FTC Unveils Rule To Ban Junk Fees, Citing Hidden Charges In Internet Plans
The Federal Trade Commission is proposing to pass a rule that would ban junk fees, preventing vendors —including tech companies and apps— from making bogus charges on consumer bills.
On Tuesday, the FTC introduced the new rule after asking the public for feedback on a potential regulation to stop the junk fees. The Commission ended up receiving over 12,000 comments, a majority of which called for government action or recounted negative experiences with paying such fees.
“In particular, they raised concerns that sellers do not advertise the total amount consumers will have to pay, and disclose fees only after consumers are well into purchasing transactions, harming both consumers and businesses,” the FTC said.
“They also stated that sellers misrepresent or do not adequately disclose the nature or purpose of fees, leaving consumers wondering what they are paying for or believing that fees are arbitrary, and that they are getting nothing for the fees charged,” the Commission added.
The public commentators noted the junk fees can be found across the market, including for hotel rooms, renting an apartment, online ticket sales, and at internet service providers (ISPs) and over mobile apps. For ISPs, this can include omitting “installation and activation fees, equipment fees, penalties for exceeding data caps, and early termination fees, in advertised prices,” the FTC said.
Some commentators also claimed food delivery apps were another offender by charging prices “not reflected in advertised food prices, and that the nature or purpose of these fees is not always clear or is misrepresented,” the Commission added.
In response, the FTC is proposing new regulations to crack down on the junk fees on the grounds they constitute
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