FTC announces Final Junk Fees Rule on Short Term Lodging

Regulations take aim at ‘resort,’ ‘convenience’ and ‘service’ fees >>

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December 18, 2024

The exterior facade of the Federal Trade Commission (FTC) building in Washington, D.C. The building features a symmetrical, beige stone design with large windows and a decorative relief sculpture above the entrance. The doorway is framed by intricate metalwork and is labeled "Federal Trade Commission." Two wall-mounted lanterns flank the entrance, highlighting its classic architectural design.

The Federal Trade Commission (FTC) announced a final Junk Fees Rule to prohibit bait-and-switch pricing and other tactics used to hide total prices and bury junk fees in the live-event ticketing and short-term lodging industries. These unfair and deceptive pricing practices, said the agency, “harm consumers and undercut honest businesses.”

Lina Khan, chair of the commission, said that 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. The FTC’s rule, she said, will put an end to junk fees around live event tickets, hotels, and vacation rentals, saving Americans billions of dollars and millions of hours in wasted time.

Consumers searching for hotels or vacation rentals or seats at a show or sporting event will no longer be surprised by a pile of “resort,” “convenience,” or “service” fees inflating the advertised price, according to the FTC. By requiring up-front disclosure of the total price including fees, the rule will make comparison shopping easier, resulting in savings for consumers and leveling the competitive playing field.

The FTC estimates that the Junk Fees Rule will save consumers up to 53 million hours per year of wasted time spent searching for the total price for live-event tickets and short-term lodging. This time savings is equivalent to more than $11 billion over the next decade.

The final rule does not prohibit any type or amount of fee; nor does it prohibit any specific pricing strategies. Rather, it simply requires that businesses that advertise their pricing tell consumers the whole truth upfront about prices and fees. The rule requires that businesses clearly and conspicuously disclose the true total price inclusive of all mandatory fees whenever they offer, display, or advertise any price of live-event tickets or short-term lodging.

In addition, the rule requires businesses to display the total price more prominently than most other pricing information. This means that the most prominent price in an ad needs to be the all-in total price.

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