FTC bans hidden junk fees in short-term lodging, live-event ticket prices
The U.S. Federal Trade Commission passed a rule on Tuesday banning hidden “junk fees” for live events, hotels, and vacation rentals. The agency says the new rule prohibits “bait-and-switch pricing,” and other practices that hide total prices and bury junk fees in the live-event ticketing and short-term lodging industries, noting that these “unfair and deceptive” practices harm consumers.
The FTC says consumers will no longer be surprised by “resort,” “convenience,” or “service” fees inflating the advertised price when searching for lodging or a ticket to a show or sports game. As a result, it will be easier for consumers to compare prices when purchasing a rental or ticket, the agency says.
It’s worth noting that the new rule doesn’t prohibit businesses from charging these types of fees, it instead requires them to advertise them and the total cost upfront.
“People deserve to know up-front what they’re being asked to pay—without worrying that they’ll later be saddled with mysterious fees that they haven’t budgeted for and can’t avoid,” said FTC Chair Lina M. Khan in a press release. “I urge enforcers to continue cracking down on these unlawful fees and encourage state and federal policymakers to build on this success with legislation that bans unfair and deceptive junk fees across the economy.”
The new rule also requires businesses to make the total price displayed more prominently than any other pricing information. In addition, businesses that don’t disclose shipping or taxes in the advertised price must clearly disclose those fees before the consumer enters their payment information.
The agency estimates that the new rule will save consumers up to 53 million hours per year in wasted time spent trying to find the total price for lodging and live-event tickets.
As President-elect Donald Trump is set to take office next month, it’s possible that his administration may seek to withdraw the rule.
Today’s announcement a week after Trump nominated Andrew Ferguson, a current Republican FTC commissioner, to replace Khan.
