The US Federal Trade Commission has spent at least the last half of the last year grappling with what it calls junk fees. These are nickel and tarnish charges that are “unnecessary, unavoidable or … that increase costs while adding little or no value.” Easy targets are convenience fees when buying tickets or using credit cards, hotel resort fees, or connection fees on phone cards. The FTC spent the first part of the multi-round fight specifically addressing Garbage fees in the auto industry — fees including solicitation and conversion pricing, fees for counterfeit products and services, or products and services that are seller have nothing to offer, and the cost of the items should be included advertisement purchase price (destination fee, anyone?). The government agency received more than 10,000 comments about authorized dealer junk fee before the comment box closes in September 2022 and moves into the rule-building phase known as Motor vehicle dealers Commercial regulation rules. The aim is to create “principles that provide consumers with primary protections against agents that illegally collect junk fees without their consent or engage in decoy advertising.” and transform.”
However, not long after that process ended, FTC has solved the problem Again related to unfair or deceptive charges are collected by all types of businesses that are making tens of billions a year for a few dollars at a time. There appeared to be so many problems involved in the development of the proposed rule that “interested parties” forced the FTC to lengthen the process. The agency has announced that the comment period will last until February 8. auto news broken The eight types of garbage fees under consideration are:
- Misrepresent or fail to disclose “clearly and conspicuously” the “total cost of any goods or services for sale” in advertising or marketing.
- Misrepresent or fail to disclose “the existence of any fees, interest, charges or other costs that are not reasonably avoidable in respect of any goods or services” in advertising or marketing .
- Misrepresent or fail to disclose if “fees, interest, fees, products or services are optional or required.”
- Misrepresenting or failing to disclose “any material restrictions, limitations, or conditions relating to any goods or services that may result in an obligatory fee… or may impair use consumer goods or services, including the amount received by the consumer.”
- Misrepresentation that the customer owes “any product or service that the consumer did not agree to purchase”.
- Charge for anything “without explicit and informed consent.”
- Charge for “fees, interest, goods, services, or programs that have little or no added value to the consumer or that the consumer would reasonably assume to be included in the overall advertised price body.”
- Misrepresentation or failure to disclose “the nature or purpose of any fees, interest, charges or other expenses.”
If all goes well, the outcome would force companies to give advance notice of “including any mandatory fees whenever a consumer is quoted a price for a good or service.”
While the development of an auto-specific junk fee rule has now been put in place, the new rule doesn’t prohibit comments about the auto industry along with everything else. So if you want to see the FTC have the guts to deal with specific line items, there’s a problem in new car the bill you were sent, or with the hotel bill you received when you had to fly three states to buy car, visit the comment page to broadcast your complaint.
However, if your main concern is markup, don’t bother. Their sometimes delayed disclosure is an artifact of the contract between the manufacturer and the franchisee. An OEM reseller franchise agreement may be required that the dealer will not advertise any vehicle with a certain amount lower or higher than the MSRP. So even if a dealer knows they plan to charge $100,000 for a vehicle with an MSRP of $60,000, the OEM agreement may stipulate that the dealer can only advertise that vehicle. with a maximum price of $62,000. The prospect then calls, gets bad news, and gets angry at the agent for wasting everyone’s time. Technically, ADM would be counted as the #2 junk fee in the above list. The FTC cannot prevent an agent from charging ADM; the solution would be to find a way to bring ADM front and center in a way that is not inconsistent with the franchise agreement with the OEM.
But there are plenty of other pertinent junk fees to deal with in the meantime. At the time of writing, there are over 5,200 comments in the log. Go to Regulations.gov to be heard.
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