NEWS
FTC Proposes New Rule Prohibiting Hidden ‘Junk’ Fees
Wikipedia
The Federal Trade Commission on Wednesday announced a proposed rule to prohibit hidden or falsely advertised junk fees, which mislead consumers about the actual cost of products and services from concert tickets to phone bills.
“The proposed rule would prohibit corporations from running up the bills with hidden and bogus fees, requiring honest pricing and spurring firms to compete on honesty rather than deception,” FTC Chair Lina Khan said on a call with reporters. “Violators will be subject to civil penalties and be required to pay back Americans that they tricked.”
The agency said it received 12,000 public comments after it published its advanced notice of the proposed rule in November of last year.
The public comments from consumers, businesses, law enforcement and others show that when it comes to junk fees, people are put out, fed up, and ticked off, the agency said.
Commenters noted the widespread prevalence of junk fees in a broad variety of consumer transactions – booking hotels, buying concert tickets, renting an apartment, getting food delivered, renting a car, and paying telecom bills, to name just a few examples, the agency said.
The FTC said it has previously used the existing prohibition on “unfair and deceptive acts or practices” to challenge junk fees in court, but widespread consumer injury persists.
The proposed new rule would require advertised prices to include mandatory charges and prohibit misrepresentations about the nature, purpose, or amount of fees, the agency said.
The proposed rule reads: “It is an unfair and deceptive practice and a violation of this part for any Business to offer, display, or advertise an amount a consumer may pay without Clearly and Conspicuously disclosing the Total Price.” The agency said the capitalized words carry specific definitions laid out in the rulemaking proposal.
There will be another public comment period on the proposed rule, and the FTC said it has included a list of 37 questions it would like people to consider answering.
TMX contributed to this article.
