One step closer to the end of junk fees

The FTC’s proposed rule is remarkable in its brevity and simplicity, despite the 161-page length of the explanatory statement and background

Oct 18, 2023

While the fate of the legislation on junk and other charges remains highly uncertain, the FTC, after only eight months of evaluating some 12,000 comments, has proposed a formal regulation on junk fees. The proposal has not been published in the Federal Register yet, but that step should occur soon. The customary 60-day period for comments will then begin.

Key takeaways

  • The proposed rule does not limit the amounts that businesses may charge for ancillary services BUT note that the definitions of “Government Charges” and “Shipping Charges” prevent a business from artificially inflating the charges; the charges shown under these terms must be the actual charges to be paid by the business;
  • It is irrelevant that another business may provide the charged service. The example used was, “if an online travel agent advertises a price for a hotel room provided by a hotel chain, the online travel agent must display the Total Price, inclusive of mandatory fees charged by the hotel chain;”
  • The author expects continued resistance from multiple industries, and possible legal challenges in the courts, if the FTC proceeds with these rules, so nothing substantive is likely to happen any time soon.

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