Depending on where you live, you may need a permit for certain home improvement projects. These permits can add up quickly and often require the help of a licensed professional to obtain.
• Hidden labor and Installation Fees: Contractors may charge hidden labor fees for tasks that aren’t outlined in your contract. To avoid these fees, make sure your contract is specific about the work being done and who is responsible for what tasks.
• Cleanup fees: After your project is complete, your contractor may charge a cleanup fee. This fee can be avoided by asking your contractor to include cleanup in the initial quote.

Travel and Vacation Fees

For many of us, traveling and taking a vacation is an opportunity to escape the stresses of daily life and create unforgettable memories. However, what we may not always anticipate are the various fees that come with booking and experiencing our dream trip.

• Also known as destination fees or amenity fees, resort fees are an additional daily charge tacked onto your hotel or resort bill. They may include access to amenities such as fitness centers, Wi-Fi, and pool usage, but often are non-optional, and guests may not even be aware of them until check-out.
• Baggage fees: Many airlines now charge fees for checked luggage, with costs varying depending on the number of bags and weight limits.
  
  Parking and Transportation Fees:
• Parking fees: Depending on your mode of transportation, you may have to pay for parking at airports, train stations, or rental car facilities.
• Ride-sharing surcharges: Ride-sharing services such as Uber and Lyft often impose additional surcharges during peak travel times, such as holidays and busy weekends.

Online Shopping and Subscriptions

Online shopping has become increasingly popular in recent years, with more and more people turning to e-commerce for their everyday purchases. However, as with any industry, there are often hidden fees and charges that consumers need to be aware of to avoid being overcharged.

• Subscription auto-renewals: Many online services offer subscriptions that automatically renew, often at a higher rate than the original price. Always read the fine print to understand the terms and conditions of your subscription, and be sure to cancel before the renewal date if you no longer wish to use the service.
• Shipping and handling fees: These fees can be a major source of frustration for online shoppers. Make sure to compare shipping fees between different websites before making a purchase, and look for options like free shipping promotions or in-store pick-up.
• Return and Restocking Fees: Some retailers charge a restocking fee if you return an item, especially if it has been opened or used. Always check the return policy before making a purchase, and consider shopping with retailers that offer free returns or no restocking fees.

Result of Junk Fees

Junk fees may seem like small, inconsequential charges tacked on to the overall cost of a product or service, but they can have significant and negative consequences. For individuals, these fees can quickly add up and strain already tight budgets. These unnecessary charges may cause consumers to forgo important purchases or to go into debt to pay them. Companies that implement junk fees may benefit in the short term, but over time, consumers will begin to recognize these charges and may take their business elsewhere.
Not only do junk fees hurt consumers and companies, but they can also negatively impact the economy as a whole. As more people are burdened by unnecessary fees, their purchasing power decreases. This, in turn, can lead to decreased economic growth. Additionally, companies that rely heavily on junk fees may struggle to remain competitive with businesses that offer more transparent pricing. The end result may be a weaker, less dynamic economy.

The Junk Fee Prevention Act

To combat these negative effects, lawmakers have introduced the Junk Fee Prevention Act. If passed, this legislation would require companies to disclose all fees upfront and limit the amount of money they can charge for these fees. The goal is to protect consumers from these deceptive charges and create a more level playing field for businesses. While it remains to be seen if this legislation will become law, it is a step in the right direction for preventing the harmful effects of junk fees.

Avoiding Junk Fees

While junk fees may seem harmless, they can add up quickly and hurt your finances. These sneaky charges are often added to services and products without your knowledge, leaving you with unexpected bills.
Fortunately, there are a few methods you can employ to avoid or at least lessen their financial impact.

• Be cautious of free trials.
  Many companies offer free trials that automatically enroll you in their services after a certain period. Read the fine print and cancel before the trial period ends if you don’t want to continue using the service.
• Watch out for in-app purchases.
  In-app purchases can add up quickly, especially for children who might not realize the cost. Set up parental controls or disable purchases on their devices to avoid surprise bills.
•  Use a debit card that can be “frozen”.
  Some banks offer debit cards that can be frozen when not in use. This prevents unexpected charges from going through and gives you control over your finances
• Negotiate fees.
  Sometimes, you can negotiate fees, especially if you are a loyal customer.
• Make payments on time.
  Late fees can be one of the biggest junk fees that you encounter. Avoid these fees by setting up automatic payments.
• Always read the fine print.
  Carefully read the fine print and ask questions if something seems unclear or if you are unsure about what you are being charged for.

Unfortunately, junk fees are all too common and can quickly add up to a substantial amount of money. Businesses use these fees as a way to make extra profits, often preying on consumers who don’t know any better.

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