FTC proposes ban of junk fees on tickets

Today (October 11), the Federal Trade Commission has announced a new proposal to ban ticket junk fees — hidden additional costs for consumers that are anti-competitive for rival businesses. Last year, the agency asked the public whether this would help them and it received over 12,000 comments about how junk fees affect their businesses and spending.

According to the FTC, hidden fees are bait-and-switch pricing practices that hide mandatory fees and significantly increase the total cost of a product or service. Bogus fees are costs that misrepresent or don't properly disclose the purpose of the fee. The proposal would ban these two types of fees that "confuse and trick" customers.

"All too often, Americans are plagued with unexpected and unnecessary fees they can’t escape," said FTC Chair Lina M. Khan. "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.”

Consumers spend over 50 million hours per year searching for total prices in live-ticking and short-term lodging, the FTC estimates. This is equivalent to $10 billion in "time savings" over the next decade if this rule were to be approved.

Consumer Financial Protection Bureau Director Rohit Chopra added: “Americans are fed up with the junk fees that are creeping across the economy. The FTC’s proposed rule will protect families and honest businesses from race-to-the-bottom abuses that cost us billions of dollars each year. If finalized, the CFPB will enforce the rule against violators in the financial industry and ensure that these firms play fairly.”

Federal Communications Commission Chairwoman Jessica Rosenworcel said: “No one likes surprise charges on their bill. Consumers deserve to know exactly what they are paying for when they sign up for communications services. But when it comes to these bills, what you see isn’t always what you get. Instead, consumers have often been saddled with additional junk fees that may exorbitantly raise the price of their previously agreed-to monthly charges.”