‘Junk’ fees harming consumers, Nevada advocates say

Nonprofit workers and representatives of Nevada Attorney General Aaron Ford’s office met with members of the public in a New York-style pizza restaurant in Henderson on Saturday to discuss so-called junk fees and how to dump them.

Junk fees are “hidden and bogus fees that can harm consumers and undercut honest business,” according to the Federal Trade Commission.

These fees appear in different ways across different industries. They might be tacked on to a rent payment, a food delivery bill or a hotel booking fee, panelists explained.

What they have in common is that they are often hidden behind a different, lower up-front cost and may come as a surprise to consumers.

“To me, it’s about transparency, said Jonathan Norman, advocacy outreach director for Legal Aid of Southern Nevada.

The legal nonprofit was joined at Carmine’s Pizzeria by the group hosting the panel, For Our Future Nevada, a social welfare nonprofit.

The progressive organization held the panel to discuss an initiative from President Joe Biden’s administration to get rid of junk fees, highlighting a proposed FTC rule from November 2023 that would “prohibit unfair or deceptive practices relating to fees.”

“This is something that harms all of us,” said Andrew Clarke, senior field organization at For Our Future Nevada. “It’s pretty much legalized robbery.”

True cost of rent

Among members of the audience, who gathered around tables clad in red and white checkered tablecloths, junk fees in housing costs was a common concern.

Miriam Gibson, a 55-year-old real estate broker who often deals with people looking for renters, said she attended the panel because junk fees are hurting the industry.

“The problem that I face is that the application fees are outrageous and downright fraudulent,” she said.

These fees can be around $150 and are not refundable. And some properties will collect application fees from people they know they will not rent to, Gibson said.

Amber Krawczyk, 38, of North Las Vegas, said her experience apartment hunting was plagued by junk fees.

She found that there were often mandatory fees for services like trash collection hiding behind the advertised rent.

The apartments she viewed with an advertised rent of $1,700 often ended up costing $2,000 in total, she said.

While some of these fees are not themselves an issue, Krawczyk wishes they were transparently incorporated into the full cost of rent so that renters don’t get attached to an apartment without realizing how much they will owe each month.

Las Vegas Strip resort fees

Resort fees like the ones commonly added to nightly room rates by Las Vegas hotels, particularly those on the Strip, amass nearly $3 billion a year nationwide, according to a New York University study.

The additional cost, which is said to fund the amenities enjoyed by hotel guests, is sometimes recognized as a “junk” fee.

In his 2023 State of the Union Address, Biden said he “will ban surprise ‘resort fees’ that hotels tack on to your bill” in his Junk Fee Prevention Act, which was introduced in the Senate last year.

“These fees can cost you up to $90 a night at hotels that aren’t even resorts,” Biden said in the address.

Senior Deputy Attorney General Lucas Tucker, who was present at the pizzeria on behalf of the attorney general’s office, said that he could not speak for Ford on whether or not hotels should be able to continue tacking on resort fees.

Ford was scheduled to attend the event, according to a news release from For Our Future Nevada, but did not.

“Sometimes some of these fees are legitimate,” Tucker said. “It’d be nice if they would make it clear exactly what you’re getting for the fee, but just because there are additional fees beyond just the room and the tax does not necessarily make it a junk fee.”

Tucker said that while he has not stayed at a Las Vegas resort for quite a while, he would need to see a specific bill to determine whether or not a resort fee could be considered junk.

”It’s a case by case basis,” he said.

Dumping the junk fee

Norman said that one frustrating example of junk fees is buying a concert ticket from Ticketmaster, as hidden fees can make a transaction much more costly than the listed ticket price.

Ticketmaster is owned by the company Live Nation, which is currently facing an antitrust lawsuit filed by the Department of Justice.

If the company stopped doing “magic behind the scenes,” Norman said he doesn’t think he’d have an issue with a higher upfront cost.

Bringing antitrust lawsuits could help reduce junk fees, according to Tucker. He explained that the fees can be thought of as a byproduct of the lack of competition, as there is little incentive to be transparent with consumers.

Further, For Our Future Nevada has been involved in efforts to pass legislation eradicating junk fees such as application fees, such as Senate Bill 78, which was ultimately vetoed by Gov. Joe Lombardo.

But if other legislative efforts and the FTC’s proposed rule are successful in getting rid of junk fees, panelists and attendees say consumers will be able to make more informed decisions about their purchases.

“The reason they want to make these fees instead of the cost of the good or the service you’re buying is they want to trick you,” Norman said. “They want to get you in the door.”

Contact Estelle Atkinson at eatkinson@reviewjournal.com.