S. 3367: Junk Fee Prevention Act

The Junk Fee Prevention Act is designed to address and reduce the occurrence of excessive, hidden, and unnecessary fees imposed on consumers by various service providers. Here are the main components of the bill:

Consumer Protection from Hidden Fees

The bill requires service providers, referred to as "covered entities," to clearly display the total price of goods or services in all advertisements, including any mandatory fees that consumers may incur at the time of purchase.

• The total price must be presented when the price is first shown to a consumer.
• Mandatory fees must remain consistent from the time they are advertised until the purchase is completed.

Excessive Fees

Covered entities are prohibited from imposing or advertising mandatory fees that are deemed excessive or misleading during transactions.

Ticket Sales Transparency

For tickets to events such as concerts or sports, the bill mandates:

• Entities must disclose the total number of tickets available for sale at least 72 hours before the first sale or presale.
• They must inform consumers about refund policies before a sale is finalized and ensure full refunds are provided if events are cancelled or if tickets are not delivered on time.
• If a ticket is not in the seller's possession at the time of sale, this must be clearly communicated to the consumer along with a commitment to refund if the ticket cannot be provided.

Role of the Federal Trade Commission (FTC)

The FTC is empowered to create rules regarding the disclosure and imposition of mandatory or deceptive fees, which may not be explicitly mentioned in the various subsections of the act.

• The FTC will assess fees to determine if they are excessive based on their reasonableness and proportionality to the cost of the service.

Enforcement of the Act

Enforcement of this legislation will involve both federal and state-level actions:

• The FTC can act against violations, treating them as unfair or deceptive practices.
• State attorneys general may also initiate civil actions against entities violating these rules, with mechanisms for state-level enforcement detailed in the bill.

Telecommunications Regulations

The bill addresses issues related to telecommunications services by:

• Prohibiting excessive early termination fees by service providers.
• Mandating a proration of service charges upon early termination and transparency in billing practices.
• Ensuring that promotional material includes clear disclosures about service pricing.

Air Carrier Fee Reporting

Air carriers will be required to report revenue from ancillary fees (fees for services like baggage or seat selection) quarterly, detailing how fees are collected and their amounts. This information must be published publicly by the Department of Transportation.

Definitions and Applicability

The act defines a "covered entity" to include:

• Providers of short-term lodging (like hotels) or platforms allowing rental.
• Ticketing service providers.
• Any other entity defined in future FTC regulations.

It clearly describes what constitutes a "mandatory fee" and a "deceptive fee" and establishes guidelines for what service inclusions and charges must be transparent.

Relevant Companies

• AAL (American Airlines Group) - As an air carrier, American Airlines would have to comply with the new reporting requirements for ancillary fees and make their pricing practices more transparent.
• UAL (United Airlines Holdings) - United would also be affected similarly to American Airlines, needing to adhere to disclosure regulations on their fees.
• AMZN (Amazon.com) - As a major online retailer that could fall under the categories of "covered entities," Amazon may need to adjust its pricing practices to ensure full transparency regarding fees throughout the purchasing process.
• ABNB (Airbnb) - As a provider of short-term lodging, Airbnb will need to clearly display any fees related to bookings and comply with the disclosure requirements set forth in the act.