• The Federal Trade Commission (FTC) has issued a new proposed rule targeting what it calls “junk fees,” following the agency’s October 2022 announcement that it would explore such a rule and its November 2022 Advance Notice of Proposed Rulemaking.
  • The proposed Rule would not restrict the sorts of fees that can be imposed, but it would require businesses to display the total price more prominently than any other pricing information. It would bar companies from misrepresenting the purpose of a fee and require companies to disclose up front whether fees are refundable. Voluntary gratuities, shipping, and government-imposed charges are excluded from the scope of the rule altogether. While the proposed Rule would apply to all industries, the Commission identifies hotels, short-term lodging, ticket sales, rental housing, financial services, auto sales, and internet service providers as particular areas of concern.
  • The proposed Rule is accompanied by a series of questions on which the Commission specifically invites comment on a broad range of issues. The comment period closes 60 days from the date of publication of the proposed Rule in the Federal Register, which has not yet occurred as of the time of this writing. Given the volume of comments submitted to the FTC in the earlier round, there is certain to be significant interest in the proposal.
  • The Biden Administration has criticized these sorts of fees repeatedly over the past year, and the Consumer Financial Protection Bureau also recently released an advisory opinion that asserts that consumers are entitled to basic banking information without having to pay “excessive” fees. A proposed rule from the CFPB that requires banks to allow consumers to securely send transaction data to other companies is expected later this month. California’s recently-passed SB478 also requires disclosure of all mandatory fees whenever prices are advertised, effective July 2024.
  • Click here to read Keller and Heckman’s Client Alert covering the same topic. We will continue to monitor this proposed rulemaking and will relay any developments.