FTC lays out new rule that could end hidden fees

Lina Khan in purple hue on yellow background

The US Federal Trade Commission (FTC) is proposing a new rule that it hopes will put an end to hidden junk fees that some businesses often add as a surprise when consumers are checking out.

The agency is currently seeking public comment on the rule, known as the Trade Regulation Rule on Unfair or Deceptive Fees, after having already collected 12,000 comments last year from individuals, businesses, law enforcement groups, and others on how deceptive fees affect them.

FTC Chair Lina Khan said in a statement that “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.” FTC adds that tackling junk fees through its nearly 100-year-old legal mandate that covers “unfair and deceptive acts or practices” is not enough. A new rule with more precise language can do a better job with specifics, the agency argues:

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.

In the wake of the controversy surrounding Ticketmaster and Live Nation’s handling of Taylor Swift’s Eras Tour tickets, where bots snatched up tickets over real fans, the White House stepped in to pressure ticketing companies to end hidden fees. The companies agreed to present customers with upfront prices, and now this new proposed FTC rule could force other businesses in different industries, from airlines to hotels, to follow suit.

If successful, the new rule could put an end to bait-and-switch tactics, which consumers have told the FTC that they’re constantly experiencing. Consumers have also said they often don’t know what certain fees are for. There is a 60-day window to provide comment on the new rule once it’s published in the Federal Register.

SOURCE

Leave a Comment