Biden Administration Bans Hidden Junk Fees
Washington, D.C. – Today, the Biden-Harris Administration announced that the Federal Trade Commission (FTC) has issued a new rule banning hidden junk fees that pad the cost of everyday goods and services. The new rule requires businesses to clearly and conspicuously disclose all fees upfront, before consumers make a purchase.
“Junk fees are a hidden tax on American consumers,” said President Biden. “They add up to billions of dollars every year, and they disproportionately burden low-income and middle-class families. That’s why I’m directing the FTC to crack down on these fees and protect consumers.”
Junk fees are sneaky charges that businesses add to the cost of goods and services without telling consumers upfront. These fees can include things like processing fees, handling fees, convenience fees, and fuel surcharges. They often catch consumers by surprise and can make it difficult to budget and plan for expenses.
The FTC’s new rule will help to protect consumers from these hidden fees. The rule requires businesses to:
- Disclose all fees upfront, before consumers make a purchase.
- Use clear and conspicuous language that is easy for consumers to understand.
- Make it easy for consumers to compare fees between different businesses.
The rule will also give the FTC new enforcement tools to crack down on businesses that violate the law. The FTC can now impose civil penalties of up to $50,000 per violation.
“This new rule is a major victory for consumers,” said FTC Chair Lina Khan. “It will help to level the playing field between consumers and businesses and save consumers billions of dollars every year.”
The FTC’s new rule is a part of the Biden-Harris Administration’s ongoing efforts to protect consumers from unfair and deceptive practices. The Administration has also taken action to crack down on predatory lending, student loan scams, and other consumer scams.
Impact of the New Rule
The FTC’s new rule will have a significant impact on businesses and consumers. Businesses will need to change their practices to comply with the rule, and consumers will have more information to make informed decisions about their purchases.
The rule is expected to save consumers billions of dollars every year. A study by the Consumer Financial Protection Bureau found that consumers paid $120 billion in junk fees in 2019. The FTC’s rule will help to reduce these costs by requiring businesses to be more transparent about their fees.
The rule will also make it easier for consumers to compare fees between different businesses. This will help consumers to find the best deals and avoid businesses that charge excessive fees.
Enforcement
The FTC will be responsible for enforcing the new rule. The FTC can investigate businesses that it believes are violating the rule and can impose civil penalties of up to $50,000 per violation.
Consumers who believe that they have been charged a junk fee can file a complaint with the FTC. The FTC will investigate the complaint and may take action against the business if it finds that the business has violated the rule.
Conclusion
The FTC’s new rule is a major victory for consumers. It will help to protect consumers from hidden junk fees, save consumers billions of dollars every year, and make it easier for consumers to compare fees between different businesses.
Statement from President Joe Biden on the FTC Banning Hidden Junk Fees
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