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Policy Integrity Work Shapes FTC Ban on Hidden Fees

In October 2023, the Federal Trade Commission (FTC) released a proposed rule that bans the use of “junk fees” in transactions including hotel reservations, vehicle rentals, and event ticket purchases. The rule would require sellers to present the full price upfront and disclose whether any fees are refundable.

This rulemaking was initiated in response to a 2021 petition submitted by the Policy Integrity. Our petition, which was co-authored by two NYU Law students in our Regulatory Policy Clinic, called for a new rule banning the use of “drip pricing”—a strategy used by some sellers to lure in consumers by advertising deceptively low prices, only to reveal hidden mandatory fees after a consumer is on the verge of completing a transaction. In a New York Times essay, petition co-author Max Sarinsky discussed how the FTC can address this problematic practice. Laura A. Figueroa, a former legal fellow at the Institute for Policy Integrity, also testified at an FTC meeting to discuss drip pricing and encourage the FTC to bar the practice.

The proposed rule references Policy Integrity and our work more than a dozen times, including both our petition and our 2023 comment letter supporting the FTC’s authority to issue this regulation.