Viewpoints Explained: Tired Of Surprise Fees? So Is The FTC

This is Viewpoints Explained…

Americans have been feeling the squeeze when it comes to paying for basic goods and services. What’s even more frustrating is the surprise appearance of extra fees at checkout. These unexpected charges have a name—’junk fees’—and now the federal trade commission is taking action to address them.

In December, the FTC announced a so called “Junk Fees Rule” which prohibits shady pricing tactics used to hide costs across various industries… including live-event ticketing, hotels, and vacation rentals. The rule came after a 55-page report revealed that consumers are paying billions of dollars a year in unnecessary, bait-and-switch, or surprise charges that inflate prices while adding little to no value.

For example, from 2018-2023, five U.S. Airlines made more than $12 billion on seat selection fees alone. According to a senate subcommittee report, United Airlines charged as much as $319 for extra legroom seats while Delta charged as much as $264.

The junk fees rule also requires businesses to advertise their total pricing upfront and to be transparent about all fees, including shipping and taxes – before the consumer enters their payment information. The FTC estimates that the rule will save consumers up to 53 million hours per year of wasted time. The agency estimates this time savings is the equivalent of more than $11 billion over the next decade.

The impact on our wallets remains to be seen, but at least consumers can expect greater transparency, allowing them to make more informed shopping decisions.