FTC Launches ANPR on ‘Junk’ Fee Crackdown

The Federal Trade Commission has announced that it is “exploring” a rule to crack down on “junk” fees that it says are proliferating throughout the country, and one of the categories of fees could have applications in the accounts receivable management industry.

In issuing the Advanced Notice of Proposed Rulemaking (ANPR), the FTC said it is seeking to understand whether a rule would protect consumers from fees that have become “common” in many sectors of the U.S. economy, pointing to service fees when purchasing event tickets or hotel rooms. Consumers across the country are paying “tens of billions of dollars each year” in these fees, the FTC said in its announcement.

“It’s beyond frustrating to end up spending more than you budgeted because of random, arbitrary fees,” said FTC Chair Lina M. Khan, in a statement. “No one has ever felt that a ‘convenience fee’ was convenient. Companies should compete to provide the best quality at the best price, not to see who can squeeze the most added expenses out of consumers. That’s especially true at a time when families are struggling with the effects of inflation.”

The types of junk fees that the FTC plans to look into are:

• Unnecessary charges for worthless, free, or fake products or services
• Unavoidable charges imposed on captive consumers
• Surprise charges that secretly push up the purchase price

With respect to charges imposed on captive consumers, which could describe consumers whose accounts are placed with a collection agency, “consumers may be forced to pay junk fees because they have no way to avoid or opt out of them,” according to the FTC.

The commission voted 4-to-1 to approve the release of the ANPR. Commissioner Christine Wilson was the lone dissenter, who listed a number of questions she tried — and failed — to get answered prior to being asked to vote on it.