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Bill to ban hidden fees in California signed into law

oag.ca.gov

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Re: Bill to ban hidden fees in California signed into law

#321

Post by janalsncm »

beachy wrote: post #238

I don't quite see how an overdraft fee (one of the examples given) is a junk fee - it costs the bank real money to cover the loan they are effectively giving you when you are in overdraft.

If it was a loan the fee amount would never exceed the overdraft amount. But the fee is usually huge compared to the amount the bank is covering. No one should be taking a loan out at those terms.

For example, if you overdraft by $1 you could be charged $35 as a cost of this “loan”. No one should take out a loan at 3500% interest. You’d get a better rate at a payday lender.

Since this “loan” amount is not related to the cost of the service I’d call it a junk fee.

Re: Bill to ban hidden fees in California signed into law

#322

Post by brewdad »

ryanwaggoner wrote: post #223
seer wrote: post #77

Earlier quoted context omitted.

I really like how tips are done in most of europe, where the tip is included by default in the restaurant price. So now your choices are - add additional tip if you’re really satisfied with your service, or retract the default tip if you’ve been wronged in some way. Just by default you don’t have to think about it, and it shows up in all the places if should - government included.

I’ve traveled all over Europe and lived in Italy for several years and I’ve never heard of this.

I think they mean retracting a “service charge” rather than trying to get away with paying 9 units for a 10 unit item. I’m sure you could have the service charge removed but the service would have to be awful for me to attempt it.

Re: Bill to ban hidden fees in California signed into law

#323

Post by brewdad »

oehpr wrote: post #227
pandaman wrote: post #203

Earlier quoted context omitted.

>If it's so easy to "know" the local tax rate for various things, why isn't it easy to label them? Because you pay the tax from the total of your purchase and not from each item separately. E.g. in Santa Monica, CA sales tax is 10.25%, a price on a $4.95 item with tax included would be $5.46 but on 10x of these items it's just $54.58.

.... And this is why we don't just add it to the price? This is the grand reason? Wouldn't it be far better to establish a rock solid precedent that the price there is the price you pay? Every exception that remains is an opportunity for weasels to justify why they are also the very important exception to the rule. You sure that's worth a rounding error?

It really should be the norm. The business collects the sales tax on behalf of the state and then submits the tax on the basis of their sales. There is no good reason they can’t price items appropriately and submit the same tax directly.

Re: Bill to ban hidden fees in California signed into law

#324

Post by belltaco »

bubblethink wrote: post #310

So now these fees will be presumably less hidden, but does it really change things ? The junk fees appear as a fixed line item on the bill. Instead, much like the side-effects disclaimers, they will appear somewhere on the first screen. Something like, "Uber adds $5 + 25% to your order" in tiny text somewhere.

Thats a big improvement because you can back out before investing all your time configuring your cart if you know fees are higher than worth it to you. Or comparison shop easier.

Re: Bill to ban hidden fees in California signed into law

#325

Post by brewdad »

devilbunny wrote: post #206
Jensson wrote: post #162

Earlier quoted context omitted.

The store is just in a single town, it is trivial for them to fix their labels. For the user on the other hand it isn't trivial to figure out the tax rate for every store they visit as they travel since as you admit it changes everywhere.

For a big corp, they want to advertise nationally. "$1 hamburgers!" or "$799 refrigerator!". You can't make a national ad if you have to have precise pricing. Not the strongest argument, but there it is. A college friend worked at a pizza place that straddled a county line. One county had its own sales tax; the other did not. The register was in the back of the store to take advantage of this (the location of the reg…

I’m really not concerned if a business has to spend a few percent more on their ad budget.

Re: Bill to ban hidden fees in California signed into law

#326

Post by pandaman »

lmm wrote: post #309
pandaman wrote: post #229

Earlier quoted context omitted.

>And this is why we don't just add it to the price? This is the grand reason? I don't think so, there are more apparent reasons listed in this thread already. I am just pointing that rolling a sales tax into price is not as simple as some imagine. I imagine VAT is accounted differently so it could be rolled into the price without this kind of error but I've never dealt with VAT so I can only speculate. >Wouldn't it b…

> I don't think so, there are more apparent reasons listed in this thread already. I am just pointing that rolling a sales tax into price is not as simple as some imagine. I imagine VAT is accounted differently so it could be rolled into the price without this kind of error but I've never dealt with VAT so I can only speculate. Nope. VAT has complicated rounding rules too. Turns out it actually is still easy to roll…

>It's a lemon market.

You mean it's a market with information asymmetry? How so? Customers know both that the sales taxes exist and their magnitude. If you think it's a great idea you can put big sign saying on your shop/in your ad "inc. tax" instead of "plus tax", which is on most advertisements already. Surely customers could read it.

Re: Bill to ban hidden fees in California signed into law

#327

Post by heyoni »

WalterBright wrote: post #311
t-writescode wrote: post #306

Earlier quoted context omitted.

Cool story. How does that help the hundreds of thousands of very poor people who are trying very hard to pinch pennies in dire straights?

Is there something preventing them from visiting the bank manager? Or are you implying that being poor means the bank should cover the overdraft?

I think they’re implying that the banks shouldn’t reorder the charges and should pick up the phone when we call them to opt out of overdraft altogether.

Re: Bill to ban hidden fees in California signed into law

#328

Post by cgriswald »

hot_gril wrote: post #299
ajkjk wrote: post #277

Earlier quoted context omitted.

That is already how it works. The fee doesn't change their ability to get money back whatsoever. The fee just punishes the person who screwed up more than they're already punished by being broke.

It's a loan until the customer pays it back, and loans cost money to cover. Except the overdraft fee is usually some insane % interest, to the point where nobody would take that loan unless it were by accident... So in short, it's a scam.

If customers are afraid of the fees, they're more likely to keep some minimum balance in their account. Checking accounts don't generally provide interest (or at best, token interest). Multiplied by millions of customers, that $200 sitting in checking rather than savings, CDs, or other instruments is a nice chunk of change for the bank to loan out.

I'd want to see some numbers here. But the fees might be directly predatory or they might just be high enough to offset the cost of actually overdrafting to the actual predatory behavior of trying to force people to bank more of their money with lower interest rates.

Re: Bill to ban hidden fees in California signed into law

#329

Post by mikepurvis »

beachy wrote: post #238

I don't quite see how an overdraft fee (one of the examples given) is a junk fee - it costs the bank real money to cover the loan they are effectively giving you when you are in overdraft.

I dunno, it's pretty slimy to me if I go $3 into overdraft and then the bank denies that transaction and instead hits me with a $30 fee.

Now I'm $30 in the hole and I didn't even get my cellphone bill paid, just a fee for the privilege of having tried to do it.

Re: Bill to ban hidden fees in California signed into law

#330

Post by slotrans »

WalterBright wrote: post #311
t-writescode wrote: post #306

Earlier quoted context omitted.

Cool story. How does that help the hundreds of thousands of very poor people who are trying very hard to pinch pennies in dire straights?

Is there something preventing them from visiting the bank manager? Or are you implying that being poor means the bank should cover the overdraft?

being poor means the bank manager won't speak with you, and also the bank doesn't much care to have you as a customer
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