The Federal Trade Commission (FTC) has announced a new rule targeting junk fees, which are deceptive or hidden charges that consumers often encounter when booking hotels online or purchasing live-event tickets. These fees, such as mandatory "resort fees" in hotels or undisclosed service charges for tickets, often inflate the final cost significantly compared to the advertised price.
The rule, known as the Trade Regulation Rule on Unfair or Deceptive Fees, mandates that companies disclose the full, total price upfront – including mandatory fees – clearly and prominently in advertisements, listings, and at the point of sale. It also prohibits businesses from misrepresenting the nature, purpose, or refundability of fees.
This consumer-friendly regulation aims to eliminate "drip pricing," a practice where additional fees are gradually revealed during the purchasing process, leading to frustration and mistrust among consumers. The FTC estimates that these changes will save consumers billions of dollars annually and level the playing field for businesses that have been transparent about pricing.
Why this rule matters to me (and likely to you, too)
As someone who regularly shops for hotels and event tickets, I can’t express how frustrating it is to think I’ve found a good deal, only to discover that mandatory hidden fees make the price uncompetitive. These junk fees feel like a bait-and-switch tactic, and I know I’m not alone in feeling this way.
I’m heading to Las Vegas in January for CES, and nearly every hotel there tacks on a "resort fee" that can amount to 30% or more of the room rate. This is particularly frustrating because these fees aren’t optional, and they often cover services I either don’t use or expect to be included in the base price – like access to a gym or WiFi. The worst part? These fees are usually only disclosed after I’ve already spent time comparing options, adding unnecessary stress to the booking process.
I believe this new FTC rule is a big win for consumers. Transparency in pricing will make comparison shopping easier and help all of us make more informed decisions. Honest businesses will also benefit because they’ll no longer be undercut by competitors that advertise deceptively low prices.
That said, the rule won’t take effect until 120 days after it’s published in the Federal Register. This means it will likely be up to the next administration to decide whether to enforce it rigorously. For now, it’s a step in the right direction – but one we’ll have to wait to feel the effects of.
[Image credit: Techlicious/Midjourney]
