The Federal Trade Commission (FTC) is introducing a new rule to address hidden fees in ticketing and vacation rental pricing, promising greater transparency for consumers.
The FTC’s Junk Fees Rule prohibits bait-and-switch tactics, requiring businesses to prominently display total prices, including all fees, upfront. This change targets deceptive practices that surprise customers with additional costs at checkout.
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Leigh Elizabeth Israel, owner of Avondale Travel, noted that she’s been fighting for this change for years, adding that such fees often disrupt travel budgets.
“It can make or break a trip,” she said. “You’ve budgeted for a hotel, and suddenly, there’s an extra $500.”
John Brown, purchasing tickets for a WWE live holiday tour, shared his frustrations. “A ticket can cost $25, but after fees, it can go up as high as $45 to $50.”
He adds that he purchased his tickets in person to avoid the extra charges.
The Economic Council of Advisers estimates that hidden fees cost Americans $90 billion annually, which equals about $650 per American household. The FTC’s new guidelines, set to take effect 120 days after publication in the Federal Register, could save consumers up to 53 million hours a year in searching for accurate pricing.
This is the latest step in the FTC’s efforts to protect consumers and promote competition. Here’s what consumers can expect after this rule goes into effect:
- Up-Front Pricing: Businesses must disclose the total price—including fees.
- Prominent Display: The all-in price must be the most visible.
- Fee Transparency: Allowable fees must be explained before purchase.