The U.S. Federal Trade Commission (FTC) recently introduced a new rule aimed at curbing unfair or deceptive fees in various sectors such as live events, hotels, and short-term rentals. The rule, slated to go into effect on May 12, 2025, specifically targets hidden fees and practices like bait-and-switch pricing. It also emphasizes the importance of pricing transparency and prohibits any actions that misrepresent total prices and fees.
Businesses in industries like live event ticket sales and short-term lodging, including hotels, motels, Airbnb, and VRBO, will be directly impacted by this new regulation. Third-party platforms, resellers, and travel agents are also subject to compliance. For instance, Airbnb has already made adjustments to its service to display the total cost of stays upfront in anticipation of this rule.
According to the FTC, live event tickets encompass a range of experiences, including concerts, sporting events, music, theater, and other live performances. The total price displayed must incorporate all known charges and fees, and it should be clearly presented in advertisements and offers. Transparency is key, with the total price required to be more prominently featured than any other pricing information. Businesses must also provide accurate information regarding fees, including refund policies, and steer clear of vague terms like “convenience fees” or “service fees.”
While dynamic pricing strategies are still permissible, they must not mislead consumers. The FTC’s FAQ also outlines the types of fees that can be excluded, such as taxes, government fees, shipping charges, and optional goods or services. However, businesses must disclose any excluded charges before requesting payment to maintain transparency.
The FTC’s decision to implement this rule in December 2024 represents a significant victory for consumers who have long been frustrated by hidden fees. By enforcing pricing transparency and prohibiting deceptive practices, the FTC aims to protect consumers from unexpected charges and promote fairness in various industries.
