regs to riches

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🍑 junk in the trunk
www.regs2riches.com

🍑 junk in the trunk

🪙 a civic opportunity re: bogus fees

Vass Bednar
Dec 5, 2022
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🍑 junk in the trunk
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matt @computer_gay
co-worker asked how I was doing today. yet another third party trying to harvest my data
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Isabel Steckel @IsabelSteckel
webmd wrapped. how many times did my tummy hurt this year
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The US has a pretty substantial campaign looking at junk fees right now and it is hot as hell. 

Twitter avatar for @FTC
FTC @FTC
FTC is exploring a rule to crack down on junk fees. Agency seeks comment on harms from unnecessary, unavoidable, or surprise charges that inflate costs while adding little to no value. More: bit.ly/3TffOgY Let us know what you think by 1/9/23: bit.ly/3TjurQn
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8:10 PM ∙ Nov 17, 2022
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🇨🇦 🇨🇦 🇨🇦 Canada? 🦗🦗🦗

A “junk fee” is defined as a fee “designed either to confuse or deceive consumers or to take advantage of lock-in or other forms of situational market power. 

The White House’s Initiative on Junk Fees and Related Pricing Practices breaks out four types of fees and fee practices that fall into this category:

  • Mandatory fees that often hide the full price; 

  • Surprise frees that consumers learn about after purchase; 

  • Exploitative or predatory fees; 

  • Fraudulent fees. 

They point to the economic issue with junk fees as a sort of deceitful competition wrench, arguing that mandatory hidden fees obscure the full price and thus make it harder for consumers to accurately comparison shop. They also suggest that an unjustified junk fee is a form of “exploitative innovation,” where a firm is encouraged to develop new junk fees instead of actually improving their product. 

Junk fees don’t just matter for you and me as shoppers, they also risk harming small and medium sized businesses, and hit low-income households and people of colour the hardest.

Canada (despite my excessive use of the crickets emoji) has gestured at junk fees by explicitly banning drip pricing as one of the initial amendments made to the Competition Act earlier this year. ‘Drip pricing’ is basically when a ‘headline’ price is advertised, but as you go through the purchasing process, additional fees/taxes/charges are “dripped” on and the price goes up. Here’s the Bureau’s summary of this change:

The US’ Competition Council has turned this call to action into a scavenger hunt of sorts - all federal agencies are looking for ways to reduce or lower junk fees. This joint, all-of-government approach diffuses responsibility for this policy goal away from just one Ministry or regulator. They’ve already taken action on eliminating unfair banking fees (something Canada has signalled it wants to echo), are taking aim at bad junk fee practices that span industries, and restricting junk fees charged by auto dealers. They’ve also proposed rules that would require internet companies to clearly disclose monthly prices, fees, and internet speeds. 

Twitter avatar for @linakhanFTC
Lina Khan @linakhanFTC
As part of a whole-of-government effort to tackle junk fees, @FTC is considering a rule to address unfair or deceptive fees, including hidden add-ons and charges for unnecessary or unwanted services. We're seeking public input as we consider next steps: ftc.gov/news-events/ne…
Twitter avatar for @POTUS
President Biden @POTUS
We’re cracking down on hidden "junk" fees like surprise overdraft and deposit fees, credit card late fees, hidden hotel booking fees. Even those termination charges that stop you from switching cable and internet plans to get a better deal. They add up. We're taking action.
8:09 PM ∙ Oct 26, 2022
336Likes155Retweets

‘Junk fees’ were recently back in the public consciousness thanks to Ticketmaster. We get used to these fees or don’t even notice them - sort of normalising them in the process and making us feel a bit helpless at check out. 

Twitter avatar for @michaelharriot
Michael Harriot @michaelharriot
Ticketmaster be like: Concert ticket: $40 Venue fee: 21.32 Access fee $18.32 Paperless transmission fee: $12.03 Fee Fee: $8.84 Fi Fo Fum: $3.43 Cuz We Can Fee: $2.01 Might as well fee: $1.89 WTF you gonna do nigga, not go? fee: $1.38 Another dollar won’t hurt nobody fee: $1.00
3:14 AM ∙ Dec 2, 2021
235,239Likes34,211Retweets

Here at home, the Deputy Prime Minister and Minister of Finance’s mandate letter points to junk-ish fees twice: 

  • Advance legislation to enhance the powers of the Financial Consumer Agency of Canada to review bank fees and charges and to require adjustments if they are excessive 

  • Continue to engage with stakeholders to lower the average total cost of interchange fees for merchants, proceeding in a way that ensures small businesses benefit from this work and protects existing reward points of consumers.  

So, we’ve set an intention but haven’t articulated it with a clear competition lens, linked it to consumer protection, or advanced it very much just yet.

☝️ Setting a national policy goal around reducing “junk” fees would expand Canada’s gaze away from just the banks. Setting a broader consumer-oriented national goal around minimising junk fees would be timely and galvanising - a pocketbook jackpot. 

Plus, these could be crowdsourced from citizens as a civic initiative of sorts, especially during this inflationary period where people are more price conscious than ever before. It’s a pro-competitive intervention that takes place outside of the Competition Act. This would act to accelerate the role of regulators and directly engage everyday people in tidying up these junk fees. It might even be a tiny bit FUN. 

In a weird way, labels are a powerful policy lever. They introduce a simple transparency for the consumer. I think we should be thinking of them more often as a vehicle to improve the consumer experience. People should continue to push for price explainability. 

‘Tis the season. Maybe Canada can also turn getting dinged into a ding ding ding. 🔔

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PS. I will include this opportunity in my submission on the Future of Competition Policy in Canada, minus emojis and stuff. Anyone can write in with ideas!

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🗞️ I wrote an op-ed based on one tweet with Jennifer Quaid! 🚢

Twitter avatar for @globeandmail
The Globe and Mail @globeandmail
A tweet to launch a thousand ships: Competition Bureau enters RBC-HSBC deal
theglobeandmail.comOpinion: A tweet to launch a thousand ships: Competition Bureau enters RBC-HSBC dealThe Competition Bureau’s tweet that it was looking into the RBC-HSBC banking merger was a break from convention
12:02 PM ∙ Dec 5, 2022
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B Sullivan
Dec 5, 2022Liked by Vass Bednar

Down with junk fees! Concerts especially

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dan mcco
Dec 5, 2022

Banks oligopoly is the worst (abm, nsf, transfers, stops, statements, overdraft, cash advance etc.), then ticket companies, then car dealers, "resort fees", then car rental hidden charges some flat rate delivery charges, telephone 911/LD/etc...

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