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Subjective Aspects of FTC’s ‘Junk Fee’ Rule Likely to Cause Legal Departments Fits

Read Time: 1 min

Member James Sandy was quoted in Law.com’s Corporate Counsel in a piece detailing the complications that may arise following the Federal Trade Commission’s new proposed ban on junk fees.

Indeed, “perhaps one of the strongest defenses to an attack on alleged ‘junk fees’ is to make clear the fees were disclosed clearly and conspicuously to the consumer at the outset of the relationship,” James Sandy, a member of McGlinchey Stafford, said in a memo to clients.

If those actions trigger mandatory fees orcosts, “consider whether such a business model could constitute an unlawful ‘junkfee’ and, potentially, grounds for an Unfair, Deceptive or Abusive Acts or Practicesaction,” Sandy wrote.

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CFPB Supervisory Highlights Reflect Continued Emphasis on “Junk Fees”

April 25, 2024

In the latest edition of its Supervisory Highlights, the CFPB targets so-called “junk fees” in the mortgage servicing industry. According to the CFPB, its examiners found that mortgage servicers continued to assess junk fees in a wide array of activities, including unnecessary property inspection fees and improper late fees.

Published Article

Junk Fee Supervisory and Enforcement Activity Targets Auto Servicers

October 23, 2023

The CFPB has made combating so-called junk fees an agency priority, bringing multiple enforcement actions, undertaking supervisory activity, and collaborating with the FTC and the Biden administration to curb consumer finance companies from charging fees.  

Published Article

The Fuss About Junk Fees, Pt. 2: Recent Regulatory, Enforcement, and Private Actions Challenging Fees

July 27, 2023

In this three-part series, we first reviewed the Biden Administration’s collaborative efforts with the CFPB and the FTC to regulate “junk fees.” In this second piece, we will highlight recent regulatory, enforcement, and private actions and trends. Third and finally, we will outline a few considerations for financial services companies to consider when navigating the new normal when it comes to challenges to so-called “junk fees” by consumers and regulatory agencies.

Alert

The Fuss About Junk Fees, Pt. 1: Biden, CFPB, and FTC Collaborate

July 19, 2023

This three-part series will first review the Biden Administration’s collaborative efforts with the CFPB and the FTC to regulate “junk fees.” Second, we will highlight recent regulatory, enforcement, and private action trends. Third and finally, we will outline a few considerations for financial services companies to consider when navigating the new normal when it comes to challenges to so-called “junk fees” by consumers and regulatory agencies.

Published Article

CFPB: ‘Junk fees’ in auto servicing are unfair, deceptive

April 4, 2023

Continuing its aggressive push of investigating and regulating so-called junk fees charged by banks and financial companies, the CFPB recently issued a special edition of its Supervisory Highlights, which outlines such fees it uncovered in various industries, including auto servicing.