If you’ve ever made a purchase and wondered why the total at checkout was so much more than you anticipated, you may have been the victim of junk fees. Below, we discuss the different types of junk fees, how to spot them, and what you can do to avoid incurring excess fees when shopping online or in person.
What Exactly Are Junk Fees?
Junk fees are any fees that are charged by a company that are not essential to the product or service being provided. For example, shipping and handling is a legitimate charge, while something like an “assessment fee” is likely a junk fee.
These are often hidden in the fine print and can be difficult to avoid, especially if you’re not aware of what to look for. Junk fees can add up quickly and can make it difficult to afford the purchase or service.
Categorizing Types of Junk Fees
Any business can add junk fees onto any kind of product or service they provide. Here are just some of the most common types of junk fees and where you can spot them.
Mortgage junk fees are any fees charged by a lender or broker that are not required by law or regulation. These fees may be labeled as “processing,” “underwriting,” “documentation,” or “administrative.” Some common mortgage junk fees include non-refundable application fees, origination fees, point fees, and fees to pull your credit report.
There are a few common types of junk fees that credit card companies charge, like balance transfer fees, cash advance fees, foreign transaction fees, and annual membership fees.
Balance transfer fees are charged when you transfer a balance from one credit card to another, while cash advance fees are assessed when you use your credit card to withdraw cash from an ATM or to get a cash advance from your bank. Foreign transaction fees are charges levied by your credit card issuer on transactions made in a foreign currency, and annual membership fees are yearly charges assessed by some credit card issuers just for having and using their credit card.
Usually, these fees are charged as a percentage of the transaction, which in many cases can amount to hundreds of dollars for large transactions.
In the hotel and travel industry, junk fees can be found in a variety of places, from hidden resort fees to unexpected charges for things like Wi-Fi and minibar restocking.
Resort fees are typically mandatory and cover things like using the fitness center, pool, or business center, even if you never actually use them. In many cases, resort fees can add $20-$30 per night to your bill. Some places may also try to pad the cost of a patron’s stay by charging a flat rate for Wi-Fi use or may even charge an hourly rate and add it to your hotel bill.
And if you choose to indulge in the snacks and beverages provided in your room’s minibar, be prepared to pay steep prices – as much as triple the cost of what you would pay at a local grocery store. You may also be charged a “restocking fee” of $3-$5 per item you take.
The entertainment industry is also rife with junk fees, from movie theaters charging for 3D glasses to concert venues tacking on service charges. For example, many ticketing sites will charge a convenience fee when you purchase tickets online instead of at the door. Or, they may charge a processing fee when you buy tickets with a credit card.
How To Avoid Incurring Junk Fees
In late October 2022, the Federal Trade Commission began deliberating the value of imposing regulations against establishments charging junk fees. However, the law can be slow and it’s important to know what to do to protect yourself in the meantime.
The best ways you can avoid incurring excessive or unnecessary fees is to educate yourself on what fees are standard in the industry you’re shopping in and to read the fine print. If you run into any strange-looking charges that don’t seem legit, you can look at the purchase agreement for details or check with other similar providers in the industry to see if they also charge a similar type of fee. Consider not spending money at establishments that charge junk fees, even if you’re able to negotiate getting the fees waived.
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Don’t let unethical establishments take more of your money – contact a veteran New Hampshire or Massachusetts consumer protection lawyer to learn more or to schedule a consultation by dialing (978) 744-8000 or toll free at (855) 693-9084.