Technology

FTC junk fee disclosure: New rules change tickets and hotel pricing forever

You’re excited to book tickets for a concert you’ve been waiting for all year. You see a ticket for $150, think it’s a good deal, and proceed to checkout — only to find that after “processing fees,” “service charges,” and other mysterious add-ons, the final price has ballooned to $200 or more. Or maybe you book a hotel room advertised for $120 a night, but when you check out, there’s a $30 “resort fee” you didn’t expect.

For years, consumers have complained about these “junk fees” — hidden or unexpected charges tacked onto the price of tickets, lodging, and other services. Now, the U.S. Federal Trade Commission (FTC) is stepping in with new regulations designed to end this frustrating practice.

In this article, we’ll break down what the new FTC junk fee disclosure rule means for consumers and businesses, why it was introduced, and how it will affect the way we buy tickets and book hotels.

Why the FTC is cracking down on junk fees

The term “junk fees” refers to any mandatory fees that aren’t clearly disclosed upfront in the advertised price. These fees are common in many industries but are particularly notorious in live events (like concerts and sports) and lodging (hotels, resorts, vacation rentals).

These hidden charges don’t just irritate consumers — they distort fair market competition. When companies hide part of the price, it becomes impossible to make true price comparisons. A hotel that advertises a $100 room might actually be more expensive than one advertising $130, once all fees are included.

A 2022 survey by Consumer Reports found that nearly two-thirds of Americans had experienced surprise fees when booking hotels or buying tickets. In many cases, these fees added as much as 20% to 30% to the total cost.

The FTC argues that upfront disclosure of the full price would allow consumers to make informed decisions, encourage honest competition, and build trust between businesses and their customers.

What does the new FTC junk fee disclosure rule say?

Under the new rule, businesses selling tickets to live events or offering lodging must clearly display the total price, including all mandatory fees, before a customer starts the checkout process.

This means no more surprises at the last page of booking or during payment confirmation. Customers should know exactly how much they will pay from the very beginning.

Specifically, the rule requires:

Clear and conspicuous disclosure: All mandatory fees must be included in the advertised price.
Breakdown of fees: While the total price must be upfront, companies can still provide a detailed breakdown (e.g., base price, service fee, facility fee), but the total must be most prominent.
Ban on deceptive practices: Businesses cannot mislead customers by calling mandatory fees “optional” or hiding them until checkout.

Who does this new rule affect?

The rule primarily targets two sectors:

Live event tickets: Concerts, theater performances, sports games, festivals, etc.
Lodging services: Hotels, motels, resorts, vacation rentals (like Airbnb and Vrbo).

However, the FTC hinted that similar rules may be extended to other sectors in the future, such as car rentals, utility services, and even airline bookings.

How will this rule benefit consumers?

The most immediate benefit for consumers is transparency.

When people know the full price upfront, they can:

Compare prices accurately: Avoid getting tricked by artificially low advertised prices.
Budget better: Plan expenses without worrying about unexpected costs.
Feel more confident: Reduce frustration and improve trust in online booking and ticketing platforms.

A recent FTC study revealed that when fees are disclosed only at the end of a transaction, consumers perceive the initial price as misleading and are more likely to feel they’ve been scammed. With upfront disclosure, these negative emotions are significantly reduced.

Will this rule increase prices?

Some critics argue that if companies are forced to show the full price upfront, they might simply increase base prices to appear “all-inclusive,” making tickets and rooms look more expensive.

However, proponents believe the opposite. Transparency puts pressure on businesses to lower prices or keep them competitive since customers can now see the full cost at a glance and choose the better deal.

In many cases, junk fees were used to make prices seem deceptively low to lure buyers in. By eliminating this tactic, consumers actually gain the upper hand.

Impact on businesses and the ticketing industry

Ticketing platforms like Ticketmaster and hotel chains have often relied on add-on fees as a significant revenue source. They argue these fees cover operational costs and venue maintenance.

With the new FTC junk fee disclosure rule, businesses will have to adjust how they present and justify fees. Companies might need to:

Revise advertising strategies: Focus on total price rather than low base prices.
Adjust revenue models: Find alternative ways to cover costs without relying on hidden fees.
Enhance customer communication: Clearly explain what each fee covers to avoid backlash.

While this could mean short-term operational challenges, in the long run, it might actually help brands build stronger relationships with their customers. Transparency is increasingly becoming a competitive advantage.

International comparisons: Are we catching up?

Many countries already require upfront price disclosure. For example:

European Union: Laws require all-inclusive pricing in most sectors, including travel and entertainment.
Australia: The Australian Consumer Law mandates that any advertised price must be the total price payable.
Canada: Airlines and many other service providers must show the full price, including taxes and fees, upfront.

The U.S. is now moving in line with global standards, which may help American consumers and businesses operating internationally.

Why didn’t businesses just show the full price before?

One reason companies avoided upfront disclosure was simple psychology: lower base prices attract more clicks and sales. Known as “drip pricing,” this strategy involves revealing additional fees gradually throughout the buying process. By the time consumers see the final cost, they feel committed and are more likely to complete the purchase anyway.

The FTC junk fee disclosure rule aims to end this manipulative tactic and give consumers real pricing power.

What happens if a company breaks the rule?

Under the new regulation, businesses that fail to comply can face:

Fines and penalties: The FTC can impose significant fines per violation.
Lawsuits: Both the FTC and state attorneys general can take legal action.
Reputational damage: News about non-compliance can spread quickly, harming brand trust and customer loyalty.

Enforcement will likely be strict initially, as the FTC wants to send a clear message. Companies are strongly advised to audit their pricing structures now to avoid penalties later.

What consumers should watch for

Even with new rules, consumers should remain vigilant. Here are a few tips:

Always look for the total price: Whether it’s a hotel booking or concert ticket, make sure the final price matches the advertised one.
Report violations: If you notice unexpected fees at checkout, report them to the FTC or local consumer protection agencies.
Check reviews: Other customers’ experiences often reveal if a business has a history of hidden fees.
Use price comparison tools carefully: Some websites might still show base prices initially — make sure you look at the final breakdown.

The future of transparent pricing

The FTC’s junk fee disclosure rule represents a major shift in U.S. consumer protection policy. It signals a broader trend towards greater transparency and honesty in pricing.

Consumers today demand clarity, simplicity, and fairness. In an age where online reviews can make or break a business, trust is one of the most valuable assets a brand can build.

Businesses that adapt quickly to this new rule — and even go beyond the minimum requirements — can turn compliance into a competitive advantage. Imagine a hotel proudly advertising “No hidden fees, ever,” or a concert ticketing site saying, “What you see is what you pay.” These messages resonate deeply with frustrated customers who have had enough of surprise charges.

Potential expansion to other sectors

While the current rule focuses on tickets and lodging, many experts believe similar requirements will soon reach other industries.

Possible future targets include:

Car rentals: Known for adding insurance and service fees late in the process.
Utility bills: Additional “service” or “maintenance” charges often appear unexpectedly.
Telecom services: Phone and internet providers are notorious for promotional rates that exclude fees.
Airlines: Although airlines already include taxes in fare ads, they still often tack on baggage and seat selection fees.

The move toward all-inclusive pricing might eventually become the norm across the entire U.S. marketplace.

Final thoughts: A win for consumers and honest businesses

The new FTC junk fee disclosure rule is a victory for consumers frustrated by surprise costs and deceptive marketing tactics. It gives people the power to make real comparisons and choices based on true prices, not marketing tricks.

At the same time, it rewards honest businesses that value transparency and fair competition. Companies that have always shown upfront pricing now find themselves at an advantage.

As we look ahead, one thing is clear: hidden fees are on their way out. Consumers can finally expect that the price they see is — at last — the price they pay.

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