The White House has proposed cracking down on junk fees. Here’s how to avoid them


NEW YORK (AP) — “Junk fees” are just what they sound like: hidden or misleading charges that increase the total cost of concert tickets, hotel rooms, utility bills and other goods and services.

The Biden administration has proposed a new Federal Trade Commission rule that would require more transparency from companies when it comes to these fees, as well as regulation from the Consumer Finance Protection Bureau and the Department of Labor. You can also avoid the fees by staying vigilant, challenging late-breaking add-ons, and comparison shopping.

Here’s what to know:


Often junk fees don’t appear until the final pages of a checkout process, such as when buying concert tickets, airline tickets, hotel stays, or other products with “processing charges.”

These fees may also appear late in the payment process when it comes to housing, such as when acquiring a rental, as well as when purchasing services for incarcerated people (such as phone calls, emails, or money transfers). Ariel Nelson, staff attorney at the National Consumer Law Center, says that increased transparency will allow consumers to avoid sellers who inflate prices, though not always in the context of incarceration. The rule will also reduce wasted time consumers spend trying to find the real price of a good or service.

“The law will require disclosure up front of fees and prohibit misrepresenting the total cost, as well as the nature and purpose of the fee,” Nelson said. “If you think there are charges that don’t make sense or you’re paying for something not included in the original price, you should tell the FTC and the states’ attorneys general.”

To report an opaque fee or bad business practice, you can go to You can find your state attorney general at

The rule would also require that companies disclose whether fees are refundable. It would apply to industries across the economy, including hotels and lodging, energy and internet, car and apartment rentals, and music and entertainment tickets. With the new regulation, companies that fail to comply could face fines or penalties and be required to provide refunds.


The proposed junk fee crackdown is one of a series of Biden administration initiatives meant to help consumers, though Republican lawmakers and some business group say these efforts could lead to greater regulatory costs and leave the economy worse off.

“The proposed rule would prohibit corporations from running up the bills … requiring honest pricing and spurring firms to compete on honesty rather than deception,” FTC Chair Lina Kahn said on a call with reporters. “Violators will be subject to civil penalties and be required to pay back Americans that they tricked.”

The Consumer Financial Protection Bureau has said it will also block large banks from charging junk fees to provide basic customer services.

What’s more, a new proposed rule from the Department of Labor will require that financial advisers provide retirement advice in the best interest of the saver, closing a loophole in regulation generally governed by the Securities and Exchange Commission. (The SEC’s authority and rule does not typically cover commodities or insurance products like fixed index annuities, which are often recommended to retirement savers.) That should reduce junk fees for financial advice for people saving for retirement.


If the FTC rule is passed as proposed, the law will help consumers know what they’re paying for more quickly, creating better circumstances for fair competition, Nelson said.

To avoid bogus charges as things stand, here are some steps you can take, according to the consumer watchdog Public Interest Resource Group:

— Question any cost that isn’t made clear at the outset. This could be a “company charge” added to a phone or utility bill or a “service fee” buried in terms and conditions. Sometimes optional charges are given official-seeming names to discourage consumers from asking questions.

— If you still don’t understand what a fee is for, request a clear explanation in writing.

— Comparison shop if you’re uncertain whether a fee is necessary. Another merchant may have a more reasonable price without the mysterious added charges.

— Pay by credit card. Questionable and undisclosed fees are easier to dispute when paying with credit.

— Keep copies of receipts, emails, texts, and other communications. If you experience a surprise fee, you can more easily complain to the company, state attorney general, or FTC.


Lael Brainard, director of the White House National Economic Council, said research indicates that hidden fees can cause consumers to pay as much as 20% more than they would have had they known the total cost up-front and comparison shopped.

The FTC estimates that consumers waste 50 million hours each year searching for the total price for tickets and lodging. The time saved in those two categories because of the rule would be equivalent to about $1 billion annually, the agency estimates.


The Associated Press receives support from Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism.

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