The Federal Trade Commission (FTC) has announced a new Junk Fees Rule aimed at eliminating deceptive pricing practices in the live-event ticketing and short-term lodging industries. The rule targets bait-and-switch tactics and hidden fees that have been criticized for misleading consumers and undermining fair competition.

FTC Chair Lina M. Khan emphasized the importance of transparency in pricing, 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 is expected to save Americans significant amounts of money and time by ending these unfair fees.

The Junk Fees Rule mandates clear disclosure of total prices, including all mandatory fees, whenever businesses advertise or display prices for live-event tickets or short-term lodging. This requirement aims to facilitate easier comparison shopping for consumers by preventing surprise additions like "resort," "convenience," or "service" fees.

The FTC's initiative began in 2022 with a public consultation on whether such a rule could curb unfair pricing tactics. After gathering over 12,000 initial comments and more than 60,000 additional responses following a proposed rule announcement in October 2023, the final rule was crafted based on this extensive feedback.

According to the FTC's estimates, the new regulation will save consumers up to 53 million hours annually otherwise spent searching for complete price information. This translates into an estimated $11 billion in savings over ten years.

While the final rule does not ban specific fee types or amounts, it requires that advertised prices prominently display the full cost inclusive of all mandatory charges. Businesses must also clearly disclose any excluded allowable fees before consumers agree to purchase.

Beyond ticketing and lodging sectors, longstanding laws continue to prohibit deceptive fee practices across other industries. The FTC plans to enforce these rules vigorously against bait-and-switch tactics through case-by-case actions.

The decision to publish the final rule was approved by a 4-1 vote from the Commission members. Commissioner Andrew Ferguson dissented while separate statements were issued by Chair Lina M. Khan and Commissioners Rebecca Kelly Slaughter and Melissa Holyoak.

The Junk Fees Rule will become effective 120 days after its publication in the Federal Register. Annette Soberats, Stacy Cammarano, and Karen Mandel led its development within the FTC’s Bureau of Consumer Protection.

The FTC remains committed to promoting competition while protecting consumer interests without resorting to threats or demands for money transfers. For more information on consumer protection topics or reporting fraudulent activities, individuals are encouraged to visit consumer.ftc.gov or ReportFraud.ftc.gov.