Reed Smith Client Alerts

Key takeaways

  • The final rule’s scope was narrowed to apply only to live-event tickets and short-term lodging
  • Businesses displaying prices for live-event tickets or short-term lodging rentals must display the total price inclusive of all associated fees, except governmental fees, shipping, and optional ancillary goods or services
  • All costs not included in the total price must be clearly and conspicuously disclosed (including their purpose) prior to consumers consenting to the transaction
Concert crowd

On December 17, the Federal Trade Commission (FTC) released a new trade regulation rule entitled “Rule on Unfair or Deceptive Fees” (the Rule). The Rule targets hidden or “junk” fees in transactions for live-event tickets and short-term lodging (such as hotels, motels, and vacation rentals). In these industries, when a price is advertised, the total price must be more prominent than any other pricing information. The total price must include all associated fees except for government fees (e.g., taxes), shipping costs, and costs for optional ancillary goods or services (the Total Price). Prior to obtaining consumer consent to the transaction, any fees not included in the Total Price must be disclosed (including their purpose), and the final amount to be paid must be more or equally as prominently disclosed as the Total Price. This Rule will take effect 120 days after publication in the Federal Register.

What are hidden or “junk” fees?

The FTC characterizes transaction fees, convenience fees, service charges, etc. that are not included in the advertised price as hidden or “junk” fees. The Rule is aimed at promoting pricing transparency to permit the consumer to understand the true price of a service at the time of the offer/advertising.