Biden Administration proposes sweeping ban on junk fees

October 11, 2023

The Federal Trade Commission (FTC) on Wednesday proposed a rule to ban any hidden and bogus junk fees virtually across the board. 

President Biden  in his State of the Union Address this past February promised to crack down on junk fees across numerous industries. Since then, his Administration has targeted the hidden fees in such industries as health care, rental housing, air travel and credit cards.

The FTC’s proposal would expand the proposed bans across the board, including everything from concert tickets to hotel rooms and utility bills.

“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 Chair Lina Khan said on a call with reporters. “Violators will be subject to civil penalties and be required to pay back Americans that they tricked.”

The FTC’s proposal was announced simultaneous to the Consumer Financial Protection Bureau (CFPB) announcing that its own proposal to block large banks from charging junk fees for basic consumer services. 

From the White House on Wednesday, President Biden spoke about efforts to make junk fees illegal, calling Wednesday’s actions by the FTC and CBPB the “most comprehensive” of his Administration, and that they will target “tens of billions of dollars in junk fees across the economy” for crackdown. 

He said numerous companies have already responded to his call for action and have adopted “all-in upfront pricing,” where they fully disclose their fees upfront “and there’s no real surprise in the end.” 

According to Biden, hidden fees can add as much as an additional 20% to the cost of a good or service, and he further called on Congress to pass the Junk Fee Prevention Act, which was introduced in the Senate in March.

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