In a move seeking transparency and honesty in consumer trade, on October 11, 2023, the Federal Trade Commission (FTC) introduced its Notice of Proposed Rulemaking for a new rule on unfair and deceptive fees, more commonly known as the “junk fee” rule.
As reported by Arnall Golden Gregory LLP , this proposed rule, to be ensconced at 16 C.F.R. Part 464 if passed, aims to curb what the FTC deems an “unfair practice” whereby consumers are advertised an amount they may pay without a clear and conspicuous disclosure of the total price.
The objective behind the rule is twofold: First, it necessitates the ‘Total Price’ to be revealed to consumers in a clear and conspicuous manner. Second, it calls for the ‘Total Price’ to be given greater prominence in advertisements, thus promoting transparency in the cost a consumer is expected to bear.
With the increasingly complex landscape of consumer fees, the FTC’s proposed rule promises fairness and transparency. The implications of this proposal could be far reaching, particularly in the era of digital transactions where hidden charges, typically labelled as conveniences, have become a norm.
For legal professionals in big corporations and law firms, this presents a challenge to review their existing policies around consumer fees, advertising, and general consumer communication. It’s no longer going to be acceptable to hide behind obscure terminologies or small print. The FTC’s proposed rule emphasizes clarity and honesty as trust-building measures with consumers.
In following the developments of this proposed rule, it is important for legal professionals to be involved in discussions on the interpretation and application of clauses, especially concerning what is to be viewed as ‘Clear and Conspicuous’ and ‘Total Price’. These judgments will likely shape future advertising and pricing structures of companies.