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FTC and States Crack Down on Hidden Charges and Junk Fees

A growing wave of regulatory efforts is targeting hidden charges and junk fees in response to concerns over deceptive pricing practices. As part of President Biden’s consumer protection platform, the Federal Trade Commission (FTC) proposed a new rule in October 2023 that would require sellers to clearly disclose the total price of products and services in their offers and advertising. This total price must include all mandatory fees and charges, excluding only shipping and government fees. The rule also aims to address how nonmandatory fees are presented to consumers.

States are joining the push for fee transparency. California, for instance, has amended its Consumer Legal Remedies Act (CLRA) to ban hidden fees, with the new law taking effect on July 1, 2024. Similarly, Massachusetts Attorney General Andrea Joy Campbell has proposed new rules prohibiting “junk fees,” requiring that sellers disclose the total price upfront, before checkout. In New York, a law signed in December 2023 mandates that sellers who impose credit card surcharges must clearly post the total price, including the surcharge, ensuring compliance with advertorial guidelines.

Several other states—such as Arizona, New Jersey, North Carolina, Rhode Island, Texas, and Virginia—are considering similar legislation to curb deceptive fee practices.

As these regulations evolve, brands must ensure their price disclosures comply with both federal and state laws, and closely monitor emerging standards around junk fees. Clear and upfront pricing will be key to avoiding legal challenges and maintaining consumer trust in the shifting regulatory landscape.


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