The Federal Trade Commission put up a proposal on Wednesday to outlaw any fictitious junk fees that may be used to inflate the price of concert tickets, hotel stays, or utility bills.
The elimination of these fees is a priority for President Joe Biden’s administration. A drive for legislation and a flurry of activities targeted at assisting customers are the results of the Democrat’s efforts. According to administration authorities, these additional expenses may cause price inflation and time waste.
On a conference call with reporters, FTC Chair Lina Kahn stated, “The proposed rule would prohibit corporations from running up the bills with hidden and bogus fees, requiring honest pricing and encouraging firms to compete on honesty rather than deception.” Infringers will face civil penalties and be forced to reimburse the Americans they deceived.
The Consumer Financial Protection Bureau has also said that it will prevent large banks from charging unnecessary fees for essential consumer services in conjunction with the FTC proposal.
On Wednesday in the White House Rose Garden, Biden intends to discuss both initiatives.
Research shows that hidden fees can force customers to pay up to 20% more than they would have had they known the complete cost upfront and comparison-shopped, according to Lael Brainard, director of the White House National Economic Council.
According to the FTC, consumers squander 50 million hours annually looking up the combined cost of travel and housing. The measure would save those two categories a total of approximately $1 billion in time per year.
However, several corporate organizations have doubts about whether or not consumers will save money. The U.S. Chamber of Commerce said that the “Washington knows best approach” would limit consumer options and reduce the competitiveness of the economy after Biden discussed junk fees during a meeting with aides in February.
