FTC Rule Bans Hidden Fees for Live Events Hotels and Rentals
The U.S. FTC's new rule, effective May 12, prohibits hidden fees and deceptive pricing for live event tickets, hotels, and short-term rentals. It requires businesses and platforms to disclose total prices upfront, ban bait-and-switch tactics, and clearly state excluded fees like taxes or shipping. This landmark regulation enhances pricing transparency and protects consumers from misleading charges.
The U.S. Federal Trade Commission (FTC) has introduced a significant new regulation called the Rule on Unfair or Deceptive Fees, set to take effect on May 12, 2025. This rule targets hidden fees and deceptive pricing practices in industries including live event ticket sales, hotels, motels, and short-term rental services such as Airbnb and VRBO.
The FTC's rule prohibits several unfair practices:
- Hidden fees that are not disclosed upfront
- Bait-and-switch pricing tactics
- Concealing or misrepresenting total prices and fees
The rule applies broadly to live event ticket sellers, short-term lodging providers, third-party platforms, resellers, and travel agents. Live event tickets include concerts, sports, theater, and other live performances, but exclude pre-recorded shows.
Key requirements include:
- Total price must include all known charges and fees.
- Total price must be prominently displayed in ads and offers.
- No misrepresentation of fees or refund policies.
- Avoid vague fee terms like “convenience fees” or “processing fees.”
Dynamic pricing remains allowed if pricing information is not misleading. The FTC also clarifies which fees can be excluded from the total price, such as taxes, government fees, shipping charges, and optional goods or services. However, any excluded fees must be clearly disclosed before payment.
This rule represents a landmark consumer protection effort addressing long-standing frustrations with hidden fees in ticketing and lodging industries. Companies like Airbnb have already updated their platforms to comply by showing total costs upfront.
For businesses and platforms, this regulation demands enhanced transparency and clear communication with consumers, reducing legal risks and improving customer trust. Adapting pricing systems and marketing materials to meet these requirements is crucial for compliance.
The FTC’s new rule highlights the growing importance of regulatory compliance in digital commerce and event industries, emphasizing fair pricing practices and consumer rights.
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