Washington, D.C. — In support of President Biden’s efforts to eliminate unfair fee and pricing practices across the economy, the American Economic Liberties Project today released model legislation for Congress to comprehensively ban junk fees. Economic Liberties also released a complementary playbook for state lawmakers, that details ways they can engage in the fight against junk fees in their own communities.

“Junk fees are not just annoying. They are a significant detriment to fair competition and a defining feature of concentrated markets that cost working families tens of billions every year,” said Katherine Van Dyck, Senior Counsel at the American Economic Liberties Project. “Corporations use junk fees to mislead consumers and undermine honest competitors. The Biden administration, especially at the CFPB, FTC, and DOT, is doing great work to eliminate these deceptive tactics, but a comprehensive, legislative solution is still needed. Our proposal offers a roadmap for Congress and state legislatures to eliminate junk fees for good.”

Junk fees have grown in prevalence over the years, with online sellers using methods like drip pricing and partitioned pricing to conceal the true cost of the goods and services they sell to consumers and businesses alike. The White House estimates that junk fees are costing consumers tens of billions of dollars each year, with $9 billion per year in banking alone.

But there is growing momentum to take action against junk fees from both state and federal policymakers. Notably, in President Joe Biden’s 2023 State of the Union Address, he addressed the proliferation of junk fees in the economy and urged Congress to pass a Junk Fee Prevention Act. At the state level, legislators have drafted a variety of bills tackling junk fees across different industries and sectors. Junk fee legislation has received overwhelming bipartisan support, with over three-quarters of American adults somewhat or strongly supporting these proposals.

Economic Liberties’ new model legislation would set the gold standard for a junk fee bill by eliminating key loopholes in consumer protection law and mandating “all-in pricing.” It would protect buyers from predatory advertising that lures them into a purchase before they know they full cost, by:

1. Require that sellers disclose the total cost of a good or service up front, inclusive of all fees and any services that a reasonable consumer would expect to be part of the price;
2. Clarify that junk fees are unfair and deceptive practices, even when disclosed just before a buyer incurs a financial obligation; and as a result
3. Create a more competitive and transparent marketplace.

In a separate policy brief, Economic Liberties also outlines the best practices for state legislators that want to effectively prohibit junk fees, as well as important provisions for enforcement. These best practices are also centered around the same framework of requiring “all-in” pricing, in which companies must advertise the total price upfront, inclusive of all unavoidable fees and any other fees that a consumer would reasonably expect to be included in the price.

Read “A Model Junk Fee Prevention Act,” here.

Read “How States Can Take on Junk Fees,” here. 

Learn more about Economic Liberties here.

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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.