President Barack Obama's administration issued a report Thursday decrying the prevalence of hidden fees, warning their widespread use is a growing problem for the country's economy.
"In many industries," the report from the National Economic Council read, "businesses use so-called 'hidden fees' — the addition of a mandatory or quasi-mandatory fee to the advertised price of a good or service, added at some point in the transaction, to effectively raise the final price — in order to drive down the perceived price and lure consumers to make purchasing decisions based on misinformation.
"At their worst, such fees can be fraudulent or deceptive; at a minimum, they make prices unclear, hinder effective consumer decision making, and dull the competitive process."
The report singles out "resort fees" added to hotel bills, "service" fees added to ticket prices for music and sporting events, and airline baggage and change fees as examples of fees that "can be found in a diversity of industries and are growing in magnitude."
Last year, resort fees brought in $2.04 billion in revenue for the hotel industry, service fees made over $1.6 billion, and baggage and change fees earned the most at $22.5 billion.
"Transparent and accurate pricing is the foundation of an effective and efficient American economy, allowing consumers to make smart choices and to reward the providers of better goods and services," the report concluded. "But when pricing is unclear, it threatens the competitive process by which consumers make decisions."
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