House lawmakers call for ban on “junk fees”

by | Feb 7, 2024

House Democrats Anna Eskamani and Angie Nixon pledged support for a Federal Trade Commission proposal that would ban misleading advertising by excluding mandatory fees from prices, arguing it deceives consumers and burdens local businesses.

A pair of House Democrat lawmakers are lobbying the Federal Trade Commission (FTC) in support of a proposed trade regulation rule that would ban companies from misrepresenting the total costs of goods and services by omitting mandatory fees from advertised prices.

Reps. Anna Eskamani and Angie Nixon both penned letters in support of the proposal this month, with the former contending that junk fees cost the average American family more than $3,000 per year and can raise consumer prices by 20 percent.

“Consumers struggle to comparison shop, as advertised prices become unreliable indicators of cost,” Eskamani wrote. “Honest local businesses, unwilling to engage in these deceptive practices, find themselves struggling to afford basic necessities.”

Nixon supplemented the sentiment, referring to hidden fees as “exploitative” and an “anti-competitive business practice.”

“By concealing the actual cost of a product until consumers have invested time and effort into a purchase, these fees lead to families exceeding their planned expenditures,” said Nixon.

Eskamani further asserted that the abolition of junk fees will help lower the broader cost of living.

“Ending this practice is one of the clearest steps we’ve seen from the administration to tackle the rising cost of living,” she said.

The FTC announced a proposal last year for a new rule titled “Rule on Unfair or Deceptive Fees,” aimed at tackling hidden fees in the pricing of goods and services. The initiative seeks to address and prevent practices where businesses do not include mandatory fees in their advertised prices, or where they misrepresent what the fees are for.

The proposal, if adopted, would broadly affect various industries, ranging from hospitality, including hotels and short-term lodging, to live entertainment ticket sales, telecommunications, financial services, and automotive sales, among others.

The Consumer Financial Protection Bureau is taking similar action to require large banks and credit unions to provide basic information to consumers without charging fees for basic services like checking bank account balances, obtaining a payoff amount for a loan, or getting account information needed for applications.


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