FTC’s Proposal to Eliminate ‘Junk Fees’: A Game-Changer for Consumers

The White House announced new actions against “junk fees” on Wednesday. The proposed rule by the Federal Trade Commission (FTC) aims to ban hidden and bogus charges. Under this rule, corporations will be required to include all mandatory fees when communicating prices to consumers. The goal is to make it easier for customers to compare prices and encourage companies to compete for the lowest price. FTC Chairwoman Lina Khan stated that this rule would promote honest pricing and prevent corporations from deceiving consumers with surprise or mislabeled fees. The White House believes that such fees cost Americans tens of billions of dollars each year in industries like event ticketing, banking, hotel booking, car and apartment rentals. The proposed rule also grants the FTC the authority to secure refunds for customers and impose penalties on non-compliant companies.

President Biden’s administration is addressing junk fees as a means of combating inflation and relieving financial strain on American consumers. National Economic Council Director Lael Brainard emphasized that while these fees may seem insignificant to the wealthy, they greatly impact hardworking individuals and families trying to manage their bills. As part of the administration’s efforts, the Consumer Financial Protection Bureau (CFPB) will issue an advisory opinion on excessive fees charged by large banks and credit unions. The CFPB will also propose a rule that allows customers to transfer their banking transaction data to other banks and companies, facilitating easier transitions without incurring junk fees.

The White House previously announced commitments from companies like Live Nation, SeatGeek, Airbnb, Zillow, Apartments.com, and AffordableHousing.com to provide upfront pricing on their platforms. Through these comprehensive actions, the administration aims to protect consumers from hidden charges and promote transparency in pricing.