STATEMENT: Junk fees ban to help consumers, businesses

WASHINGTON – In a huge win that will save consumers billions of dollars every year, the Federal Trade Commission (FTC) on Tuesday announced new rules to prohibit surprise junk fees involving live-event tickets, targeting concerts and sporting events, and involving “short-term lodging,” which generally means hotels and rentals for vacation homes, cabins and cottages. The Junk Fees Rule comes more than a year after the FTC proposed new rules to squash surprise fees and demand that companies provide accurate total prices up front. 

The Junk Fees Rule, officially called the “Rule on Unfair or Deceptive Fees,” requires that businesses “clearly and conspicuously” disclose the final, total price including all mandatory fees any time they offer, display or advertise any price for live-event tickets or short-term lodging. They also cannot misrepresent any fee for live-event tickets or short-term lodging and must show the total price more prominently than other prices or any itemization.

Federal officials say unexpected junk fees hurt both consumers and businesses. Gotcha fees cost Americans tens of billions of dollars annually and harm transparent businesses whose prices might look more expensive because they honestly disclose everything up front. 

The FTC was considering restricting junk fees across a variety of industries, including car rentals, cellphone bills and airline tickets. However, this announcement is limited to tickets and short-term lodging. FTC Chair Lina Khan said in a statement: “I urge enforcers to continue cracking down on these unlawful fees and encourage state and federal policymakers to build on this success with legislation that bans unfair and deceptive junk fees across the economy.”

The rules are expected to take effect 120 days after publication in the Federal Register.

In response to the new FTC rule, Teresa Murray, Consumer Watchdog director for the Public Interest Research Group, said:

“This is great news that’s long overdue. In what universe would a reasonable person think it was ever OK for a business to disclose only part of the actual cost of its product or service? For years, companies have abused customers with surprise fees, buried disclosures and deceptive names for fees. 

“We know that consumers have been getting nickel and dimed – or dollared and 20 dollared – for years. This adds up to billions of dollars in fees and tens of millions of hours we waste playing ‘Where’s Waldo’ with mystery fees.

“We are disappointed, though, that these rules don’t go beyond event tickets and hotels. These two industries are the biggest problems, but certainly not the only ones.

“This isn’t about capping fees that businesses charge. It’s about requiring transparency. Consumers deserve honesty, fairness and the ability to make informed buying decisions.”

See our consumer guide: Junk fees: How to avoid them or fight them

For more information or to schedule an interview, contact Teresa at [email protected] or 216-202-0496 or Jon at [email protected] or 708-694-9121.

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Other consumer-friendly fee transparency rules announced this year include:

• Internet providers must provide “nutrition labels” that itemize pricing as of Oct. 10, 2024, the Federal Communications Commission said. 
• Cable/ satellite providers will be required to disclose “all-in pricing” in early 2025, the FCC said.
• Airlines will be required in April 2025 to disclose any baggage or cancellation / change fees up front, along with the ticket fare, the Department of Transportation said. 
• Airlines can’t charge extra for a child to sit next to an adult travel companion. This was part of a bill passed by Congress in May 2024; proposed rules could take effect in early 2025.