The Biden Administration has launched an initiative directed at combatting so-called “junk fees,” with the CFPB and FTC leading the Administration’s efforts.  In Part II of this two-part episode, we first look at CFPB supervisory activity relating to auto servicing, mortgage servicing, payday and small dollar loans, and student loan servicing. … Continue Reading

The Biden Administration has launched an initiative directed at combatting so-called “junk fees,” with the CFPB and FTC leading the Administration’s efforts.  In Part I of this two-part episode, we first discuss the various definitions offered by the White House, CFPB, and FTC for what constitutes a “junk fee” and the types of fees they have labeled “junk fees.” … Continue Reading

During his remarks in a meeting with private sector companies on June 15, 2023, President Biden described junk fees as “these hidden charges that companies sneak into your bill to make you pay more and without you really knowing it initially.”  President Biden was joined by representatives from Live Nation, SeatGeek, xBk, Airbnb, the Pablo Center at the Confluence, TickPick, DICE, and the Newport Festivals Foundation — companies that currently provide or have committed to providing all-in pricing in response to the President’s call to action on “junk fees” in his State of the Union.… Continue Reading

On April 17, the Consumer Bankers Association (CBA) issued a news release responding to the CFPB’s proposal to lower the credit card late fee safe harbor amount to $8.  The CFPB claims that, even though Congress banned excessive credit card late fees, credit card companies have exploited a regulatory loophole “to escape scrutiny for charging an otherwise illegal junk fee.” … Continue Reading

I am very tired of the Biden Administration’s, most notably the CFPB’s, inflammatory rhetoric about “junk fees.”  In its recent “Junk Fees Special Edition” of Supervisory Highlights, the CFPB defined “junk fees” as “unnecessary charges that inflate costs while adding little to no value to the consumer” and stated that “[t]hese unavoidable or surprise charges are often hidden or disclosed only at a later stage in the consumer’s purchasing process or sometimes not at all.”… Continue Reading

On November 3, 2022, the Federal Trade Commission (“FTC”) announced that it has entered into a consent order with internet phone service provider Vonage to settle allegations that it imposed “junk fees” on consumers and used “dark patterns” that prevented them from cancelling their service. Under the terms of the settlement, Vonage has agreed to pay $100 million in customer refunds, simplify its cancellation process, and enhance its disclosures.… Continue Reading

On October 20, 2022, the Federal Trade Commission (“FTC”) announced that it is issuing an Advance Notice of Proposed Rulemaking (“ANPR” or “Notice”) to address “junk fees,” a term used in the Notice to refer to “unfair or deceptive fees that are charged for goods and services that have little or no added value to the consumer.”… Continue Reading

Last week, the CFPB filed a lawsuit against ACTIVE Network LLC (“Active”), an online event registration company, in a Texas federal district court alleging that the company is deceiving customers into joining its fee-based membership club, “Active Advantage.”  Event organizers seeking to host community activities such as youth camps and charity race events contract with Active to provide online registration and payment processing services. … Continue Reading

The CFPB’s recently-issued request for information takes aim at what the CFPB labels “junk fees” charged by consumer financial services providers.  We discuss the types of fees targeted in the RFI, particularly fees related to deposit accounts and mortgages, and the impact of existing regulatory requirements on the CFPB’s initiative.  We also examine the CFPB’s authority to address so-called “junk fees,” consider possible short- and long-term actions the CFPB could take in response to the RFI, offer steps providers can take to prepare for greater scrutiny of ancillary fees and possible legal challenges, and describe the CFPB readiness reviews that Ballard Spahr attorneys are conducting to assist providers in assessing the permissibility and disclosure of fees charged in connection with their consumer products and services.… Continue Reading

The CFPB has published a “Request for Information Regarding Fees Imposed by Providers of Consumer Financial Products or Services.”  Comments on the RFI must be submitted by March 31, 2022.

On February 17, 2022, from 2:30 p.m. to 3:30 p.m. ET, Ballard Spahr will hold a webinar, “The CFPB’s Inquiry into “Junk Fees”: What It Means for Consumer Financial Services Providers.” … Continue Reading