The Federal Trade Commission (FTC) proposed a new rule aimed at junk fees, including those attached to concert ticket sales. The newly proposed rule follows an FTC initiative launched last year to get public input regarding junk fees, which the agency defines as “unnecessary, unavoidable, or surprise charges that inflate costs while adding little to no value.”
More than 12,000 comments were submitted by the public in response to the FTC inquiry regarding junk fees. According to the FTC, junk fees can cost consumers over $10 billion annually in unexpected charges.
“All too often, Americans are plagued with unexpected and unnecessary fees they can’t escape,” FTC Chair Lina M. Khan said. “These junk fees now cost Americans tens of billions of dollars per year — money that corporations are extracting from working families just because they can. 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.”
In June, after a meeting at the White House with President Joe Biden, Ticketmaster, Live Nation and SeatGeek agreed to commit to “upfront, all-in pricing” for online ticket sales. The agreement with Ticketmaster, Live Nation and SeatGeek called for ticketing fees to be disclosed upfront or incorporated into the overall advertised price. The meeting also included representatives from Airbnb, highlighting Biden, and now the FTC’s, wider scope in targeting junk fees.
In addition to buying online concert tickets, the FTC cited hotel room charges, apartment rentals and utility bills as among the many other sources of junk fees. The FTC states:
[T]he proposed rule would ban the following junk fee practices that consistently confuse and trick consumers:
Hidden Fees. Consumers told the FTC that dishonest businesses routinely engage in bait-and-switch pricing tactics that hide mandatory fees and deceive consumers about the price. This is because fees imposed later, but before the purchase is made, significantly increase the total that consumers pay. Accordingly, the proposed rule would prohibit businesses from advertising prices that hide or leave out mandatory fees; and
Bogus Fees. Many consumers also said that they often do not know what fees are for, because dishonest businesses routinely misrepresent or fail to adequately disclose the nature or purpose of the fees. The rule would prohibit sellers from misrepresenting fees and require them to disclose upfront the amount and purpose of the fees and whether they are refundable.
Public comments for the FTC’s proposed junk fees rule change won’t open until after it is published in the Federal Register. Read the full text of the FTC’s Trade Regulation Rule on Unfair or Deceptive Fees here.
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