A Close Look at the Federal Trade Commission’s Proposed Rule to Regulate “Junk Fees”

Consumer Finance Monitor

In October 2023, the FTC issued a proposed “Rule on Unfair or Deceptive Fees” targeting so-called “junk fees.” Our special guest is Stacy Cammarano, Staff Attorney in the FTC’s Bureau of Consumer Protection, Division of Advertising Practices, and a lead attorney on the proposal. After reviewing how the FTC has previously used its enforcement authority to address “junk fees,” we discuss some of the key issues identified in comments received by the FTC on its October 2022 Advance Notice of Proposed Rulemaking on “junk fees.” We then look at the price and fee disclosures that would be required by the proposal, the businesses that would be covered, and examples of charges for mandatory ancillary goods or services by various industries that would have to be included in disclosed pricing. We also look at the relationship of the FTC’s proposal to “junk fees” initiatives of other federal agencies, such as the CFPB, and to state initiatives, and consider the impact of the U.S. Supreme Court’s AMG decision on the FTC’s use of rulemaking. We conclude with a discussion of likely next steps in the rulemaking process and what businesses can be doing now to reduce compliance risk.

Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, leads the discussion.