FTC Must Stem Tide of Junk Fees Pandemic

“American consumers, workers, and small businesses today are swamped with junk fees that frustrate consumers, erode trust, impair comparison shopping, and facilitate inflation.”

These are the words of the FTC, which is proposing the start of a rulemaking proceeding to address junk fees (which it defines as “unfair or deceptive fees that are charged for goods or services that have little or no added value to the consumer”) and hidden fees (which it defines as “fees for goods or services that are deceptive or unfair, including because they are disclosed only at a later stage in the consumer’s purchasing process or not at all”).

Today, TINA.org submitted a comment supporting the FTC’s proposed action.

The majority of U.S. consumers are victimized by junk and hidden fees. In fact, many consumers are paying hundreds of dollars per year in such deceptive fees, a dollar figure that is continuously growing. Moreover, because these fees are not properly disclosed, consumers are not able to meaningfully price shop for products and services, thereby “undermin[ing] competition” and causing “a serious ripple effect on people’s finances.” And as these fees add up, many consumers experience greater difficulty meeting basic financial needs, such as rent, utility and food. According to consumer finance experts, hidden fees are “quietly draining the wallets of middle-class Americans.”

Over the last 10 years, TINA.org has taken an active role in working to hold marketers accountable for imposing junk and hidden fees. From conducting numerous investigations, communicating directly with many companies using these tactics and filing several complaints with regulators (including ones against Bob’s Discount Furniture and Rihanna’s lingerie brand Savage X Fenty) to working to educate consumers by publishing information about such pitfalls on its website, TINA.org’s experience demonstrates that these fees are a serious, widespread and insidious problem present throughout the marketplace across a wide range of industries.

It’s time the FTC implement an effective and efficient tool to rein in this harmful problem.

To read TINA.org’s full comment, click here.