This, the FTC proposed a new rule that would ban hidden fees and bogus fees that are used to drive up the cost of a service higher than advertised. This practice has been very common in cable TV for years. Cable companies will advertise one price for TV but include a long list of fees, including RSN fee, Broadcast TV fee, HD Technology fee, and more.
So what exactly will this mean for you and how will this change cable TV going forward? Today, we are going to break down everything you need to know.
What exactly is the FTC proposing?
Now, under these proposed new rules, cable companies would no longer be able to hide these fees in small text or in your contract but would be forced to include them upfront.
In the press release, the FTC said these “provisions are aimed at ensuring businesses will no longer be able to lure consumers with artificially low prices that they later inflate with mandatory fees or to deceive consumers about the nature and purpose of fees.”
“All too often, Americans are plagued with unexpected and unnecessary fees they can’t escape. These junk fees now cost Americans tens of billions of dollars per year—money that corporations are extracting from working families just because they can,” said FTC Chair Lina M. Khan. “By hiding the total price, these junk fees make it harder for consumers to shop for the best product or service and punish businesses who are honest upfront. The FTC’s proposed rule to ban junk fees will save people money and time, and make our markets more fair and competitive.”
The FTC says this new rule would ban hidden fees and bogus fees. Here is how the FTC describes these fees:
- Hidden Fees. Consumers told the FTC that dishonest businesses routinely engage in bait-and-switch pricing tactics that hide mandatory fees and deceive consumers about the price. This is because fees imposed later, but before the purchase is made, significantly increase the total that consumers pay. Accordingly, the proposed rule would prohibit businesses from advertising prices that hide or leave out mandatory fees; and
- Bogus Fees. Many consumers also said that they often do not know what fees are for, because dishonest businesses routinely misrepresent or fail to adequately disclose the nature or purpose of the fees. The rule would prohibit sellers from misrepresenting fees and require them to disclose upfront the amount and purpose of the fees and whether they are refundable.
How will this impact cable TV companies like Comcast and Spectrum?
For years cable TV companies have used fees to help drive up the cost of TV higher than the advertised rate. Comcast now charges over $40 a month for RSN fees and broadcast TV fees. These new rules could force companies like Comcast and Spectrum to include them in the advertised price.
For consumers, this is a huge win to clearly see the price they will pay once everything is rolled in. For cable TV companies, it could force them to make changes to their advertising when it comes to price.
When will these rules take effect?
These rules are still only proposals, but the FTC seems determined to make them law. For now, though, we could be years away from them being implemented, but this is a good first step.
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