Consumer watchdog puts school lunch “junk fees” in the spotlight

WASHINGTON (Gray DC) - The Consumer Financial Protection Bureau has released a new report highlighting what it calls “junk fees” charged by school lunch payment platforms.

The report focuses on fees that are charged by payment processing companies when parents make online payments for their child’s school lunch program.

“What we found is that schools, 87% of our sample, were already using these digital payment platforms. And while they’re very convenient, they also tend to be loaded with these junk fees,” said Austin Hinkle, the CFPB Section Chief for the Office of Students and Young Consumers.

According to the report, there are upwards of $100 million in school lunch transaction fees, charged every year. They average around $2.37 - paid every time money is added online to a school lunch account.

Fee-free payment options are required by law but Hinkle said they are not well advertised and is hoping that this report can help change that.

“We’re hopeful what this report does is it spurs school districts to make that a little bit more clear in their communications to families, and that families are aware of it, and really put school districts in a position where they can negotiate with these payment processors to reduce fees,” said Hinkle.

One Boston area mother, Rebecca Wood, noticed the fees adding up when she was working to pay off her daughter’s student lunch debt.

“I saw that there was a $2.50 transaction fee, which is the price of a school lunch,” she said. “And because I couldn’t pay several hundred dollars at the beginning of the school year and only pay it once, I was having to pay it repeatedly.”

Wood also said she believes it is important to talk about the impact of the fees on families.

“It has always bothered me that we have yet to do anything about these fees. And I think it’s important that people, talk about it and know about it. And in essence, we address it because these are predatory and they prey on the people who need the money the most in their pockets.”

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