The FTC prohibits unwanted hidden fees on tickets and purchases of short-term lodging

I can’t remember a recent occasion when the last amount I owed, whether it was for a hotel reservation or a concert ticket, didn’t make my eyes pop out in shock. Now, a new rule from the Federal Trade Commission (FTC) is supposed to limit these feed-and-switch pricing tactics. The FTC announced the Undue Fees Act, which requires live event ticketing and lodging businesses to be transparent about the total amount owed. Some companies will continue to be monitored on a case-by-case basis for fraudulent pricing.

The new law, first proposed in 2023, should remove all those “premises” and “service” fees paid at checkout that often sound absurd. Companies can still technically install them, but they must be counted from the original price shown. Required disclosures mean the first price you see in displays, advertisements and the like must also be the amount you pay.

The Junk Fees Rule also requires businesses to display that final amount “more prominently” than any other information. Therefore, it cannot say that it will cost one thing in a large font and then in small letters add that there are many fees on top of it. “People deserve to know ahead of time what they’re being asked to pay – without worrying that later they’ll be hit with mysterious fees they didn’t budget for and can’t avoid,” said FTC Chairwoman Lina M. Khan. “I urge law enforcement to continue to crack down on these illegal currencies and encourage federal and state policymakers to build on this success with legislation that bans unfair and deceptive currencies across the economy.”

The FTC says the Junk Fee Rule will save people an estimated 53 million hours each year and more than $11 billion over the next decade. The Act will take effect 120 days after it is published in the Federal Registrar.