WASHINGTON, DC -- Calling it a major step forward for consumer protection, U.S. Senator Jack Reed is backing the Biden Administration’s efforts to ban hidden ‘junk fees’ across multiple industries. 

Junk fees are hidden charges and misleading fees that companies add to customer bills, costing consumers tens of billions of dollars annually and stifling business competition.

Senator Reed today applauded the independent Federal Trade Commission (FTC) and the independent Consumer Financial Protection Bureau (CFPB) for announcing new actions and proposed rules against companies charging consumers junk fees. 

The FTC’s proposed rule would end hidden fees and make it clearer when businesses are adding extra charges, like at hotels, car rentals, apartment companies, live-ticket events, and more.  It would also prohibit businesses from advertising prices that leave out mandatory fees, giving consumers a more accurate upfront cost.  If this proposed rule is finalized as proposed, the FTC could bring enforcement actions to impose financial penalties on companies that don’t disclose their full upfront price and secure refunds for customers who have been defrauded by companies charging hidden fees.

The CFPB is issuing guidance to enforce junk fee rules from financial institutions.  The CFPB proposal would help prevent large banks from unfairly charging fees for basic services, like balance requests or other information.  The consumer watchdog also announced $2 billion in savings and $140 million in consumer refunds from previous crackdowns on junk fees.

Reed says he favors the moves by the FTC and CFPB and supports federal efforts to crack down on excessive hidden fees while promoting greater transparency, fairness, and competition in the market for all kinds of consumer goods and services.

“Junk fees are an annoying, unfair business practice designed to confuse consumers.  Unfortunately, they’ve become business as usual for too many companies these days and the practice needs to stop.  The new actions by the FTC and CFPB will help crack down on deceptive junk fees and ensure fair competition in the marketplace.  It will ensure businesses compete on price, not on who can hide their prices and tack on the most junk fees at the end.  This is a major step forward for consumers that targets bogus junk fees and will save working families real money.  It will help put tens of billions of dollars back into the wallets of consumers,” said Senator Reed.