Junk fees – those hidden and bogus charges that have found their way into a wide variety of transactions – are on consumers’ minds. Based on what they’ve told us, junk fees are on their last nerve, too. After receiving more than 12,000 comments about how those fees impact consumer spending and affect honest businesses, the FTC announced on October 11, 2023, a proposed Rule on Unfair or Deceptive Fees. As we mentioned then, we’re asking for further feedback – this time about the specifics of how the FTC proposes to address the issue of junk fees.
The online link to file public comments has gone live and we welcome the perspectives of consumers, researchers, business people, and anyone else who wants their voice heard about junk fees. It’s a simple process. Consider the questions the FTC is asking, read the proposed rule, click the COMMENT button, and let us know what’s on your mind. Of course, we invite formal responses with footnotes, citations, and the like – but we particularly welcome your practical, real-world insights about the FTC’s proposal.
File your comments by January 8, 2024.
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The FTC is responsible for American consumers receiving fair and equitable treatment in the marketplace. The removal of junk fees is a good start in the right direction. Removing junk fees provides consumers with additional spending power in managing individual and family finances, with the ability to save or invest in the marketplace.
W. James Bethea, MBA, MPA
And when you work on the "junk fees" please address the price of blocking advertising on our
cellular phones. They want $90 a month for most advertising to be blocked and I do not even
pay that much monthly to have the use of the phone!!!
I hate hiden fees. How can you find out about hidden fees?
There was a car dealership I had a negative experience with in 2023 that makes a great example on why this rule should be enforced and how I propose it should be done.
Stanley Chevrolet at 5697 W Broadway, McCordsville, IN had the pricing of a 23 Chevrolet Equinox listed at MSRP on their website within my price point. I was interested.
This dealership is an hour away. So, I contacted the dealership ahead of time to ask if there were any additional fees that would be added, and they confirmed the price on the website was the price on the Equinox. I drove the hour to see the vehicle and found they added a sticker addendum that included door guards (which were not on the vehicle yet) for $299 and an "appearance protection" package for $999. They said these sticker addendum items were non-negotiable.
I went back online, and I could not find any information about these added items. No fine print, pricing, or details about these additional fees and why there were non-negotiable.
If they are non-negotiable, why was it not on their website listed in the total cost for the car and why was it not disclosed when I called them ahead of time?
I wasted 2 hours of time driving to see a car that was now out of my price range.
They tried to sell me “appearance protection” for $999 and door guards for $299 and I unfolded what appeared to be a scam or deceptive junk fees.
These were items they said were on the “sticker addendum” and not negotiable. They tried to tell me the appearance protection was a partnership with a local company to protect the paint and interior should there be paint issues or a stain. They guarantee it up to 5 years.
I told them I did not want it and they said it was “already added” and I could not opt out of it. I asked for information about this, and they handed me a brochure. Well, I did some research on this brochure and it’s a literal product from a company in one of the Carolinas. This did not sound right because he said it was a local company, not a product purchased out of state.
I received a follow-up email from the sales rep (after I left) asking if I had any questions. I responded that the brochure he handed me was NOT from a local company and wanted to get more information. He responded saying this company has “local branches” in our area. I then asked for the local branch location and contact information and package details in writing so I can read the fine print.
I immediately get a call from his manager. This manager asked what questions I had, and I straight up told him that this” appearance package” sounded made-up because the brochure is from out of state, and I can’t seem to find any information from the sales agent or their website for the details.
I asked him what local branch they use, etc. He responded that he was able to “only for me” cut that price in half and they will “eat” the other half. He offered this instead of providing additional details. He said he had to get the “owners' approval” from the local company they contract with.
I found it comical as there was no way that this product that could be purchased online for $50 cost them anywhere near the $500 (let alone $999) they wanted to charge. Also, the manufacturer warranties the paint for a year and if I had a stain, I could just spot clean in myself and would not waste a 2-hour drive for that.
I again asked him, send me the details. I asked for the company that provided the service (not the product) and where is the local branch was located.
He could not give me an answer because he lied to me, admittedly. He told me that there is no local branch, that this company from out of state sends representatives to their dealership and trains them on how to clean and repair the paint. So, this $999 warranty appearance package was never provided by an outside vendor. It was just another product/junk fee the dealer added.
It was a cheap product they polished on themselves and called it an "appearance package". They told me they used the product to help protect the cars from bird poop while it sat on the lot. The customer should not be forced pay $999 for a product they used to protect their stock. Especially not $999 mandatory. I had no interest in driving 2 hours for spot cleans or minor paint repairs. And again, I could not buy this car unless I purchased this "package" which was NOT disclosed on their website or included in the price.
I ended the call at that point. I told him I will absolutely not buy from them since it was clear they were not honest and upfront with me.
I propose that all prices and fees be posted online that are non-negotiable when it comes to car dealerships in a clear and conspicuous manner. That this "total price" be the largest and first visible price seen by the customer.
These are material terms that should be disclosed up front. I would not have wasted a 2 hour round trip to see a car that was outside of my price point had I known ahead of time and impacted my decision to buy this car.
There should be digital record of all fees listed into the price and a breakdown of such fees and it should be a total price clear and large and be the first one the customer sees. It should not be only discoverable in person at the dealership. I believe anywhere the car is posted for sale, the total price including fees should be included clear and conspicuously.
For example. MSRP for a car at $25,299 with door guards at $299 and appearance package of $999.
The price online that is the largest and most conspicuous should say:
*MSRP is $25,299 with included features $299 Door Guards and Appearance Package $999. Click here for more details. (And then a link to information about these items, terms and why they are non-negotiable)
This would help the consumer make an educated decision of the car is in their price range, view the additional features, and also deter the dealership from adding bogus fees that are baseless and hold no value to the customer. There should be consequences for breaking this rule and a channel for consumers to report violations.
The proposal is excellent. I hope that it includes the situation I encountered in which I was buying a ticket to an event (only sold by one company) and after I selected my seats the price changed on the website before I paid. The price had increased significantly, but the website did not show anywhere why the price had gone up and what the additional fees were for. I had only one choice at that point, to buy the ticket and go to the event or not buy the ticket. It was only after I paid for the ticket that it showed a breakdown of the additional fees. The breakdown of the additional fees should be shown in advance of payment to show the taxes, event location fees, and any other fees in addition to the cost of the seats at the event.
This should include the idea that tipping should not be a part of a retail transaction and the strange "errors" that have been happening at Walmart. This should also include overdrafts and late fees of more than $5-10 fee - it's over a billion dollars that are taken from poor people this way.
Thank you for supporting consumers. It is time for the FTC to approve a ban on junk fees. We all have been abused with junk fees coming from everywhere and we felt abandoned and ignored. It's time to stop the abuse of hitting customers with junk fees that have never been explained in detail and to customer satisfaction. Enough is enough and this abuse needs to be stopped ASAP.
Hi, I enjoyed reading your article! All of your tips and suggestions are quite helpful. Thanks for sharing!