FTC proposes new rule to increase transparency around junk fees
The Federal Trade Commission announced Wednesday that it’s proposing a new rule to ban hidden junk fees — those fees that often pop up and surprise you after you’ve already bought something and can add a whole lot to the cost.
Fees get tacked on to concert tickets, airline tickets, resort stays, apartment rentals and more. But that last one is a big one. A lot of renters, especially in bigger buildings, are getting hit with all sorts of fees on top of their monthly rent and utilities. And they don’t always know about them before they sign the lease. This is what the proposed new FTC rule is trying to prevent.
Last week, in a story about young people looking for housing in this expensive, competitive rental market, we met Anna Mayou. She’s 22, just graduated from college and lives in Duluth, Minnesota. She kept coming across apartments that looked like they were in her budget at first, but actually weren’t.
“There’s a really big rental company in Duluth that I would say owns the majority of rental properties,” Mayou said. “And the amount of fees that they tack on every month for completely arbitrary things is absurd.”
The rent itself was already high — at the top of her budget. And then, she said, the rental company tried to saddle her with hundreds of dollars of extra fees per month.
Mayou said there were fees for putting in maintenance requests online, fees for calculating each apartment’s share of the utilities, all sorts of other things. She decided to pass on those buildings.
But often, said Ariel Nelson at the National Consumer Law Center, tenants don’t find out about all the fees before they sign a lease.
“And a lot of times they’re mandatory,” she said. “A lot of times they are for services that people don’t want.”
Such as a valet trash fee, which would cover someone picking up your trash from right outside your apartment and walking it down the hall to the trash room.
And Nelson said in buildings that have fees, there are often a bunch.
“You realize once you’re on the other side of your lease agreement that actually the rent is something like $300 more than you thought,” she said.
The proposed FTC rule wouldn’t ban landlords and management companies from charging fees, but it would require they tell tenants about them up front.
Marie Claire Tran-Leung, at the nonprofit National Housing Law Project, said that will help tenants. But it won’t solve the issue completely.
“Sometimes even when those fees are disclosed, the tenants don’t really have the power to fight back against those fees,” she said, or have many other options.