The FTC wants to ban hidden 'junk fees' that jack up the price of your purchases

A proposed rule aims to prevent businesses from surprising customers with extra charges when it's time to pay.

Kevin Wurm / Reuters

A new rule proposed by the Federal Trade Commission (FTC) would ban the sneaky fees some companies slap onto their services at checkout time. Thanks to these junk fees, which have crept into the process of everything from buying concert tickets to booking vacation rentals, the prices consumers initially see are often nowhere near what they end up paying.

The Biden administration has been putting pressure on companies like Ticketmaster and Airbnb to improve their ways, and both recently committed to providing more transparency about their extra charges. The FTC wants to take things a step further by banning the common deceptive tactics altogether. The proposed rule targets both hidden, mandatory fees that aren’t properly disclosed upfront and ambiguous “bogus fees” that leave consumers unsure of what it is they actually had to pay more for.

These practices are misleading, with companies often resorting to “bait-and-switch pricing and misrepresenting the nature and purpose of fees,” the FTC argues in the proposal notice. Under the proposed rule, businesses would have to include these additional fees in their advertised prices, explain what each fee is for and let customers know if any of it is refundable.

The FTC took comments from the public last year to assess the impact of junk fees and ultimately gathered over 12,000 responses to shape its proposal. It’s now opening up comments for 60 days so consumers can weigh in on the rule it’s put forth. “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,” said FTC Chair Lina M. Khan. The proposed rule would "save people money and time, and make our markets more fair and competitive.”