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Justice Department Sues Live Nation-Ticketmaster to Help Tackle Junk Fees Epidemic

From travel to funeral homes to Taylor Swift, hidden fees are everywhere​

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Taylor Swift performs onstage during "Taylor Swift | The Eras Tour" at SoFi Stadium in Inglewood, California.
Getty Images for TAS Rights Mana

Exorbitant fees that come out of the blue are practically everywhere. Call it a fee-for-all.

  • Your hotel bill includes a surprise “resort” or “destination” fee. Never mind that you didn’t use the gym, swimming pool or Wi-Fi, or partake in city tours or other amenities.
  • That sweet budget airfare you booked online doesn’t look as enticing after fees for privileges that were once gratis are piled on, such as selecting a seat or placing a carry-on in the overhead bin.
  • Tickets to a hot concert, show or sporting event that you vied for online don’t disclose the hefty handling charge on top of the tickets’ face value. The vendor has exclusive rights to sell access to the event, so you must pay the fee or stay home.

These and other maddening charges, collectively known as junk fees, exasperate Americans of all ages. Older adults on fixed incomes may feel the financial strain even more.​

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The Biden administration has declared war on junk fees. And on May 23, the federal Justice Department and 30 state attorneys general sued Ticketmaster-Live Nation alleging monopolistic abuse.

“Through its Ticketmaster subsidiary, Live Nation controls primary ticketing at hundreds of ... venues across the country,” Assistant U.S. Attorney General Jonathan Kanter said in prepared remarks. “It is through these exclusive ticketing arrangements that Americans face the dreaded Ticketmaster tax: the seemingly endless set of fees ironically named ‘service fee’ or ‘convenience fee’ when they are anything but.”

FTC proposes rule in October to ban junk fees

In October, the Federal Trade Commission (FTC) proposed a rule that would ban hidden fees and make it mandatory for businesses to disclose the “all in” pricing for hotel stays, concerts and other events.

“All too often, Americans are plagued with unexpected and unnecessary fees they can’t escape. These junk fees now cost Americans tens of billions of dollars per year — money that corporations are extracting from working families just because they can,” FTC Chairwoman Lina M. Khan said in a statement. “By hiding the total price, these junk fees make it harder for consumers to shop for the best products or service and punish businesses who are honest up-front.”

Not all fees are illegitimate. Charges may cover staffing and the cost of doing business, and companies have a right to make a profit.

But some businesses are more transparent about disclosing fees to consumers ahead of time, rather than burying them in the fine print of advertisements or contracts.

What you’re paying for — or not — can get squishy.

Junk fee problems targeted

A year before, the Biden administration asked federal agencies to find ways to reduce or eliminate hidden fees, charges and add-ons for everything from banking services and cable and internet bills to airline and concert tickets.

“It’s beyond frustrating to end up spending more than you budgeted because of random, arbitrary fees,” Khan said in an earlier statement. “No one has ever felt that a ‘convenience fee’ was convenient. Companies should compete to provide the best quality at the best price, not to see who can squeeze the most added expenses out of consumers.”

Along the way, the FTC solicited comments from the public “on the harms caused by junk fees and the unfair or deceptive tactics companies use to impose them.” Some of those fees it considers fraudulent include auto dealerships’ “nitrogen-filled” tires that have no more nitrogen than normal air.

The agency also wants to improve the public’s access to funeral prices posted online. In January, the FTC sent warning letters to 39 nationwide funeral homes after investigators discovered “several violations” of the Funeral Rule following an undercover phone sweep.

An FTC document explains the rule: "The Funeral Rule requires [funeral providers] to give consumers accurate, itemized pricing information, and various other disclosures about funeral goods and services." On 38 calls, investigators said the funeral homes either refused to answer pricing questions or provided inconsistent answers.

The FTC estimates its proposed new rule will save consumers more than 50 million hours a year of wasted time spent searching for the total price in live-ticketing and short-term lodging alone, a time savings equivalent to more than $10 billion over the next decade.

Transparency sought on bank, airline, TV fees

The Consumer Financial Protection Bureau (CFPB), an independent agency within the Federal Reserve System, issued guidelines in October 2022 on surprise overdraft and depositor fees it says violate the Consumer Financial Protection Act.

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“Financial institutions should compete for consumers’ business based on the quality of their products and services and attractive interest rates. Their profit models should not rely on excessive and unpredictable junk fees,” Deborah Royster, CFPB assistant director in the Office for Older Americans, told AARP at the time.

The U.S. Department of Transportation issued its own rule to make extra fees more transparent. It wants airlines to issue refunds for checked-bag fees when luggage is significantly delayed or when services such as Wi-Fi don’t work in flight. Its public comment period has closed.

In January 2023, AARP sent a letter to the Transportation Department asking the agency to finalize and strengthen the proposed rules to protect consumers.

“While added fees may be appropriate in certain circumstances, the high fees for changing or canceling travel plans and fees for families to reserve seats together do not promote affordable access to travel by air,” the letter read in part. “While disclosure is an essential first step, we would encourage the department, and the airlines themselves, to reduce or eliminate such fees wherever possible.”

The Federal Communications Commission is targeting the fees that cable TV and direct broadcast satellite providers add on.

Late last year, Chairwoman Jessica Rosenworcel asked commissioners to prohibit those companies from slapping consumers with billing and early termination fees.

“No one wants to pay junk fees for something they don’t want or can’t use,” she said in a statement. “When companies charge customers early termination fees, it limits their freedom to choose the service they want.”

Consumers speak out

AARP informally canvassed social media users to ask which junk fees bothered them the most.

The comments weren’t surprising.

“Activation fee, convenience fee or administrative fee of any sort,” responded Jon Freeman, an independent automobile consultant in Dallas. “So I’m buying a service from you. But in order to do that, I also have to pay a one-time fee of a completely arbitrary amount just so someone can type a few buttons on their computer, which they do anyway?”

Northern Virginia-based tech consultant Stephen Baker takes issue with phone providers: “The idea that you have to pay [them] a fee to upgrade or trade in your phone is reprehensible.”

A gaggle of other fees came up: charges to reserve an Uber ride, service fees at Airbnb, fees tacked on to cable bills and rental car agreements, and those added to the tab at restaurants. Ticketmaster, which has more than 80 percent of the market for major live concerts and professional sporting events, was frequently mentioned.

Chaos of Taylor Swift tour tickets starts new era

If you wanted Taylor Swift concert tickets for your kids or grandkids when they went on sale in November 2022, you had to get them via Ticketmaster through a process that could drive fans of any age nuts.

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First, you had to register as a “Verified Fan” of the artist to be eligible for a presale.

Ticketmaster explained the procedure is designed to help manage high-demand shows, identify real humans and weed out bots. Some Capital One credit card holders were also eligible for the presale.

Hopeful fans then had to wait for an email with a code saying they were selected to participate in a Swift presale. Demand was staggering: More than 3.5 million registered for the presale.

That left about 2 million other Verified Fans on a waiting list. Ticketmaster’s site crashed, and even those lucky enough to get tickets had to wait in the queue for hours.

Ticketmaster apologized, and that December sent emails to a limited subset of consumers who would get another shot at tickets. Through all this, Ticketmaster hasn’t waived any of its fees.

In the aftermath of the Swift presale problems, Sens. Amy Klobuchar (D-Minn.) and Mike Lee (R-Utah) called a hearing that January to examine the “lack of competition” in the ticketing industry.

Lawmakers from both parties grilled Joe Berchtold, the president and chief financial officer of Live Nation Entertainment, on the Swift chaos. Live Nation Entertainment is Ticketmaster’s parent company.

“You have brought together Republicans and Democrats in an absolutely unified cause,” said Sen. Richard Blumenthal (D-Conn).

Berchtold blamed the Swift fiasco on scalper bot attacks that were three times the amount of traffic that Ticketmaster had previously seen. At a subsquent White House roundtable, Live Nation, along with Airbnb, SeatGeek and other companies, pledged to disclose full pricing up front to consumers.

Live Nation defends its charges

The Justice Department, which went ahead with its lawsuit, remains unmoved.

In a written response to the government’s action, Dan Wall, Live Nation's executive vice president, denied that Live Nation and Ticketmaster wield monopoly power and said the suit “won’t reduce ticket prices or service fees.”

“It ignores everything that is actually responsible for higher ticket prices, from rising production costs, to artist popularity, to 24/7 online ticket scalping that reveals the public’s willingness to pay far more than primary ticket prices. It blames [us] for high service charges — and just the fact that there are fees — but ignores that Ticketmaster retains only a modest portion of those fees.”

Ticketmaster’s typical charges include:

  • Service fees, also known as convenience charges, added to the face-value price or for a resale ticket to the listing price of each ticket. The fee varies by event based on Ticketmaster’s agreements with its clients.
  • Order-processing fees that offset the costs of ticket handling, shipping and support. The fee is generally not charged at the box office. In some cases, order-processing costs are lower than the order-processing fee, so Ticketmaster may earn a profit on the fee. 
  • Delivery fees that Ticketmaster may profit on as well. Clients determine delivery fees that vary by event, but the company may have lower costs.

4 ways you can fight the fees

Consumers aren’t totally powerless. Some steps to consider:

1. Research prices before buying. If an advertised price or fare seems too good to be true, it probably is.

“Always ask what the catch is,” says Linchi Kwok, a professor at the Collins College of Hospitality Management at California State Polytechnic University, Pomona. Ask to see the fee structure and, if need be, get a friend or family member to go over the charges with you.

2. Say something. It never hurts to ask about a fee that shows up on your bill.

“I think it is good advice that consumers who are hit with a junk fee say something to the company. Some companies will respond, ‘You know what? You’re right. We’re sorry about that. Here’s your $20 or $50 back.’ Many will not,” Austin King, then the FTC’s associate general counsel for rulemaking, said in an interview.

3. Take your business elsewhere. “Is there an alternative, and is it a better alternative in your circumstance?” asks Lyle Solomon, principal attorney at Oak View Law Group in Auburn, California.​

“It’s not very hard today to find a credit card that does not have an annual fee [or] a bank that doesn’t charge ATM or account maintenance fees. The harder ones are airlines and convenience fees on ticket purchases because you may not have a reasonable alternative.”

If a single ticket vendor handles the show you want to see, you’re probably stuck unless you’re willing to pay potentially higher prices in the resale market. In some places, you can save on fees by visiting the box office, but not everyone has the time or wherewithal.

Mike McDougall, who owns a public relations agency in Rochester, New York, says resort fees are fine with him as long as a hotel property discloses them ahead of time and offers an opt-out.

When they don’t, “it’s a money grab, pure and simple,” he says. “The scheme is now being used in some major [metropolitan areas] at well-respected hotel brands, too, in hopes that it slides into corporate charge accounts without notice. Front desk staff tell me they’re powerless to do anything about it. I now book elsewhere.”

4. File a complaint. You have a few avenues.

  • Consumer Financial Protection Bureau if your issue is with a bank or other financial entity. The CFPB says it sends more than 10,000 complaints weekly to financial companies asking for a response. Most respond within 15 days. Companies may feel the pressure, since the CFPB’s complaint database is public.
  • Federal Trade Commission. The agency says it received 12,000 comments in a year about bogus fees relating to its proposal to ban junk fees. Though the public comments period ended, it welcomes complaints from the public of rip-offs, deceptive advertising and scams.
  • U.S. Department of Transportation. If your complaint is about an airline fee, contact this agency.
  • State agencies. Many states prohibit unfair or deceptive acts or practices, so you may find a remedy by contacting your state attorney general’s office or state consumer protection office. You also can reach out to the Better Business Bureau and members of Congress.

This story, originally published Dec. 27, 2022, has been updated to reflect a bipartisan Senate hearing on Ticketmaster’s business practices and the subsequent Department of Justice lawsuit, AARP’s outreach to the Department of Transportation, and the FTC’s proposed rule on junk fees.

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