The Federal Trade Commission () has unveiled a new regulation that prohibits applications and websites in the hotel and event sectors from utilizing hidden fees associated with bait-and-switch pricing tactics.
The agency discovered that it was a widespread practice for companies to advertise deceptive prices, which would subsequently be raised by undisclosed fees such as booking and resort charges, only disclosed during the checkout stage …
While companies may still impose additional junk fees, they must now include these in the displayed headline prices from the beginning, ensuring that consumers see the overall cost upfront.
The began its consultation process on this issue in 2022, gathering over 12,000 comments regarding hidden fees and misleading pricing. Following the agency’s announcement of its intentions, an additional 60,000 comments were submitted.
According to the , providing clear pricing information will facilitate easier comparison shopping and reduce the wasted time for consumers.
The Junk Fees Rule will guarantee that pricing details are shared with consumers of live-event tickets and short-term accommodations in a timely, transparent, and honest manner, two industries that the Commission has specifically examined.
Consumers looking for hotels, vacation rentals, or tickets for shows and sporting events will no longer encounter unexpected charges labeled “resort,” “convenience,” or “service” fees that inflate the initially advertised costs. By mandating upfront disclosure of the complete price, including fees, the new rule will simplify comparison shopping, saving consumers money and enhancing competition […]
The estimates that the Junk Fees Rule will save consumers approximately 53 million hours each year that would otherwise be spent searching for the actual prices of live-event tickets and short-term lodging.
This regulation will extend beyond apps and websites to encompass advertisements, meaning companies will not be authorized to promote a price unless it incorporates all fees that the customer must pay to finalize a booking.
Although this rule specifically targets the hotel and event industries, the notes that it is already illegal for businesses in general to mislead customers about the true prices of their goods and services. The agency will continue to exercise its law enforcement authority across other sectors.
The law will be effective 120 days after its publication.
Photo by Yvette de Wit on Unsplash
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