Tackling Junk and Hidden Fees

The Federal Trade Commission recently proposed rules that would stop businesses from charging hidden fees. The agency estimates that junk fees cost consumers tens of billions of dollars per year. The new rules would prohibit companies from jacking up bills with hidden and bogus fees and instead require that businesses clearly disclose their fees to customers. The new rules would also allow the FTC to order full refunds to consumers for any business that continues to bill the prohibited fees. Other federal agencies are joining the fight against these fees, including the Federal Communications Commission, the Consumer Financial Protection Bureau, the Department of Housing and Urban Development, and the Department of Transportation. This is something that has been badly needed for a long time. It’s too bad that the FTC is the agency doing this. The FTC typically only brings proceedings against specific companies, so compliance with this rule is going to be hit or miss. Smaller companies might continue to use the practice in the hope that they are small enough to stay under the FTC’s radar. But perhaps the FTC will levy large fines while also ordering full refunds against a few companies that don’t comply and scare most companies into compliance.