In this analysis piece for Law360, Darrow's Etia Rottman Frand examines the accelerating enforcement environment around junk fees — the hidden, mandatory charges that the Consumer Financial Protection Bureau estimates account for tens of billions of dollars in annual revenue for e-commerce businesses.
The piece surveys the dual-track enforcement landscape that has emerged around junk fee practices, with federal regulators and state attorneys general both pursuing action simultaneously. The FTC's Rule on Unfair or Deceptive Fees, which took effect in May 2025, requires businesses in the live-event ticketing and short-term lodging sectors to disclose all mandatory fees upfront rather than revealing them at checkout. The rule carries penalties of up to $53,088 per violation and has already begun shaping private consumer litigation, with plaintiffs invoking it as persuasive authority to support state-law claims in sectors beyond the rule's direct scope.
State-level enforcement has been equally aggressive. Attorneys general across multiple states have pursued their own junk fee actions under unfair and deceptive practices statutes, with Massachusetts issuing an expansive junk fees rule effective September 2025 that extends well beyond the FTC's scope to cover subscriptions, recurring charges, and trial offers. The convergence of federal rulemaking and state enforcement is creating compounding exposure for businesses that have not updated their pricing disclosure practices.
