Federal Trade Commission (FTC) has today unveiled a groundbreaking final rule aimed at eliminating “junk fees” in the live-event ticketing and short-term lodging sectors. This rule specifically targets bait-and-switch pricing and other deceptive practices that obscure total costs with hidden fees, which have long been criticized for misleading consumers and stifling competition among honest businesses.
FTC Chair Lina M. Khan emphasized the consumer benefits of this new regulation, stating, “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.” She added that the rule would save Americans billions of dollars and millions of hours currently wasted navigating through deceptive pricing.
The rule mandates that all pricing for live events and short-term accommodations must be transparent, timely, and truthful. No longer will consumers be blindsided by additional charges like “resort,” “convenience,” or “service” fees after having made purchase decisions based on initial advertised prices. By ensuring all fees are included in the upfront price, the FTC aims to facilitate easier comparison shopping, thereby enhancing consumer savings and promoting fair competition.
This changes has made many hopefully a ban like this will be coming for cable TV fees soon.
This regulatory move follows extensive public consultation. In 2022, the FTC sought public input, receiving over 12,000 comments on the impact of hidden fees on consumer spending and market competition. After a proposed rule was announced in October 2023, it attracted over 60,000 further comments which influenced the final draft of the rule.
According to the FTC’s analysis, the new rule could save consumers up to 53 million hours annually, which equates to more than $11 billion in time savings over the next ten years, by simplifying the process of finding the true cost of tickets and lodging.
Key Aspects of the Final Rule:
- Mandatory Disclosure: Businesses must disclose the total price, including all mandatory fees, clearly and conspicuously when offering or advertising tickets or lodging.
- Prominent Pricing: The all-in total price must be the most prominent figure in any advertisement, ensuring consumers see the true cost first.
- Clear Communication of Fees: If any fees are excluded from the initial price, businesses must explain these fees before the consumer finalizes payment.
While this rule focuses on ticketing and lodging, the FTC’s enforcement against misleading pricing extends to other sectors through case-by-case actions under existing laws.
The decision to finalize this rule passed with a vote of 4-1, with Commissioner Andrew Ferguson dissenting. Statements were issued by Chair Khan, Commissioners Rebecca Kelly Slaughter, Melissa Holyoak (concurring), and Andrew Ferguson (dissenting). The rule will become effective 120 days after its publication in the Federal Register.
The FTC’s Bureau of Consumer Protection staff, including Annette Soberats, Stacy Cammarano, and Karen Mandel, led the development of this final rule.
For more on this subject or to report any unfair business practices, consumers are directed to consumer.ftc.gov or ReportFraud.ftc.gov. The FTC encourages staying informed through its social media channels and subscriptions to its alerts and blogs.