Published in the Federal Register, the FTC is soliciting public comments on a new proposed rule addressing unfair or deceptive fees.
Junk Fee Rule to Address “Unfair or Deceptive Fees” Added to Purchases
The new proposed rule comes after the Consumer Financial Protection Bureau (CFPB) requested public comment on “fees levied on consumer financial products or services.” This ultimately led to the FTC looking into the “junk fees” on a broader level, which affect travelers on a daily basis.
Resort fees originated in the United States, dating back to 1997. First found at popular resort destinations, the trend has expanded to everything from full-service properties around the world to two-star hotels in America. Hotels usually justify the additional fee beyond the daily rate as a way to pay for access to pools, free in-room internet and other amenities.
“Junk fees impose substantial economic harms on consumers and impede the dissemination of important market information,” the Advance Notice of Proposed Rulemaking document reads. “A Commission analysis of hotel ‘resort fees’ that were mandatory and undisclosed in the posted room rates concluded such fees ‘artificially increas[e] the search costs and the cognitive costs’ for consumers carrying out the transaction…These fee practices can be found throughout the economy but appear to be particularly widespread in markets for travel such as hotels, room-sharing, car rentals, and cruises.”
As a result, the FTC is asking for public input on a proposed rule to address resort fees and other “junk fees” imposed upon the customers. In particular, the rule would make it “an unfair or deceptive act or practice and unfair method of competition to advertise or solicit the sale of a product or service without prominently disclosing the entire price to be paid by the customer inclusive of all unavoidable fees and service charges (excluding government taxes).” Comments will be accepted through January 9, 2023 and can be shared on Regulations.gov under docket FTC-2022-0069.
Proposed Rule Marks Second Time Government Asked Flyers for Advice This Year
The new proposed rulemaking marks the second time in 2022 where flyers were asked for advice on future policies. In August 2022, the Federal Aviation Administration asked for comments on proposed airline safety measures in order to potentially create a minimum seat dimension for airlines.
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Source: frugal travel guy