U.S. President Joe Biden speaks about protecting consumers from hidden junk fees during an event at the South Court Auditorium in the Eisenhower Executive Building on June 15, 2023 in Washington, DC.
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The Federal Trade Commission on Tuesday passed rules that require ticket sellers, hotels and vacation rental sites to disclose total costs, including upfront fees, and prohibit them from hiding additional fees until the last minute.
The rule is one of the final pieces of President Joe Biden’s broader crackdown on junk fees, which drive up consumer costs without providing tangible benefits.
“We all know the experience of running into hidden fees at the very end of checkout. These junk fees creep into your bill and companies end up charging you more just because they can.” “You’re going to be forced to pay a lot more fees. These fees add up and take real money out of the pockets of “Americans,” Biden said in a statement.
President-elect Donald Trump could seek to rescind the rule for further review, and Republicans in control of Congress could seek to override it by law.
The rule would require advertised prices to include service fees, resort fees, and other charges commonly added to reservations. This rule is narrower than what the FTC proposed in 2023 to broadly ban hidden and deceptive fees across industries.
“I urge enforcement agencies to continue cracking down on these illegal fees, and I urge state and federal policymakers to build on this success and encourage broader economic action,” FTC Chair Lina Khan said in a statement. We encourage the enactment of legislation to prohibit unfair and deceptive junk fees.”
The FTC estimates that the rule would save U.S. consumers 53 million hours a year by eliminating the need to scrutinize the total cost before making a purchase.
As Biden’s regulators take aim at inflated and hidden fees, their efforts face lawsuits from companies and business interests.
A Texas judge has blocked a rule that capped credit card late fees, and a New Orleans appeals court blocked a requirement that airlines disclose baggage and other fees upfront. The case is ongoing.
