FTC Extends Public Comment Period on Proposed Rule Prohibiting Hidden ‘Junk Fees’

Federal Trade Commission (FTC)

The Federal Trade Commission (FTC) is extending the public comment period on a proposed rule aimed at banning “junk fees,” an industry term for hidden and deceptive charges that can inflict severe financial damage on consumers and undermine fair business practices.

Announced on October 11, 2023, the proposed rule seeks to prohibit these often undisclosed fees, which, according to FTC estimates, can annually cost consumers tens of billions of dollars in unforeseen expenses. The original deadline for public comments was set for January 8, 2024. However, given its proximity to the holiday season, the FTC has decided to extend the deadline by 30 days to February 7, 2024, allowing more time for the public to voice their opinions and concerns.

Junk fees have long been a contentious issue, with consumers and advocacy groups expressing frustration over the unexpected charges that often appear on bills for services ranging from telecommunications to travel bookings. These hidden costs can make it difficult for consumers to accurately compare prices and make informed decisions, while also disadvantaging businesses that provide upfront pricing.

The FTC’s proposed rule aims to level the playing field by requiring companies to disclose all fees upfront, thereby promoting transparency and fostering consumer trust. However, the proposal has stirred debate within various industries, with some arguing that it could lead to increased prices as businesses seek to recoup lost revenue.

The decision to extend the public comment period reflects the FTC’s commitment to ensuring a thorough and inclusive review process. By providing an additional month for comments, the FTC is seeking to encourage a broad range of input from consumers, businesses, and other stakeholders. This feedback will be crucial in shaping the final rule and determining how it is implemented and enforced.

The extension was approved unanimously by the FTC Commission in a 3-0 vote. Information on how to submit comments can be found in the Federal Register notice announcing the extension.

As we move into 2024, the FTC’s proposed rule promises to be one of the key consumer protection issues on the agenda. With the extended deadline for public comments now set for February 7, 2024, all eyes will be on the FTC as it seeks to navigate the complexities of this issue and strike a balance between protecting consumers and fostering a fair and competitive business environment.

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