FTC Lays Out New Rule That Could End Hidden Fees (theverge.com) 90
The US Federal Trade Commission is proposing a new rule that it hopes will put an end to hidden junk fees that some businesses often add as a surprise when consumers are checking out. From a report: The agency is currently seeking public comment on the rule, known as the Trade Regulation Rule on Unfair or Deceptive Fees, after having already collected 12,000 comments last year from individuals, businesses, law enforcement groups, and others on how deceptive fees affect them. 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." FTC adds that tackling junk fees through its nearly 100-year-old legal mandate that covers "unfair and deceptive acts or practices" is not enough. 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."
New Fee (Score:5, Funny)
Junk Fee Compliance Cost Recovery: $1.99
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Btw, reading this comment only costs $0.01 but there's a hidden "reading fee" of 69 dogecoins. Everyone pay up lol.
Re: New Fee (Score:5, Interesting)
that fee is *literally* to recoup lost income because winters are warmer and ppl are using less natgas. linky [washingtongas.com]
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Weather is Colder Than Normal When the weather during the winter months is colder than normal, the natural effect is an increase in customers' gas usage and higher customer bills. Because of the WNA, Washington Gas is able to distribute to its customers any excess revenue brought in by the unusually cold weather. Customers benefit from this by receiving WNA credits from the company. Weather is Warmer Than Normal When the weather during the winter months is warmer than normal, customers' gas usage and bills tend to be lower - this means a shortfall in the company's revenue. With WNA, Washington Gas is allowed to recover the revenue loss by placing a surcharge on the customer's bill in a form of a WNA charge. When the weather during the winter season is normal, the WNA will not be applied.
If the weather you get is sufficiently cold a credit will be issued in August instead.
In Ohio the Natural Gas and Electric suppliers can be different from the companies that maintain the delivery infrastructure. There is a line item on the bill for consumption * price per unit paid to the chosen supplier and is collected by the company maintaining the infrastructure and another line item for the infrastructure costs. A budget plan is available which divides your average annual usage by 12 and charges th
Re: New Fee (Score:2)
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Fun fact, natgas usage causes *warmer* winters
It will be self correcting then. Like a Weather Normalization Adjustment plan.
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You (kinda) jest. My natgas bill has a 'Weather Normalization Adjustment' fee.
Personally, I just want to see which fees were government mandates and which were invented by the vendors. And I'd really prefer all the vendor fees just get rolled into the price and the government taxes just get rolled into one big "Tax" line.
But that being said, I really don't have much sympathy. Yeah, the added fees are annoying but you still have the option of hitting "Cancel" when you see them. At this point I'm pretty well trained to double check the bottom line before I commit. Are there really that
Re: New Fee (Score:2)
Businesses are *supposed* to get as much market share as they can.. I. E. Monopolize. As they get bigger, they can price out any competition. And start to *dictate* prices ala Amazon.
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Markets only work fairly when everyone is operating under the same rules. That's what regulations are intended to do.
I'll grant that. I'm asserting the rule "you have to show the complete final price at checkout" (which is what we have today) is also a perfectly fine rule for everyone to follow.
Don't get me wrong: I really prefer seeing the final price up front. Getting a rude shock at the final checkout page sucks. But as I wrote, I think the market is already solving this without having to get regulators involved.
Businesses are *supposed* to get as much market share as they can.. I. E. Monopolize. As they get bigger, they can price out any competition. And start to *dictate* prices ala Amazon.
Well, couple of comments.
First, there's no "supposed" about it. Businesses can do whatever the owners want.
Re: New Fee (Score:2)
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There's nothing stopping companies advertising their prices with additional figures to show what percentage of the total is taxes and fees - but there should always be a total cost shown, and it should be the most prominent and visible figure.
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There's nothing stopping companies advertising their prices with additional figures to show what percentage of the total is taxes and fees - but there should always be a total cost shown, and it should be the most prominent and visible figure.
No argument from me. I just have an allergic reaction about mandating anything other than "you can't lie to your customers."
I don't think companies like annoying customers, not when the customer has a choice of sellers. Given that, I'm confident companies will do this of their own accord as we're already seeing. And that's why my municipal water bill is a confusing mess and my Amazon receipts are clear as day.
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Can you explain to an on-American what the point of these fees are? Why not just bump the base price up?
Is it so they can lie in ads? We banned airlines advertising 1 Euro flights, which ended up costing 100 Euro when all the fees and tax were added.
Re: New Fee (Score:2)
Oh and to be able offer a contract of 39/month + fees and not violate the contract when they raise the price.
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Thanks.
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Too bad we don't live in a country where people do things just because it's right.
"When I was a child, I spake as a child, I understood as a child, I thought as a child: but when I became a man, I learned that people were like unto asshats."
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Too bad we don't live in a country where people do things just because it's right.
That's the problem with sociopaths, they think "gimme it, it's mine" is a perfectly normal and acceptable behavior.
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Junk Convenience Fee, $39.99
This is good (Score:4, Insightful)
Almost unequivocally so which is rare when dealing with regulations, I can't see a downside for the consumer coming from this regulation. If a fee is mandatory then it's part of the price, full stop.
It's easy to get cynical but this is another case of where elections matter. If Lina Khan isn't heading the FTC do we see this as a priority? Maybe but I don't recall Joseph Simons making it any kind of priority.
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If a fee is mandatory then it's part of the price, full stop
The only question for me is if you treat Government mandated fees the same way. American consumers are conditioned to sales tax being separate from the advertised price (something that annoys my EU friends to no end when they come here) so that's not something likely to generate uproar.
Looking at my Verizon bill, six fees on each phone line, four of those coming from the Government. The other two are "because we can" fees. Verizon even discussed raising one of them on an earnings call to boost revenue.
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The only question for me is if you treat Government mandated fees the same way.
That is the case in the UK where VAT (AKA sales tax) must be included in the ticket price when an item is sold to consumers. When sold to a business VAT need not be shown as a business can often reclaim VAT (often such a ticket will show the price without & with VAT)
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This is due to the different taxing models used between Europe and US. Europe, every step in the supply chain that adds 'value' adds to the total taxes, up to some ultimate percentage - 17-20%. That way, if a good stops along the supply chain it's taxes are collected.
In the US, final sale doctrine is used. The final sale to the customer (end-user) is where taxes need to be collected. This can be confusing. For instance, bulk-selling flour to a bakery is done at non-taxed rate. Bakery makes goods that
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This is due to the different taxing models used between Europe and US. Europe, every step in the supply chain that adds 'value' adds to the total taxes, up to some ultimate percentage - 17-20%. That way, if a good stops along the supply chain it's taxes are collected.
No, you have it wrong, it is not added in steps. There is a VAT rate (20% in the UK for most goods and services). When a business sells something it adds 20% and pays that to the government as tax; but it can reclaim the 20% when it buys goods/services from a VAT registered business. It is, essentially, a tax on consumers.
Slight complication: VAT is only added and can be reclaimed by a VAT registered business, in the UK only necessary when annual turnover exceeds £85,000. Some types of business/goods
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Re: This is good (Score:2)
The reasoning isn't here or there, but this is why it is impossible to include "tax" in the price for any product. It would always be wrong.
No, it wouldn't, at least not for physical stores. The store knows what taxes are on all the goods it sells (it must), so all it needs so is update the tag with the total price with tax. Chain stores already do per-store pricing, so it wouldn't be onerous even for them. In fact this is already done for one type of good: gasoline. All gas stations (at least all I've ever seen or heard of) in the US display final prices after tax. And gas taxes are even more complex than normal sales tax. Displaying post-tax
gas stations are very good at showing the all in p (Score:2)
gas stations are very good at showing the all in price with all of the local taxes added in.
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The reasoning isn't here or there, but this is why it is impossible to include "tax" in the price for any product. It would always be wrong.
For tax inclusive systems automatically disaggregate item costs from any applicable taxes. Even where tax rates are different across your coverage area it could still be reasonable to advertise a single price and allow item cost to fluctuate with tax rates.
Personally as a customer would much rather everything be tax inclusive.
Taxes however are different than Fees. It isn't just a terminology thing either.
The FTC is not making this distinction in their terminology. To them taxes are charges or fees.
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Those aren't government mandated fees to you. Those are fees/taxes collected from the business by the government (sometimes, although sometimes it's just an outright lie that it's a government fee). These things are just part of the cost of doing business, but the companies putting these on their bills pass them on to the consumer as extra line items.
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Those aren't government mandated fees to you.
Sales tax and 911 fees absolutely are Government mandates on consumers. The carrier can choose to eat them (T-Mobile does) as a marketing approach but the intention in legislation is for consumers to pay those.
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Right. T-Mobile has never thought of just bumping up the price of the plan they sell you and roll the nonsense into one lump sum...they've never thought of that. No one has.
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Those aren't government mandated fees to you. Those are fees/taxes collected from the business by the government (sometimes, although sometimes it's just an outright lie that it's a government fee). These things are just part of the cost of doing business, but the companies putting these on their bills pass them on to the consumer as extra line items.
This is incorrect, these are pass-thru fees imposed on the customer the business merely collects and delivers to the government. This is different from taxes imposed on the business itself. The government imposed pass thru fees are required to be itemized on the bill. It is illegal not to do so.
Proposed text explicitly addresses this:
"This definition covers only fees or charges imposed by the government on consumers and does not encompass fees or charges that the government imposes on a business and that
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To be clear, there are pass through fees, then there are tons of other fees that companies present as if they were pass through fees. For example, the universal service fee. There is no government requirement that this fee be passed to the consumer as a line item fee, but telecoms do it anyway because it allows them to fraudulently claim a lower base price for service.
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For example, the universal service fee. There is no government requirement that this fee be passed to the consumer as a line item fee, but telecoms do it anyway because it allows them to fraudulently claim a lower base price for service.
Do you have any other examples? The fees were never actually stated and we don't know what is actually being referred to.
USF scheme is a percentage of the qualifying portion of the users phone bill. It is for all intents and purposes a tax on the end user. The argument that something structured in this way is imposed on the carriers not the end user and therefore not a pass-thru tax is a distinction without a difference. It is purely a semantic word game with no real world import or meaning.
The complexi
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USF scheme is a percentage of the qualifying portion of the users phone bill. It is for all intents and purposes a tax on the end user. The argument that something structured in this way is imposed on the carriers not the end user and therefore not a pass-thru tax is a distinction without a difference. It is purely a semantic word game with no real world import or meaning.
You specifically presented "government imposed pass thru fees [as] required to be itemized on the bill. It is illegal not to do so." The USF is a specific fee that is not required to appear on a customer's bill. Telecoms put it on the bill because they can. I'm not quite sure what other kind of example you want. There are basically three categories of fees: ones imposed by the government that are required to appear on the bill, ones imposed by the government that are not required to appear on the bill and o
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Yeah back when I was a libertarian i read the whole "FairTax" book and it had an entire chapter devoted to inclusive/exclusive rates and taxes and yeah I think sales tax should be calculated per item and rolled into the price, I dont really care if its more of a pain in the ass for the stores.
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The only question for me is if you treat Government mandated fees the same way. American consumers are conditioned to sales tax being separate from the advertised price (something that annoys my EU friends to no end when they come here) so that's not something likely to generate uproar.
From the text...
"Government Charges means all fees or charges imposed on consumers by a Federal,
State, or local government agency, unit, or department. This definition covers only fees or charges
imposed by the government on consumers and does not encompass fees or charges that the
government imposes on a business and that the business chooses to pass on to consumers."
"Total Price means the maximum total of all fees or charges a consumer must pay for a good
or service and any mandatory Ancillary Good or Servic
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Adding to my above, they also shouldn't be allowed, IMHO, to advertise a price that includes autopay or other discounts. They should have to advertise the base price. I personally don't even think they should be allowed to offer an autopay discount, but whatever, not going to die on that hill, but it's BS to advertise a lower price that's conditioned on the consumer doing certain things they may not want or be able to do.
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Autopay discount is actually pretty simple - with autopay they're more likely to get their money period, not to mention on time. So autopaying customers are actually "cheaper" in that there are fewer expenses and writeoffs associated with them. Thus the discount.
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I'm fine with that, posting the full price, perhaps with a disclaimer that you can save $X if you also do autopay, like how insurance companies advertise that you can get discounts.
It's just that I wanted to point out that there's a reason to offer discounts with autopay.
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That's all fine and dandy, except, on a multi-line plan that "discount" totals up to an insane amount of money that is above and beyond any cost savings due the carrier via auto-pay. There's also the fact that they all bill a month ahead anyway, so if you don't pay by the due date, you get shut off and have not actually received any services not already paid for.
Regardless, they should have to advertise the non-discount total, not all of us are able or willing to sign up for autopay. It's really rich how
Autopay is better than you might think... (Score:2)
That's all fine and dandy, except, on a multi-line plan that "discount" totals up to an insane amount of money that is above and beyond any cost savings due the carrier via auto-pay. There's also the fact that they all bill a month ahead anyway, so if you don't pay by the due date, you get shut off and have not actually received any services not already paid for.
How sure are you of that? Remember, it isn't just processing where the company is saving money, it's things like NOT having to regularly shut people's accounts and turn them back on, which takes human intervention(for now).
I'm fine with requiring the no discount price to be advertised.
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which takes human intervention(for now).
It doesn't require human intervention to shut off a telecommunications service.
These days, it doesn't technically require human intervention to shut off electricity either. My utility uses smart meters. One of their many features is remote disconnect. Now, a human probably is still required there, because electricity is a regulated service in most States with legal requirements before a disconnect can be implemented. It's not a truck roll though, it's "Review a checklist so we don't get sued and/or f
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It doesn't require human intervention to shut off a telecommunications service.
I was thinking more about turning it back on. While it can theoretically be automated, there's a high risk of needing human intervention, like taking the money in a physical store, recomputing the bill, having to explain to the customer why they need to pay, figuring out how a payment was declined or went missing, etc...
Though the prepaid services seem to do just fine. My nephews tend to have their phone plans expire before their mother bothers to buy them more time. So they're unreachable for a day or s
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Re:This is good (Score:5, Insightful)
If it is a mandatory fee then it is the cost of doing business and the cost of the good or service. Don't start breaking it out to "Only $5! And $20 manufacturing fee, $10 trucking fee, $5 stocking fee..."
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Don't forget the actual "employee healthcare fee" on food bills a while back...
I love the "only $5!" (in tiny print: Plus $29.99 in Shipping and Handling fees).
Re:This is good (Score:5, Insightful)
Don't forget the actual "employee healthcare fee" on food bills a while back...
That's still a thing that many restaurants do. There's one around here with a sign on the door, "We impose a 2% surcharge so we can provide our employees with quality health insurance. If you wish to opt out of this fee please let your server know."
That's some passive aggressive bullshit right there. Almost nobody is opposed to providing employees with health insurance. The small minority that is, are they really going to ask the person bringing them their food to remove the charge from the bill? Just fucking price your product appropriately so you can take care of your employees. It's not rocket science. Nobody is going to pass on your dining establishment because your hamburger is $0.25 more than the competition.
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Oh, I agree it's passive aggressive bullshit. I'd support removing minimum wage exceptions for "tipped employees". I oppose the tipping culture anyways, especially with how out of control it's gotten.
Of course, my response to such stuff is to stop patronizing such places. You take on a 2% surcharge and not just build it into the prices? Bye.
When they started sending texts asking me to tip my pest person, we stopped that service.
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This is why all the food I serve at my restaurant is free. Gratis. I just charge a rent fee, grocery fee, a delivery fee, preparation fee, employee wage fee, washing fee, a premium ingredients fee, healthcare fee, state taxes, sales taxes, health inspection fee, reservation fee, vacuuming fee, and a fee management fee.
Oh and the employee wage fee is ridiculously low for the good of our customer so don't forget to add 20% gratuity so our employees at least have enough money to get to and from work.
Putting an end to deceptive practices? No thanks. (Score:2, Funny)
The whole world runs on varying levels of deception. If you tried to inject honesty into the mix, everything will come apart at the seams. Imagine honesty suddenly being required in politics, advertising, and business - the chaos would be unmanageable. I know this seems like an isolated case, but it's Ye Olde Slipp'ry Slope. Can't take away people's opinion to lie by omission (or other means). That's unfair.
Imagine a world where I don't have to add items to a shopping cart, complete registration, confirm my
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Cool start with medical providers (Score:4, Insightful)
Great start with medical providers.
I think they show the MAX price! (Score:2)
I think they show the MAX price!
Should be part of college tuitions too (Score:3)
If a school charges mandatory fees they should be part of the tuition. Scholarships usually only cover tuition so you can be left with hundreds in mandatory fees.
Re:Should be part of college tuitions too (Score:5, Funny)
You spelled 'thousands' wrong. :-(
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I agree, but there is a method to their madness.
Of course there is. The method is to collect fees. The madness is that they are doing so at all.
Given resent rulings (Score:2)
Frontier (Score:2)
Frontier tried to charge me a $10 fee to cancel my service. I told them to go get fucked and refused to pay it.
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Tell them you'll deduct the $10 from the $15 fee you're charging them to process their $10 cancellation fee. So they only owe you $5!
Then charge Frontier a $10 "Annoyance Fee" for your time & energy dealing with their total BS fees.
Tax Included? (Score:1)
both ways (Score:2)
I think this is well intentioned but will fail. Perhaps a better approach might be to recognize that any transaction has two willing participants; what's good for one is good for the other.
Let's enshrine a buyer's right to add a small discount if it took more time and gas than usual to travel out pick up that coffee or an "inconvenience deduction" for having to wait more than 5 minutes in the drive through lane
Everyone seems to think they deserve a tip, perhaps they should be allowed to be positive and nega
So will this include my car license fees? (Score:2)
I wonder if the government will follow these rules. In Washington state there 5-7 "extras" they slip in there. But really it's only costs "$30" to register your car. Then the other $100+ fees gets tacked on.
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What this should directly address is online bill pay. 'Save a stamp pay on line' - yes you save the stamp but they neglect to mention the $3.00 card processing fee right up until you are asked to enter your payment info..
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Like $1 for mailing a sticker when a stamp costs at most 66 cents.
"Postage & Handling" all wrapped up in 1 fee.
Typical Government shortcut approach. /sarcasm
Just one easy payment of $19.95 ... (Score:1)
Do something about that, FTC.
Timely, huh? (Score:2)
Jesus Christ, it's 2023, and we're finally enacting laws that should have been passed in 1983.
the usual suspects (Score:2)
This is the point of a confusopoly (Score:3)
Verizon types don't want you to be able to do an apples to apples comparison. Especially on commodity services where it should be simple.
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rental hardware must be able to be owned by the cu (Score:2)
rental hardware must be able to be owned by the customer or / and it must be part of the base rate with an discount for owning it.
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I guess you mean wireless because my Verizon FIOS has a flat $20 voice service and a semi flat $50 internet + $12.99 modem rental service. Of course there are taxes on top but don't let the telcos confuse you by conflating local taxes with their own undisclosed tack-on fees (oh hi comcast).
Sounds like my cable bill. Here's the monthly charge (with nothing else listed) now pay it - and it's cheaper than the local Telco while being more reliable than the local fiber upstart in town.
Gymmick (Score:2)
Keep in mind some fees are compensatory fees to pay for regulations that you, in your infinite wisdom as a voter, mandated corporations follow. Why should that come out of their pocket?
Ultimately it's all an accounting gimmick, as it all comes out of the consumer's pocket either way.
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Even to the extent that's true (in cellular they all concede on earnings calls it's not, these fees are about revenue) so fucking what? I run a business, can I advertise a lower price and then tack a "Thirteenth Amendment Compliance Fee" on your invoice? If it wasn't for that stupid Government I wouldn't have to pay these losers who work for me. It's driving up my costs man! Can't you see how unfair that is?
Needs to apply to hotels (Score:2)
So many hotels tack on stupid extra mandatory fees (ask anyone who has ever stayed in any of the big Vegas Strip casinos about "resort fees..."). The price listed for the room should be the full price including any mandatory fees.
And if everyone is forced to do this at the same time then no-one can argue "if we do this and our competitors don't, it will hurt us"
Hadn't considered this, but ... apartment rentals. (Score:2)
Just listened to a report on NPR about this and they noted that it will also apply to fees for apartment rentals. Apparently many people find out about these *after* signing the lease (also noting that some don't think to ask) and those fees can add hundreds to the monthly rent. Some are optional or on a case-by-case basis (like filing a maintenance request) and others are mandatory. So it covers more than the things we all here typically think about, like ISPs, phone, cable, etc...
But the US has been doing it this way for decades! (Score:2)
How is that going to work in the country where you don't even pay the price on items at the store? In the developed world, for example, if you see a price of 1 euro on something, that is what you pay. In the USA however, if you see a price of 1 dollar on something, you will pay anything from $1 to perhaps $1.08.
That sounds pretty deceptive to me!
Finally (Score:1)