FTC Proposes Rule On "Junk Fees"

The Federal Trade Commission announced that it is proposing a rule prohibiting "junk fees," which the FTC called, "hidden and bogus fees that can harm consumers and undercut honest businesses."

In announcing the rule, FTC Chair Lina M. Khan said, "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 would prohibit what the FTC calls "hidden fees" and "misleading fees."

Hidden Fees

First, the proposed rule prohibits "hidden fees." Specifically, the proposed rule prohibits the advertising of any amount that a consumer may pay without clearly and conspicuously disclosing the "total price." In addition, if any other pricing information is included in the advertising, the total price must be disclosed more prominently