Undisclosed fees related to coronavirus reparations and personal protective equipment (PPE) may be illegal, the Washington Post reported on Feb. 5.
Fees to cover financial damages to businesses or the cost of PPE are “a legitimate concern,” the story said. However, a survey of attorney general offices and financial departments conducted by the Post revealed that U.S. consumers in 28 states filed over 500 complaints of coronavirus-related surcharges. Charges have ranged from $5 to $1200.
Among these cases, Attorney General Dana Nessel (D-MI) sent a cease-and-desist letter to 11 senior living facilities, alleging overcharge after multiple residents complained about excessive fees.
In a press release, Nessel said that these “unauthorized” costs pose a great strain to consumers, especially for seniors living on a fixed income.
“This pandemic has caused financial strain for many people and businesses in Michigan, but that does not provide companies with the right to impose unauthorized costs on their customers and clients,” she said.
In August, state officials issued warnings of hidden fees to residents in New York, Connecticut, Arizona, and Michigan, the Post reported. New York’s department of financial services also asked health insurers to coordinate refunds to patients after they complained of excessive fees at dental offices.
In most cases, especially in the restaurant industry, pandemic surcharge fees are needed to offset the effects of a lack of visiting customers, indoor or outdoor restrictions, and PPE. Sean Kennedy, the National Restaurant Association’s vice president for public affairs, said to the Post that many fixed expenses at restaurants don’t change, pandemic or not.
“We are not an industry that is designed for an on/off switch,” he said in an email. “For a restaurant to be able to be financially viable, they need to be operating at full capacity, seven days a week.”
Businesses, including hotels, restaurants, and bars, were particularly hard hit this winter as coronavirus cases surged.
“A combination of COVID fear and state-mandated restrictions on activity in the services sector is squeezing businesses, and no real relief is likely until a sustained decline in pressure on hospitals emerges; that’s probably a story for late February at the earliest,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, told CNBC last month.
The Senate on Feb. 5 approved a budget plan for U.S. President Joe Biden’s $1.9 trillion relief package. With this, individual state-level legislation can be developed to address restaurants, doctors’ offices, and individual consumer challenges.