Did You Know the FTC is Battling Junk Fees?
The Federal Trade Commission today announced a new proposed rule to prohibit junk fees, which are hidden and bogus fees that can harm consumers and undercut honest businesses. The FTC has estimated that these fees can cost consumers tens of billions of dollars per year in unexpected costs, according to a media release.
The agency launched a proceeding last year requesting public input on whether a rule would help to eliminate these unfair and deceptive charges. After receiving more than 12,000 comments on how fees affect their personal spending or business, the FTC is seeking a new round of comments on a proposed junk fee rule.
“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,” said FTC Chair Lina M. Khan, in the release. “By hiding the total price, these junk fees make it harder for consumers to shop for the best product or service and punish businesses who are honest upfront. The FTC’s proposed rule to ban junk fees will save people money and time, and make our markets more fair and competitive.”
The proposed rule will save consumers more than 50 million hours per year of wasted time spent searching for the total price in live-ticketing and short-term lodging alone, according to FTC estimates. This time savings is equivalent to more than $10 billion over the next decade.
Other federal agencies and organizations are joining the FTC to develop and implement rules prohibiting junk fees across multiple U.S. markets and sectors including the Consumer Financial Protection Bureau, the Federal Communications Commission, the Department of Housing and Urban Development the Department of Transportation.