The White House announced new actions against so-called “junk fees” Wednesday, including a proposed Federal Trade Commission (FTC) rule that would ban the “hidden and bogus” charges.
The rule would require corporations to include all mandatory fees when communicating a price to consumers, a move that the administration says would make it easier for customers to compare prices — and encourage companies to compete to offer the lowest price.
“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 Chairwoman Lina Khan said in a call with reporters.
The White House says this move would prohibit surprise or mislabeled fees in event ticketing, banking, hotel booking, car and apartment rentals, as well as other industries — which the administration says currently cost Americans tens of billions every year — and require the full price be shown upfront.
The rule, as proposed, would also give the FTC “enforcement teeth,” giving the agency the power to secure refunds for customers and seek penalties against companies where possible, according to a release.
President Biden promised last year to take action against the extra charges as a means of combating inflation, and his White House has stressed that junk fees unnecessarily strain American consumers.
“Some people have asked me why the President of the United States is concerned about a $50 fee here and a $35 fee there,” said National Economic Council Director Lael Brainard.
“Those sneaky fees might not matter a lot to the wealthiest Americans, but they sure do matter for hardworking Americans sitting around a kitchen table trying to stay on top of their bills and have a little left over.”
As part of the administration’s action against junk fees, the Consumer Financial Protection Bureau (CFPB) is issuing an advisory opinion on the existing legal requirement for large banks and credit unions to let their customers get information about their accounts without paying excessive fees.
The CFPB is also set to propose a rule later this month that would require financial companies to let customers send their banking transaction data to other banks and companies, making it “easier for people to break up with their bank” while avoiding junk fees, the White House said in a release.
Brainard said that the new announcements represent some of the administration’s most comprehensive action on the issue to date.
The White House announced earlier this year that Ticketmaster’s parent company Live Nation, as well as SeatGeek, Airbnb and other companies had promised to roll out all-in pricing numbers.
Top housing rental companies Zillow, Apartments.com and AffordableHousing.com also committed earlier this year to being upfront about all fees for prospective renters on their websites.