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California AG and state senators introduce bill to ban hidden fees

oag.ca.gov

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Re: California AG and state senators introduce bill to ban hidden fees

#231

Post by acdha »

8note wrote: post #202
acdha wrote: post #177

Earlier quoted context omitted.

I wouldn’t read the claim as “consumers secretly do like hidden fees” but rather “people say they don’t like them but don’t actually care enough to stop giving money to companies which use them”. It’s like how people might say they want to eat better food if you ask them directly but when you record what they actually eat it ends up looking quite different. On HN you’ll see a similar dynamic with privacy, business et…

Yeah, it's that people can be successfully tricked. People don't like being stolen from, but if you can get away with it, it must be a good thing

I think the problem is that it’s not actually stealing but something in between, like how we might say a salesperson is pushy and not like it but we wouldn’t refer to them as a thief.

Re: California AG and state senators introduce bill to ban hidden fees

#232

Post by ocdtrekkie »

I love how this January, my ISP added one new fee and increased the price of an existing fee and the rental cost of my modem (which was bought by a previous ISP to begin with, it's pure profit until it breaks), and those three random fee increases magically total to increasing my bill by exactly ten dollars.

While it was framed as three little fee changes, it's obvious there was a directive to up the bill by $10 a month, and then they just found lines to bump without touching the actual main one.

Re: California AG and state senators introduce bill to ban hidden fees

#233

Post by jameshart »

hn_throwaway_99 wrote: post #212
slg wrote: post #100

Earlier quoted context omitted.

>This is also a case where consumers say they want one thing, but their behavior is a different matter. For example, pretty much everyone says they prefer the full price to be shown up front in search result pages. But, as someone who is privy to a ton of A/B testing in this area, the opposite nearly always results in higher conversion, where there is a lower up-front price and fees are only tacked on during checkout…

I don't think fraud is a good analogy - the whole point with fraud is that you are getting something different after you agreed to it, when it's too late to back out. Going back to the airline example, most people say they hate getting nickel and dimed on things like paying to pick a seat up front or paying even for the first carry-on, but they will still pick one flight over another if the base rate is $5 cheaper. A…

The problem is when the customer chooses the lowest price only to find it stacked with fees before checkout, they don’t think ‘wait a minute, this is more expensive than some of the other flights I saw on the original search page. I’d be better off going back and trying one of them’

The customer assumes that all those other prices would also be lowballing them and that if they went back and chose one they’d end up with an even higher final bill.

Starting with the lowest base price seems like a good strategy to get the lowest total price when all the prices are up charged the same.

Re: California AG and state senators introduce bill to ban hidden fees

#234

Post by bialpio »

grandmczeb wrote: post #22

Interesting that fees imposed by the government are specifically exempted in this bill.

When the state has a monopoly on something, does it really matter? It's not like you can go to the competition to renew your driver's license...

Re: California AG and state senators introduce bill to ban hidden fees

#235

Post by nanidin »

ec109685 wrote: post #75

While different, it irks me that there are a bunch of hidden fees with UberEats and DoorDash. Not only do delivery companies charge the consumer fees, but restaurants generally raise their prices by 50% if you are buying through an app. That delta is not shown anywhere.

Include Instacart in that group that charges more than the price on the shelf at the store, then adds on service and delivery fees on top of that.

Re: California AG and state senators introduce bill to ban hidden fees

#236

Post by acdha »

yamtaddle wrote: post #188
acdha wrote: post #177

Earlier quoted context omitted.

I wouldn’t read the claim as “consumers secretly do like hidden fees” but rather “people say they don’t like them but don’t actually care enough to stop giving money to companies which use them”. It’s like how people might say they want to eat better food if you ask them directly but when you record what they actually eat it ends up looking quite different. On HN you’ll see a similar dynamic with privacy, business et…

People who've already wasted time getting to the point where they can see the fees, and are confident that all your competitors do the same thing anyway, aren't likely to bail over them. That's probably the most accurate way to state the "preference".

Exactly: there’s a ton of psychology research around that effect and businesses use these techniques because they work. I applaud California for trying to make this illegal since something reliably profitable is not going to stop otherwise.

Re: California AG and state senators introduce bill to ban hidden fees

#237

Post by astura »

lotsofpulp wrote: post #60
ketralnis wrote: post #53

Earlier quoted context omitted.

Congrats. I have. Anecdote fight!

The point is, presumably, the websites of major hotel brands work the same for everyone. I would be interested in seeing an example of a “hidden” fee at a hotel. Same with airline prices. Google flight search has always shown me the total price, as have the airline websites themselves.

>I would be interested in seeing an example of a “hidden” fee at a hotel.

Every single hotel room on the Vegas strip has a resort fee, for example. Try it yourself - when searching websites will list, say $50/night but when you actually go book it you'll see an additional significant "resort fee" on top of that. It makes it hard to compare prices - you will have to go to the checkout page to see what you'd actually pay.

Airlines have been required to list all mandatory fees in their prices since Jan. 26, 2012, by federal law.

Re: California AG and state senators introduce bill to ban hidden fees

#238

Post by Jolter »

tptacek wrote: post #211
weberer wrote: post #156

Earlier quoted context omitted.

Or just abolish sales tax. If the states want the money, they can just raise state income tax, which they're already charging, by a few percent. As it is now, it just complicates things and disincentivizes consumers from making purchases, which slows down the local economy.

Income taxes deter saving and investment, but are easier to target. Sales taxes are hard to make progressive (they're usually regressive) and can be harder to enforce (if they're local). It depends on your goals. It sort of makes sense that we have both, at differing rates.

While I agree with you mostly, why wouldn’t you call sales tax progressive? The more you earn, the more you will spend, so the more you pay.

The big issue I have with sales tax is that it is a much worse solution to the problem than a simple value-added tax (VAT). Most countries have figured out that VAT is more difficult to cheat.

Re: California AG and state senators introduce bill to ban hidden fees

#239

Post by shagie »

skaushik92 wrote: post #197
shagie wrote: post #152

Earlier quoted context omitted.

As there are states that are 0%, this would mean "no sales tax at all" which would really hit states where they don't have any income tax and instead just have sales tax. Under that approach, live in Texas and buy everything online from Oregon and you'll never pay any taxes. States need to raise revenue somehow and playing that form of tax arbitrage shifts the burden of taxes to the people who don't have the resource…

No; in fact sales tax is what’s shifting the burden in that direction. Income tax on the other hand is a progressive tax that keeps impact more proportional.

If you have the resources to declare residency in Texas and pay sales taxes from Oregon you are able to avoid paying most taxes.

I am saying that most people don't have the resources to play tax arbitrage. Those that do are the ones that should likely be paying the most taxes.

Going to a system were sales taxes go to 0 based on where you buy it (online in Oregon) doesn't mean that states will abandon the sales tax but rather that the tax burden that local governments can collect (sales, property) will go up and disproportionately impact the people who can least afford it.

As it is, that approach would be overturning South Dakota vs Wayfair https://en.wikipedia.org/wiki/South_Dakota_v._Wayfair,_Inc. --- https://www.supremecourt.gov/opinions/17pdf/17-494_j4el.pdf

Sales tax is regressive and a worse option for taxation. It is, however, one of the few options that local governments have for raising funds.

The tax system needs an overhaul (though frankly my confidence in congress not just doing another tax cut for the rich is low). Disrupting sales tax without a corresponding overhaul would likely make things much worse in many of the poorer areas of the nation and those where much of the economy is based on non-residents visiting.

Re: California AG and state senators introduce bill to ban hidden fees

#240

Post by hn_throwaway_99 »

hn_throwaway_99 wrote: post #82

I think a lot of comments here are missing the reason as to why these hidden fees have become so much more prevalent in the past 20 or so years. The short of it is that comparison pricing is now much easier to do because of the Internet, and many, if not a majority, of shoppers will just sort by price ascending and pick the first result (or, only pick from the first couple results). Thus, there is a huge incentive fo…

For folks taking issue with my "consumers say one thing but act a different way" line, here is a perfect example: https://money.com/stubhub-fees-all-in-ticket-prices/

StubHub tried to do the right thing here, even touting their all-in pricing as an advantage over competitors - and customers still preferred their competitors' more opaque pricing practices anyway.

Point being, no company can afford to "do the right thing" if their competitors can do the "wrong thing" and be rewarded for that wrong thing. This is when government should step in.

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