Here’s what the FTC’s proposed ban on junk fees means for you

Jason Law
·3 min read

It drives Preston Ossman crazy whenever he buys concert tickets and surprise services fees are tacked on to the end of his purchase.

“You’re always hit with junk fees,” the Jamaica Plain resident said. “I think it’s fraud. It’s an unconscionable business practice and it’s unregulated.”

Unregulated, but not for long. The Biden Administration announced sweeping changes Wednesday to protect consumers from billions of dollars in junk fees.

“Junk fees cost American families tens of billions of dollars each year and inhibit competition, hurting consumers, workers, small businesses, and entrepreneurs,” the White House said in a statement.

The Federal Trade Commission is proposing a rule that would ban businesses from charging hidden and misleading fees, and require businesses to show the full price up front. Companies that fail to comply would face fines and have to provide refunds to consumers.

“By hiding the total price, these junk fees make it harder for consumers to shop for the best product or service and punish businesses who are honest upfront. The FTC’s proposed rule to ban junk fees will save people money and time, and make our markets more fair and competitive,” said FTC Chair Lina M. Khan.

The rule would apply to all kinds of industries, including event sales, hotels and lodging, apartment rentals and car rentals, the FTC said.

“I think this is really going to be good news for consumers,” MASSPIRG Legislative Director Deirdre Cummings said. Cummings said the junk fee problem exploded in the last five years.

“If somebody wants to see us a product and charge whatever they want, fine. But tell us the real price and we will make the choice if we want to pay that price,” Cummings said. “You can’t just make up a name for something and slap it on as a fee. You have to disclose what that is.”

Cummings said the FTC proposal should take effect sometime early next year.

“I suspect by next year in the spring, we will have some good strong protections and we will no longer face that problem of seeing a hotel room priced at $300 and ending up with a fee that [makes it] $450,” she said.

“I love the idea of the FTC regulating and asking for compliance and giving back to the working people,” Ossman said.

Cummings and MASSPIRG have a list of ways consumers can protect themselves from junk fees:

  • Read everything before you pay, sign, initial or agree.

  • Don’t sign or agree to anything that you didn’t actually read.

  • If there’s something you don’t understand, ask what the fee is for. Getting a clarification in writing (or via email) is better.

  • Don’t be afraid to walk away or from the transaction if you don’t like the extra fees.

  • Pay by credit card. Never by debit card. Undisclosed fees are easier to dispute with a credit card. And debit cards expose your whole checking account to all kinds of additional problems.

  • Note the names of anyone you talk with. Put a note in your calendar or send yourself an email of the day and time of day when you talked with the person. It helps you fight a fee if you can document that you talked with this person on this day and were told this.

  • Keep copies of all receipts, agreements, emails, texts.

  • If you’re hit with an undisclosed or misleading fee, complain to the company and file a complaint with your state attorney general’s office of consumer protection or the FTC.

This is a developing story. Check back for updates as more information becomes available.

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