Prohibition of Concealed Ticket Charges and Hidden Fees in Vacation Rentals Across America
Instead of customers getting slapped with "convenience" or "service" charges for booking hotels and attending concerts, the FTC declared that its new regulation will ensure pricing information is displayed transparently prior to any payment agreement.
"Consumers have the right to know exactly what they're expected to pay, without the fear of unexpected fees popping up later and squeezing their budgets," said FTC Chair Lina Khan in a press release announcing the regulation. "This regulation will put an end to sneaky charges associated with concert tickets, hotels, and vacation rentals, saving Americans billions of dollars and countless hours of frustration."
The regulation does not limit the costs that businesses can charge for their products or services. Instead, it requires companies to display the complete price, including all additional charges, in a more prominent manner compared to other pricing details.
The regulation secured bipartisan approval at the FTC. Andrew Ferguson, Trump's chosen replacement for Khan as FTC chair, was the sole opposer.
In a press release, Ferguson, currently serving as an FTC commissioner, stated that his decision to vote against the regulation had nothing to do with its validity, but rather his belief that the FTC under Biden's administration should no longer enforce new regulations after Trump's election victory.
"I oppose this regulation only because I believe the time for rulemaking by the Biden-Harris FTC has passed," Ferguson said. "This lame-duck Commission should take a well-deserved break from issuing new rules."
"My vote should not be interpreted as a criticism of the Final Rule or as a stance on whether the Commission under Trump should enforce the Final Rule," Ferguson added.
With the approval of the regulation, the FTC will have the authority to impose financial penalties on short-term rental and ticket booking companies that fail to disclose the full price to customers upfront. The regulation is set to come into effect 120 days after the announcement was made, following Biden's departure from office.
The regulation is part of a broader initiative by the FTC under Biden's administration to tackle hidden fees. Over the past three years, the FTC has taken action against companies like Invitation Homes and Vonage for charging consumers hidden fees.
Biden expressed his intention to tackle hidden fees in October 2023, during the FTC's unveiling of the regulation's initial proposal.
"People are fed up with being exploited and treated like fools," Biden said during a press conference in the Rose Garden at the time. "These sneaky fees can add hundreds of dollars to family budgets, making it harder to pay household bills."
In Tuesday's announcement, the FTC stated that the junk fees regulation could save consumers up to 53 million hours each year by eliminating the need to hunt for the total price of live-event tickets and short-term lodging, with the time savings estimated to be worth more than $11 billion over the next decade.
Businesses must now display the complete price, including all additional charges, more prominently than other pricing details due to the new regulation. This transparency is expected to help consumers avoid unexpected fees and save them billions of dollars.
