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2023 0317 – FTC – Consultation – Trade Regulation Rule on Unfair or Deceptive Fees – FTC-2023-0064

• 2023 0317 – FTC- Consultation – Trade Regulation Rule on Unfair or Deceptive Fees – FTC-2023-0064  —  [BonkNote]
  • ftc.gov/legal-library/browse/rules/rulemaking-unfair-or-deceptive-fees
  • Regulations.gov – [link]
    • Comments – 3.3k – [link]
  • Federal Register – [link]
  • SUMMARY: The Federal Trade Commission (“FTC” or “Commission”) recently published a notice of proposed rulemaking (“NPRM”) in the Federal Register , titled “Rule on Unfair or Deceptive Fees,” which would prohibit unfair or deceptive practices relating to fees for goods or services, specifically, misrepresenting the total costs of goods and services by omitting mandatory fees from advertised prices and misrepresenting the nature and purpose of fees. The NPRM announced the opportunity for interested parties to present their positions orally at an informal hearing. Seventeen commenters requested to participate at the informal hearing. The Commission’s Chief Presiding Officer, the Chair, has appointed an Administrative Law Judge for the Federal Trade Commission, the Honorable Jay L. Himes to serve as the presiding officer of the informal hearing.
  • DATES
    • COMMENTS must be received on or before:  January 8, 2024.
    • HEARING DATE: The informal hearing will be conducted virtually on April 24, 2024, at 10 a.m. Eastern.

• [Comments – 3.3k – [link]
• AFSA – American Financial Services Association –
  • AFSA Comment on FTC Unfair and Deceptive Fees NPRM FINAL – combined (1)_Redacted
    • AFSA agrees with the FTC that hidden and misleading fees harm consumers. Our members want their customers to understand the costs of products and services and to be able to compare costs with those charged by other providers.
  • However, the proposed rule is flawed. To begin with, the underlying construct supporting this proposed rulemaking seems to be the belief that all transactions have a finite all-in cost that can be readily disclosed. That’s simply not true. Some products, like mortgage loans, are complicated and there isn’t one number that conveys the cost and can be disclosed upfront in an advertisement. In other instances, the consumer’s needs may change or not be known when the contract is entered into.
• ALTA – American Land Title Association –
  • ALTA_FTC Unfair and Deceptive Fees_Comment Letter_2_7_24_Redacted
  • While the American Land Title Association¹ (ALTA) supports thoughtful and targeted efforts to protect consumers from deceptive practices and pricing² we believe this proposed rule is outside the scope of the Federal Trade Commission’s authority and will only serve to increase consumer confusion and create regulatory conflict.
  • This letter outlines four key areas of specific concern.
    • First, ALTA believes that the McCarran Ferguson Act makes it clear that the FTC does not have the authority to apply this proposal to regulated insurance products and services, including title insurance and real estate settlement services.
      • Thus, the FTC must, should it move forward with its proposal, explicitly exempt from the definition of businesses under its proposal the business of insurance, including products and services provided by the title insurance and settlement services industry.
    • For example, in the title and settlement services industry there are a number of fees that can change based on the consumer decision to purchase certain additional or optional coverages or services. As a result, any final rule must make explicit that a practice is not unfair or deceptive if the ultimate price the consumer pays is due to the choices made by the consumer in the course of the transaction.
    • Lastly, in agreement with points made by the United States Chamber of Commerce, ALTA believes an attempt to regulate “excessive” fees is beyond the FTC’s jurisdiction.
  • The FTC Must Explicitly State that the Business of Insurance is Not Subject to the Rule
  • Any Final Rule Must Make Explicit that a Practice is Not Unfair or Deceptive if the Ultimate Price the Consumer Pays is Due to the Choices Made by the Consumer in the Course of the Transaction
    • These unknown variables make it impossible to accurately disclose a total price to the consumer at the beginning of a transaction.
      • The proposed rule’s attempt to regulate “surprise” price changes conflicts with the right of the consumer to make choices about their needs.
  • In all states the cost of title insurance is set by the type of policy and the amount of insurance, and there can be no variance from the filed, promulgated, or ra􀆟ng bureau rates and fees.