FTC and CFPB witnesses urge Colorado to strengthen laws on junk fees, algorithmic pricing and worker protections as federal enforcement weakens

Commissioner Alvaro Bedoya of the Federal Trade Commission and former Consumer Financial Protection Bureau attorney Seth Frotman told the joint House and Senate Judiciary Committees in the Colorado State Capitol on March 19 that state action is needed now to protect consumers, workers and small businesses as federal enforcement falters.

The witnesses urged Colorado lawmakers to pass bills that would bar hidden “junk” fees in housing and other markets, prohibit algorithmic surveillance pricing and algorithmic wage-setting, and strengthen workers’ rights. They warned that recent moves in Washington — including the alleged, and widely disputed, removal of FTC commissioners and the effective shutdown of parts of the CFPB — reduce federal capacity to police unfair or deceptive business practices.

Bedoya, who described recent federal efforts to block large mergers and to sue companies for monopolistic or deceptive conduct, framed his testimony around two themes: why recent federal personnel changes matter to market enforcement, and what states can do to fill gaps. He said the FTC has litigated and won cases against large landlords and other firms for adding hidden fees to consumers’ bills and pointed to the federal government’s role in blocking the proposed Kroger–Albertsons supermarket merger.

“The Kroger Albertsons merger … would have taken the biggest supermarket in town and merged it with the next biggest supermarket in town,” Bedoya said, asserting the merger would have raised prices and lowered wages. He told lawmakers that Colorado has a “singular role” to play and explicitly urged passage of bills the committee is considering. Bedoya cited a pending junk-fees measure and a separate bill he identified as targeting algorithmic wage-setting and surveillance pricing for rideshare and delivery workers; in testimony he referred to those measures by the bill language used in the hearing record.

Bedoya also argued for retaining or adding a private right of action in state consumer-protection legislation so individuals can bring claims when enforcement agencies cannot pursue every case. “A private right of action is critical,” he said, adding that private suits allow consumers to contest hidden fees “separate and apart from whether a state or a federal law enforcer has the ability to prioritize their case.”

Lawmakers pressed Bedoya on enforcement trade-offs and potential economic effects of litigation; Bedoya acknowledged litigation costs but said targeted enforcement can produce broad consumer and worker benefits. He described multiple FTC cases — including suits against landlords over hidden fees and actions to block grocery mergers — as evidence that strong enforcement can lower prices and raise wages.

Former CFPB official Seth Frotman told the committee that the bureau has been an important backstop for consumers and small businesses, and that recent changes in Washington have curtailed or halted parts of that work. “The CFPB fights on behalf of American families to make sure they don't get ripped off, and it conducts vigilant oversight of risky financial products,” Frotman said in opening remarks. He described restitution recovered during the CFPB’s earlier years (citing more than $20 billion returned to consumers during the bureau’s operations) and said the CFPB processed millions of individual complaints that informed enforcement priorities.

Frotman warned that when a federal regulator steps back, the burden shifts to state attorneys general, local regulators, legal aid and private litigants. He urged Colorado to ensure its consumer-protection laws and administrative authorities are able to address unfair, deceptive or abusive practices and to preserve private enforcement as a complement to public enforcement. “If there was a situation where the federal consumer laws did not have a private right of action, consumers would be much, much worse off,” he told the committee.

Both witnesses recommended concrete state-level approaches discussed during the hearing: enact or keep a private right of action for consumer-protection claims; adopt statutes banning certain hidden fees in residential housing; prohibit surveillance pricing and require wage differentials for gig workers to be tied to job-related performance; and ensure state enforcement tools and funding are adequate if federal enforcement is limited.

Committee members from both parties asked questions about litigation costs for small businesses, the interplay of state and federal enforcement, the mechanics of algorithmic pricing, and how to preserve discounts for some consumers while preventing discriminatory price-setting. Bedoya and Frotman both said strong enforcement can deter lawbreaking and improve market transparency without necessarily imposing net costs on consumers.

The hearing produced no formal votes or directives; rather, it was a policy briefing and a call to legislative action. Colorado lawmakers indicated the committee will continue to consider bills on junk fees, surveillance pricing and worker protections during the session.

Bedoya closed by reiterating his view that Colorado can lead on these issues if it chooses to act. Frotman closed by urging states to shore up enforcement capacity and preserve private claims to protect individual consumers while public agencies prioritize systemic enforcement.

The committee’s record includes numerous exchanges with members asking how Colorado can best protect residents if federal enforcement remains limited; witnesses repeatedly emphasized the complementarity of private suits, state enforcement and federal action.