Washington, D.C. — A broad coalition of consumer advocacy groups submitted a joint comment to the Federal Trade Commission in response to its November 2023 Notice of Proposed Rulemaking on junk fees, supporting the Commission’s proposal to ban hidden and misleading fees across the economy and create a fair marketplace for honest businesses and consumers. The comment suggests several changes to strengthen the rule, and it includes an appendix of over 1,000 stories, collected by Consumer Reports, from Americans across the economy expressing their frustration with junk fees.

“Junk fees are not only annoying, they are deceptive and can push vulnerable people into poverty and a crushing cycle of debt,” said Erin Witte, Director of Consumer Protection at Consumer Federation of America. “Being honest about the price is not complicated and getting the FTC’s rule across the finish line will level the playing field for consumers.”

“Whether it’s in rental housing or concert tickets, junk fees have artificially increased prices across the economy, disadvantaging honest businesses’ ability to compete,” said Erik Peinert, Research Manager and Editor at the American Economic Liberties Project. “The FTC’s proposed rule is a strong and simple one: require sellers to disclose the total price up front. Consumers will know how much they’re paying at the outset and be able to compare between competing sellers.”

“Junk fees, added on top of sky-high rent, put safe and decent rental housing further out of reach for low-income renters,” said Ariel Nelson, staff attorney at the National Consumer Law Center. “An FTC rule that requires landlords to be honest about the total price of an apartment and the purpose of the fees they charge will go a long way toward helping renters to effectively budget and stay in their homes. It will also benefit landlords who, with the help of certain rental housing listing platforms, are already advertising the total price of rent up front.”

“Consumers have been getting nickel and dimed – or dollared and 20 dollared – by deceptive fees for too many years. We welcome an end to junk fees,” said Teresa Murray, Consumer Watchdog Director for U.S. PIRG.

“Junk fees are creeping into nearly every purchase we make, misleading consumers about the true cost of products. The FTC’s common-sense rule simply tells sellers to give consumers the full price up front—without burying the fees or misrepresenting them,” says Ruth Susswein Director of Consumer Protection at Consumer Action.

“Americans are fed up with hidden junk fees that can really add up and cause financial hardship for families living on tight budgets,” said Chuck Bell, advocacy program director for Consumer Reports. “The FTC’s proposed ban on hidden junk fees will create greater transparency and accountability around pricing that will help consumers find better deals and foster more competition in the marketplace.”

“No consumer likes getting tricked into paying higher prices,” said Eden Iscil, Public Policy Manager at the National Consumers League. “These junk fees throw off household budgeting and make comparison shopping nearly impossible. The FTC is doing critical work and cracking down on this problem.”

The FTC’s proposed rule seeks to eliminate “hidden and bogus” junk fees that are added to the price over the course of a purchase, hiding the real price, preventing consumers from comparing between different sellers. Junk fees distort competition and allow deceptive sellers to increase prices. It creates an uneven playing field where businesses who do not hide their prices in this way are at a disadvantage, because their prices look higher by comparison. The rule would ensure that sellers disclose all mandatory fees up front, facilitating easier price comparison for consumers, and prohibit bait-and-switch pricing tactics. Furthermore, businesses will not be able to misrepresent fees or be vague about their purpose.

The coalition comment also urges the FTC to strengthen several provisions in the proposed rule to prevent companies from using alternative deceptive pricing tactics to get around the rule. In particular, the coalition supports stronger rules around price disclosures for optional fees, prohibiting default selection for optional purchases, and using the well-established “reasonable consumer standard” to enforce the rule: if a reasonable consumer would expect something to be included in the purchase, it should be.

Read the full comment here.

Learn more about Economic Liberties here.

###

The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.