FTC Publishes ANPR on Deceptive and Unfair Practices Relating to Junk Fees  

The FTC recently issued an Advance Notice of Proposed Rulemaking (ANPR) seeking comments on whether and how it should address deceptive or unfair practices involving junk fees.

The ANPR defines “junk fees” as unfair or deceptive fees that are charged for goods or services that have little or no added value to the consumer, including goods or services that consumers would reasonably assume to be included within the overall advertised price.  The term “junk fees” also includes “hidden fees,” which are fees that are disclosed only at a later stage in the consumer’s purchasing process or not at all.

The FTC states that while certain unlawful fee practices may be covered by existing rules and statutes, the agency believes that it currently lacks authority to seek redress for consumers or penalties against violators for everyday junk fees that fall outside those specific prohibitions.  As a result, the FTC is requesting input on whether and how it should use its authority under the FTC Act to address deceptive or unfair acts or practices involving junk fees.

In particular, the FTC is seeking comments on the agency’s plans to address the following practices:

• Misrepresenting or failing to disclose clearly and conspicuously on an advertisement or in marketing: (i) the total cost of any good or service for sale, (ii) the existence of any fees, interest, charges, or other costs that are not reasonably avoidable for any good or service, or (iii) the nature or purpose of any fees, interest, charges, or other costs;
• Misrepresenting or failing to disclose clearly and conspicuously: (i) whether fees, interest, charges, products, or services are optional or required, or (ii) any material restriction, limitation, or condition concerning any good or service that may result in a mandatory charge in addition to the cost of the good or service or that may diminish the consumer’s use of the good or service, including the amount the consumer receives;
• Misrepresenting that a consumer owes payments for a product or service that the consumer did not agree to purchase; and
• Billing or charging consumers for fees, interest, goods, services, or programs: (i) without the consumer’s express and informed consent, or (ii) that have little or no added value to the consumer (or that consumers would reasonably assume to be included within the overall advertised price).

Comments on the ANPR must be submitted to the FTC on or before January 9, 2023.