Skip to content


The U.S. Federal Trade Commission spent at least half of last year battling what it calls junk fees. These are nickel and dime charges that are “unnecessary, unavoidable, or … that inflate costs while not adding value.” Easy targets are ticketing or credit card convenience fees, hotel resort fees, or phone card connection fees. The FTC spent the first part of its multi-round battle dealing specifically with the auto industry’s junk fees; charges that include bait and switch prices, or charges for counterfeit goods and services, or for goods and services that cost the dealer nothing to provide. , and item costs to be included in the advertised purchase price (significance fees, anyone). The government agency received more than 10,000 comments on junk dealer fees before closing the box for proposals in September 2022 and moving into a rulemaking phase called the Auto Dealer Trade Regulation Rule. The goal is to create “guidelines that will provide consumers with basic protections against dealers who illegally charge junk fees without their consent or engage in bait-and-switch advertising.”

However, not long after completing that process, the FTC reopened the matter regarding unfair or deceptive fees charged by all kinds of businesses that make tens of billions a year for a few dollars at a time. Apparently, there is so much going on with the proposed rulemaking that “stakeholders” forced the FTC to extend the process. The agency announced that the comment period will last until February 8. Automotive news broke down the eight categories of unnecessary fees under discussion:

  1. In advertising or marketing, “clearly and conspicuously” misrepresenting or “not” disclosing “the total value of any good or service sold.”
  2. Misrepresenting or failing to disclose in advertising or marketing “the existence of any fees, interest, charges or other costs that cannot reasonably be avoided for any product or service.”
  3. Misrepresentation or failure to disclose if “fees, interest, charges, goods or services are optional or mandatory.”
  4. Misrepresenting or failing to disclose “any material limitation, restriction, or condition with respect to any product or service that may result in a mandatory charge … or that may reduce a consumer’s use of the product or service, including the amount received by the consumer.”
  5. Misrepresenting that a customer owes money for “any product or service that the consumer did not agree to purchase.”
  6. Charging for anything “without express and informed consent.”
  7. A charge for “fees, interest, products, services, or programs that have little or no added value to the consumer, or that consumers reasonably expect to be included in the total advertised price.”
  8. Misrepresenting or failing to disclose “the nature or purpose of any fees, interest, charges or other charges.”

If all goes well, the result will be to force companies to declare upfront “the inclusion of any mandatory fees when the price of a product or service is quoted to consumers.”

While the junk car toll rulemaking is now harmonized, this new regulation doesn’t stop comments about the auto industry as well as everything else. So, if you’d like to see the FTC get some teeth to address specific, questionable items on that new car invoice you were sent, or the hotel bill, or the hotel bill you received when you had to fly three states away to buy a car : , visit the comments site to voice your complaint.

However, if your main complaint is the notes, don’t worry. Their sometimes late disclosure is an artifact of contracts between manufacturers and franchised dealers. An OEM-dealer franchise agreement may mandate that a dealer not advertise any vehicle below or above MSRP in certain quantities. So even if a dealer knows they plan to charge $100,000 for a car with a $60,000 MSRP, the OEM agreement may say the dealer can advertise the car for a maximum of $62,000. Then the prospect calls, gets the bad news, and gets mad at the dealer for wasting everyone’s time. Technically, ADM would count as junk fee #2 in the list above. FTC can’t stop dealer from charging ADM; the solution would be to figure out how to get ADM front and center in a way that doesn’t conflict with the licensing agreement with the OEM.

But there are plenty of other decent junk fees to deal with before then. At the time of writing, there are over 5,200 comments in the registry. Go to regulations.gov to listen.

Related video:

Comments

Leave a Reply

Your email address will not be published. Required fields are marked *