Junk fees make securing and maintaining rental housing even more difficult for rent-burdened households—households who are disproportionately people of color and continue to face the financial fallout from the COVID-19 pandemic. To help ensure that renters can find safe, decent, and affordable housing, we urge the FTC to adopt a final rule that applies to rental housing and protects renters and rental housing applicants from hidden, misleading, and excessive fees.
We support the FTC’s overall approach to regulating junk fees and also provide recommendations on how to strengthen the rule. Most critically, we urge the FTC to:
- Promulgate a final rule that applies to rental housing junk fees.
- Prohibit hidden, misleading, and excessive fees.
- Clarify that Businesses may not impose fees—whether mandatory or optional—that provide little or no value to the consumer in exchange for the charge.
- Clarify that vague descriptions of fees that a reasonable consumer would not understand violate the rule.
- State that “Ancillary Good or Service” includes fees that are part of the same transaction but that a third-party charges.
- Define fees as “mandatory” if they are not reasonably avoidable or if a reasonable consumer would expect that the good or service is included with the purchase or part of the transaction.
- Require itemization of all mandatory fees and, if applicable, require Businesses to state which fees are one-time fees and which are ongoing monthly fees.
- Require that any fees that may not be encompassed by the Total Price and therefore not disclosed under Section 464.2(a) be disclosed under Section 464.3(b) and itemized.
- State that where additional costs that are excluded from the Total Price are variable, the Business must disclose the existence of such costs and any formula or method for their calculation.
- Explicitly prohibit misrepresentations regarding any amount included in the Total Price as well as any other fee or charge the consumer may pay.
- State that “before the consumer consents to pay” means before the consumer agrees to “make any payment” that is part of the transaction, including rental housing application fees.
- Issue the final rule as quickly as possible and also commit to issuing Advisory Opinions and Staff Interpretations to address any need for subsequent clarification.
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