FTC issues advance notice of proposed rulemaking on “junk fees”

On October 20, 2022, the Federal Trade Commission (“FTC”) announced that it is issuing an Advance Notice of Proposed Rulemaking (“ANPR” or “Notice”) to address “junk fees,” a term used in the Notice to refer to “unfair or deceptive fees that are charged for goods and services that have little or no added value to the consumer.”

In announcing the Notice, the FTC said it is seeking public comment on “the harms stemming from junk fees and associated junk fee practices and on whether a new rule would better protect consumers.”  As summarized in the FTC’s press release, the types of fees the FTC is seeking comment on include:

• Unnecessary charges for worthless, free, or fake products or services: Consumers may be slammed with charges for products or services that cost companies nothing to provide, are available for free, or should be included as part of the purchase price.  Companies might also upsell consumers on fake products or services that either have no value or never materialize.
• Unavoidable charges imposed on captive consumers: Consumers may be forced to pay junk fees because they have no way to avoid or opt out of them.  They might be dealing with a company with a monopoly or exclusive rights that can extract fees because there is no competing option.  Or consumers might get hit with fees after they have already sunk costs into a product or service, and they can’t easily walk away.
• Surprise charges that secretly push up the purchase…