Junk fees plague industries like hotels and airlines, ultimately costing consumers billions of dollars each year in surcharges, “administration fees” and other overpriced nonsense. . Apparently car dealers actually charge a commission. That was enough of a problem for the federal government; Focus on itthe situation changed in the dealer’s favor.
It was first discovered that motor 1, the Federal Trade Commission suspended a ban on junk fees for dealers that was originally scheduled to take effect this summer. The ban came after the National Automobile Dealers Association filed a petition to protest the move.
It took a long time for the ban to be issued. After observing and receiving complaints about dealer fees over the past 10 years, F.T.C. decided take action.in 126 page proposalAs such, the agency set out to target and ban four key tactics/acts that dealers use to trap people. One of them was junk charges. The rules would crack down on things like document fees, price gouging disguised as protection packages, and non-negotiable add-ons. This set of official rules is called the Combating Automotive Retail Fraud (CARS). announced In December 2023.
Dealers naturally protested the loss of the thick cake. If the federal government blocks these fees, how is it going to continue to scam people? So both the National Automobile Dealers Association and the Texas Automobile Dealers Association pushed back by filing petitions with the Fifth Circuit Court of Appeals. The point was to keep this rule tied up in court from going into effect by the July 30 deadline, and that’s exactly what happened. The court agreed to hear the petition.Speaking on this issue as Motor1 (and her Jalopnik friend) Victoria Scott pointing outwhether the FTC even has the legal authority to make the rules.
A key issue in the legal battle is whether the law actually applies within the FTC’s jurisdiction. In a petition to the Fifth Circuit, the dealer groups call this an “abuse of discretion” and ask the court to block its implementation. The FTC argues that the rule “imposes no if any substantial costs” on law-abiding merchants, but instead helps both merchants and consumers by eliminating junk fees and hidden costs. They say they are simply ensuring a more level playing field.
Even if the dealer gets what he wants by suspending enforcement of the rules; order of postponement There is a possibility that it may still be effective. So while dealers may be celebrating this outcome, they are likely only delaying the inevitable.