FTC Extends Comments Period For Potential Junk Fees Ruling

The Federal Trade Commission (FTC) has extended a period of public comment on a potential ruling regarding the harms of junk fees and the unfair or deceptive tactics employed by companies to impose them. The new rules may have may have an impact on automotive dealerships and car shoppers.

The FTC announced the public comment period in October of the 2022 calendar year, declaring that it was seeking input on whether the government agency should explore a rule on the harms of junk fees. The notice announcing the initiative was published in the Federal Register on November 8^th.

According to the FTC, junk fees are “unnecessary, unavoidable, or surprise charges that inflate costs while adding little to no value for consumers.” This could apply to car dealerships and car shoppers in a number of different ways – for example, with regard to bait-and-switch claims, wherein dealers may make deceptive advertising claims to draw in prospective buyers, such as with low vehicle pricing claims or financing terms, before switching to higher pricing or different financing terms once the consumer is “in the door.” Other examples would include fraudulent add-on products or services that serve no benefit to consumers, or surprise fees.

Now, the FTC has extended the comment period on a potential junk fees ruling following a request made by “interested persons.” The Commission approved the comment period extension in a 4-to-0 vote, and thus the period will continue until February 8^th of the 2023 calendar year.

In an announcement made last summer, the FTC stated that it had brought more than 50 law enforcement actions related to automobiles in the last 10 years, while also helping to lead two nationwide law enforcement sweeps with 181 state-level enforcement actions. The FTC also states that complaints from consumers related to automobiles remain in the top 10 complaint types received by the agency, with over 100,000 complaints received from consumers annually over the course of the last three years.

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