A couple hours after I made my post about an article addressing the problem with “drip fees” in the UK and the psychology that reinforces their use, I saw that the FTC is proposing new rules to address junk fees, which are the same as drip fees in the UK.
FTC Chair Lina Khan said in a statement that “by hiding the total price, these junk fees make it harder for consumers to shop for the best product or service and punish businesses who are honest upfront.
A new rule with more precise language can do a better job with specifics, the agency argues:
It is an unfair and deceptive practice and a violation of this part for any Business to offer, display, or advertise an amount a consumer may pay without Clearly and Conspicuously disclosing the Total Price.
….and now this new proposed FTC rule could force other businesses in different industries, from airlines to hotels, to follow suit
If successful, the new rule could put an end to bait-and-switch tactics, which consumers have told the FTC that they’re constantly experiencing. Consumers have also said they often don’t know what certain fees are for.
Other articles about the proposed rule include examples of some of the arcane abbreviations associated with added fees that people couldn’t decipher. It was noted that the rule wouldn’t get rid of all the added fees resulting in cheaper prices, but it would force businesses like concert venues, hotels, and airlines to disclose full prices upfront.
As I mentioned in my post last week, the rule will need to be written well to eliminate loopholes which will allow for the addition of fees not covered by the rule. It should also be noted that hospitals have been required to provide transparent pricing for common procedures since 2021, but a recent study revealed only about 1/3 of hospitals are in compliance. So there needs to be real enforcement of the rules as well.