FTC Proposes New Rule to Ban Hidden and Bogus Fees, Saving Consumers Billions of Dollars Annually

The Federal Trade Commission (FTC) has proposed a new rule that would ban hidden and bogus fees that can cost consumers an extra $80 billion every year. This proposed rule comes after the FTC received 12,000 comments from consumers and businesses on how to address the issue. The rule would make it clearer when extra fees are being charged, like at hotels and at live-ticket events.

The move follows California Governor Gavin Newsom signing a new law that bans junk fees effective July 1, 2024. The Biden administration has also called for a crackdown on the practice. The proposed rule would bar businesses from using hidden fees, or charges that the FTC calls “bogus fees” and which are misrepresentations.

The FTC is now seeking public comment on the proposed rule. The agency will consider comments received by June 14, 2021. The FTC said it will use the comments to help determine whether to issue a final rule.

The proposed rule is part of the Biden administration’s efforts to protect consumers from hidden fees. The administration has also proposed a rule that would require businesses to disclose the true cost of goods and services before consumers make a purchase.

The FTC’s proposed rule is an important step in protecting consumers from hidden fees. The agency is seeking public comment on the proposed rule, and will use the comments to help determine whether to issue a final rule. If the rule is finalized, it could save consumers billions of dollars each year.