Consumer Man: ‘Junk fees’ transparency to take effect mid-year

In a significant move to protect people from hidden charges, the Federal Trade Commission (FTC) has finalized a new rule requiring transparent pricing for hotel rooms, vacation rentals and live event tickets. This rule, announced in mid-December, aims to eliminate so-called “junk fees” that often surprise consumers at checkout.

Consumer Man Herb Weisbaum, a contributing editor at Checkbook.org, joined “Seattle’s Morning News” on KIRO Newsradio Friday to discuss the implications of this new regulation.

“It’s difficult to comparison shop when the online prices displayed are not the true cost,” Weisbaum explained. “These mandatory fees, whether called service fees, convenience fees, or resort fees, drive up the total cost of the room or ticket.”

The FTC’s new rule, set to take effect mid-year, mandates consumers be shown the honest, all-in pricing upfront. This change is expected to make comparison shopping easier and save consumers billions of dollars and millions of hours spent searching for actual prices, Weisbaum explained.

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Weisbaum clarified the rule does not limit or stop junk fees but requires transparency.

“They can charge whatever they want; they just have to tell you about it,” he said.

Host Charlie Harger shared a personal anecdote about hidden fees while shopping for a car stereo.

“Their advertisement was $300 with free installation, but when they told me it was going to be $1,200, I just walked out the door,” Harger said, highlighting many consumers’ frustration.

Weisbaum noted the rule covers only live event ticketing and lodging, not other areas where hidden fees are prevalent.

“The original proposal was to cover more, but the FTC had to scale back to get it through,” he said.

Despite this, the rule has received positive reactions from some industry players, including Live Nation, which owns Ticketmaster. Following the backlash from the Taylor Swift ticketing fiasco in 2022, Ticketmaster adopted all-in pricing voluntarily.

The new rule has also prompted some big hotel chains to start listing both the per-night and all-in rates, including all fees, making it easier for consumers to compare prices accurately.

However, Weisbaum cautioned that the industry might not be entirely on board.

“There’s been a trend to file lawsuits just before new rules take effect,” he said.

The FTC received 60,000 comments on the proposed rule, reflecting public interest and concern.

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In addition to the junk fee rule, Weisbaum discussed a new rule from the Consumer Financial Protection Bureau (CFPB) regarding medical debt. Set to take effect mid-year, this rule will remove unpaid medical bills from credit reports, potentially improving credit access for millions of Americans.

“It’s not a predictor of how good a credit risk you are,” Weissbaum explained, noting that medical debt often arises unexpectedly.

The incoming administration’s stance on these rules remains uncertain.

“They could try to change the rules or choose not to enforce them,” Weissbaum said, underscoring the ongoing battle to protect consumer rights.

For more detailed information, Weissbaum’s insights can be found on Checkbook.org.

Bill Kaczaraba is a content editor at MyNorthwest. You can read his stories here. Follow Bill on X and email him here.