A little more than a year after the Federal Trade Commission (FTC) proposed a rule to ban junk fees, it announced this week 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 short-term lodging and live-event ticketing industries. According to the FTC, “these unfair and deceptive pricing practices harm consumers and undercut honest businesses.”
The Junk Fees Rule will ensure that pricing information is presented in a “timely, transparent and truthful” way to consumers of live-event tickets and short-term lodging. Consumers searching for hotels or vacation rentals or seats at a show or sporting event, the FTC says, “will no longer be surprised by a pile of ‘resort,’ ‘convenience’ or ‘service’ fees inflating the advertised price.” By requiring up-front disclosure of total price including fees, the rule will make comparison shopping easier, resulting in savings for consumers and leveling the competitive playing field.
To reiterate, this Final Rule does not prohibit any type or amount of fee, nor does it prohibit any specific pricing strategies. Rather, it only requires that businesses that advertise their pricing tell consumers the “whole truth” up front about the prices and fees.
To accomplish this, the Junk Fees Rule requires that businesses to “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. Businesses cannot misrepresent any fee or charge in any offer, display or ad for 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.
Finally, the rule requires businesses that exclude allowable fees up front to clearly and conspicuously disclose the nature, purpose, identity and amount of those fees before consumers consent to pay. For instance, businesses that exclude shipping or taxes from the advertised price must disclose those fees before the consumer enters their payment information.
Related Stories
DOT Issues New Protections for Travelers With Disabilities
Louisiana Advisors’ Voices Heard: No New Sales Tax on Services
DOT Wants Airlines to Pay Passengers for Lengthy Delays
ASTA, AHLA Applaud Federal Court Striking Down DOL Overtime Rule