(Bloomberg) — President Joe Biden announced a new rule that would require businesses to show consumers the full price of goods and services upfront, calling it "the most comprehensive action" his administration has taken yet on hidden or confusing charges.
"These junk fees can add up to hundreds of dollars weighing down family budgets, making it harder to pay family bills," Biden said Wednesday at the White House. "These junk fees may not matter to the wealthy, but they sure do matter to working folks in homes like the one I grew up in."
The proposed Federal Trade Commission rule would bar businesses from charging hidden or misleading fees and require them to disclose whether any fees are refundable. The proposal would apply to a wide range of industries subject to FTC oversight, including event ticketing, hotels and apartments or car rentals. Biden said the Consumer Financial Protection Bureau would also propose a new rule to make it easier for consumers to switch banks, which he said would increase competition and lower fees.
The president said research shows that consumers can end up paying as much as 20% more because of hidden junk fees than they would have paid if they could see the full price upfront. And he stressed that the proposed FTC rule would have teeth, allowing the agency to punish businesses that do not comply.
"FTC would have the power to impose financial penalties on companies that don't disclose their full upfront price and secure refunds for customers who have been defrauded by companies charging hidden fees," Biden said.
The president has stepped up his efforts regarding consumer fees and touted the cost savings as he seeks to highlight his economic agenda before next year's presidential election. Biden has struggled to sell voters worried about high inflation and fearful of a softening jobs market on his handling of the economy despite recent positive economic data. Separately, the CFPB will issue an advisory opinion that clarifies that consumers are entitled to get basic information from large banks and credit unions about their own accounts, such as balances or the remaining payoff amounts on loans, without having to pay fees.
Biden was joined at the event by FTC Chair Lina Khan and CFPB Director Rohit Chopra.
"These announcements are some of the most comprehensive actions on junk fees the administration has taken to date and have the potential to really change how consumers experience the purchasing process from live-event tickets to hotel stays to apartment rentals," Lael Brainard, Biden's top economic adviser, told reporters on Tuesday.
The administration's campaign against hidden fees has seen some successes. Biden in June
