On October 11, 2023, President Biden, Federal Trade Commission (FTC) Chair Lina Khan, and Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra announced the latest developments in the government’s efforts to tackle junk fees. Junk fees are hidden, surprise fees imposed on customers without clear disclosure. The CFPB and FTC have taken several measures to crack down on junk fees since early 2022, including:
- On January 26, 2022, the CFPB issued a request for information regarding fees that consumers believed to be covered by a baseline price, unexpected fees, and fees that seemed too high or unclear.
- On March 23, 2023, the FTC proposed a “click to cancel” provision requiring sellers to make it easier for consumers to cancel their recurring subscriptions and memberships.
- On June 22, 2022, the CFPB issued an advance notice of proposed rulemaking to address excessive credit-card late fees.  On February 1, 2023, the CPFB issued a proposed rule limiting and capping late fees.
- On June 29, 2022, the CFPB issued an advisory opinion affirming that “pay-to-pay” fees that are not authorized by the original loan violate the Fair Debt Collection Practices Act (FDCPA). “Pay-to-pay” fees are those that are imposed on consumers who want to make a payment in a particular way.
- On July 23, 2022, the FTC proposed a rule to ban junk fees and bait-and-switch tactics for car buyers.
- On October 20, 2022, the FTC published an advance notice of proposed rulemaking to crack down on junk fees, seeking comments on unnecessary charges, unavoidable charges, and surprise charges.
- On October 26, 2022, the CFPB issued guidance stating that imposing surprise bounced-check or overdraft fees are likely to be unfair and unlawful.
- On October 11, 2023, the CFPB published a Supervisory Highlights special edition covering junk fees in the areas of bank accounts, auto-loan servicing, and remittances that were identified during CFPB examinations between February and August 2023. The CFPB claims to have recovered and is refunding $140 million back to impacted customers.
Earlier this week, the CFPB released an advisory opinion on fees related to consumers requesting information on products and services, and the FTC proposed a new rule banning hidden fees and bogus fees.Continue Reading The FTC and CFPB Announce New Rules to Tackle Junk Fees