WASHINGTON, DC (CelebrityAccess) – President Joe Biden announced Wednesday (October 11) a new rule the Federal Trade Commission (FTC) is proposing to ban businesses from charging hidden, surprise or misleading fees – called “junk fees,” including companies from ticket sellers to banks.
The proposed rule would require all businesses to display every fee and the total price of goods or services upfront, allowing the FTC to slap financial penalties on those who do not comply. The rule would also allow the Consumer Financial Protection Bureau (CFPB) to monitor banks to ensure they are providing basic information such as account balances or payoff amounts for loans free of charge.
The rule the FTC is proposing would state, “It is an unfair and deceptive practice and a violation of this part for any Business to offer, display, or advertise an amount a consumer may pay without Clearly and Conspicuously disclosing the Total Price.”
The proposed rule would allow add-on fees for any additional products or services. Still, it bans junk fees, which Biden defines as “mandatory fees that hide the full cost of a good or service, surprise fees that customers learn about after a purchase, predatory fees targeting customers with few options or fraudulent fees.
Some examples of service fees are those charged by sports and concert ticket sellers such as Ticketmaster (TM), Vivid Seats or StubHub. Still, they also include ATM, AirBnB, and DoorDash or convenience fees charged for completing a transaction online.
The topic of junk fees was brought to the forefront when TM and parent company Live Nation (LN) received widespread condemnation during the Taylor Swift “Eras Tour” ticket sales. Additionally, the company received criticism for technical issues and inflated prices due to scalpers and second-hand ticket-selling websites. Swifties around the world bashed the company, and it made the headlines. Due to that, the Senate Judiciary Committee held a hearing that forced TM and LN executives to testify. After pressure from Biden, several companies voluntarily agreed to remove all junk fees.
“Folks are tired of being taken advantage of and played for suckers,” Biden said outside the White House. He called the junk fees “hidden charges that companies sneak into your bill to make you pay more because they can – charges that are taking real money out of the pockets of American families.”
According to Forbes, the proposed measure will have to undergo the federal process for rulemaking, which allows citizens to submit public comments and requires federal agencies to review those submissions. Biden has called on Congress to pass the Junk Fee Prevention Act to codify the measure into law and protect it from any legal challenges.
