FTC Bans Hidden Fees for Tickets & Rentals

New FTC Rule Targets Hidden Fees in Live Events and Lodging

The U.S. Federal Trade Commission (FTC) has recently published comprehensive documentation outlining its new “Rule on Unfair or Deceptive Fees.” This regulation, scheduled to become enforceable on May 12th, specifically prohibits the practice of concealing fees associated with live events, hotels, and short-term rental properties.

Guidance for Businesses

A newly released Frequently Asked Questions (FAQ) document serves as a guide for businesses operating in these sectors. It provides detailed clarification regarding the requirements for pricing transparency under the new rule.

Who is Affected?

The rule’s scope extends to a wide range of businesses. This includes live-event ticket sellers and providers of short-term lodging, such as hotels, motels, Airbnb, and VRBO. Furthermore, third-party platforms, resellers, and travel agents are also subject to the new regulation.

Notably, Airbnb proactively updated its platform prior to the rule’s implementation to display the complete cost of stays upfront to its users.

Key Provisions of the FTC Rule

According to the FTC, the following stipulations are now in effect:

Live-event tickets encompass admissions to concerts, sporting events, theatrical performances, and other live shows. This excludes pre-recorded audio or video content.
The total price displayed must incorporate all known charges and fees.
Websites are obligated to present the total price prominently in advertisements and offers for both live events and short-term lodging.
The total price must be displayed more conspicuously than any other pricing details.
Misleading representations regarding fees and charges are strictly prohibited.
Businesses must provide accurate information about fees, including clear refund policies.
Vague terminology like “convenience fees,” “service fees,” or “processing fees” should be avoided.
Dynamic pricing strategies remain permissible, provided the pricing information is not deceptive.

Permitted Fee Exclusions

The FTC’s FAQ also clarifies which types of fees may be excluded from the total advertised price. These include government taxes and fees, shipping costs, and charges for optional goods or services purchased concurrently.

It’s important to note that handling charges are not included in this list of permissible exclusions.

Disclosure Requirements

If a business chooses to exclude certain charges from the initial advertised price, the FTC mandates clear disclosure of these excluded charges before requesting payment. For instance, if shipping costs are not included in the advertised price, the amount and purpose of these charges must be explicitly stated.

A Landmark Regulation

The FTC initially approved this rule in December 2024. This represents a significant regulatory milestone and a considerable victory for consumers who have long expressed frustration with hidden fees.