Washington DC - The administration of President Joe Biden has proposed a new rule to ban junk fees, or hidden or bogus charges that only show up once a payment is due.

The proposed rule aims to outlaw junk fees after the Federal Trade Commission (FTC) received more than 12,000 comments from American consumers complaining about the practice.

The measure would require companies to be clear up front about how much they are charging for a product or service, and what exactly the buyer will get for their money.

If companies are found in violation of the ban, the FTC could seek financial penalties and refunds for consumers.

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"All too often, Americans are plagued with unexpected and unnecessary fees they can’t escape. These junk fees now cost Americans tens of billions of dollars per year – money that corporations are extracting from working families just because they can," FTC Chair Lina M. Khan said in a statement.

"By hiding the total price, these junk fees make it harder for consumers to shop for the best product or service and punish businesses who are honest upfront. The FTC’s proposed rule to ban junk fees will save people money and time, and make our markets more fair and competitive."

On Saturday, California Governor Gavin Newsom signed a similar hidden fees ban into law. The legislation is set to take effect on July 1, 2024.