Are You Charging 'Junk Fees'? What the New Ban Means for Your Business

These fees are now under significant regulatory scrutiny. The Federal Trade Commission (FTC) implemented a new rule, effective May 12, 2025, specifically targeting "hidden, misleading, or unavoidable" junk fees in live-event ticketing and short-term lodging. 

Beyond this, the Consumer Financial Protection Bureau (CFPB) continues its campaign against similar deceptive fees in financial services, including actions against excessive overdraft and credit card late fees. Businesses that fail to comply with these regulations face substantial penalties.

For small businesses, especially in service industries, this could mean a major shift in how you advertise prices, structure contracts, and invoice customers to ensure full transparency.

Examples of Fees That Could Be Considered “Junk”

• Late disclosure of mandatory service or admin fees.
• "Convenience" fees that aren’t listed up front.
• Automatic cancellation or rescheduling charges.
• Fees that sound optional but aren’t really.
• Add-ons that are required to complete a purchase.

If a customer can’t reasonably anticipate the fee before they’re ready to pay—or if they can’t opt out—it might be considered a junk fee.

Why It Matters to Your Business

Small businesses can’t afford to lose trust. Even unintentional junk fees can damage your reputation—or worse, land you in legal trouble.

According to the FTC, U.S. consumers lose billions of dollars each year to hidden fees. The crackdown aims to make pricing clearer and restore fairness.

If your business charges any kind of add-on or service fee, you may want to revise your:

• Website checkout process.
• Invoices and receipts.
• Contracts and customer agreements.
• Marketing and promotional materials.

Questions You Should Be Asking About Junk Fees

Start with a quick audit. These questions can guide your review and help you stay compliant:

• Are all of our fees clearly listed before checkout or agreement signing?
• Could any of our charges be seen as "unexpected" or hard to find?
• Do our contracts spell out all fees in plain language?
• Have customers ever complained about surprise charges?
• Do our competitors charge similar fees—and how do they disclose them?

What You Can Do Next

If you're unsure whether your fees might be at risk under the new ban:

• Review your pricing disclosures: Make sure your prices include all mandatory charges.
• Update your contracts and invoices: Use clear, plain language and avoid fine print surprises.
• Ask Rocket Copilot or talk to a Legal Pro: Ask them to review how your fees are structured and whether your business could be exposed.

The junk fee ban isn’t just for big corporations. Small businesses need to get ahead of it, too. Taking a closer look at how you present prices can protect your business—and build more trust with customers.