Understanding the FTC Rule on Unfair or Deceptive Fees
A clear, practical guide to the FTC’s rule on unfair or deceptive fees for tickets and short-term lodging.
FTC Crackdown on Hidden Fees: What the New Rule Means
The Federal Trade Commission (FTC) has adopted a Rule on Unfair or Deceptive Fees that targets hidden and misleading charges in two major areas: live-event tickets and short-term lodging like vacation rentals and hotel stays. The rule is designed to stop bait-and-switch pricing and to make sure people see the real total price up front before they decide to buy.
This guide explains, in plain language, how the rule works, who must comply, and how both consumers and businesses can navigate the new requirements.
Why the FTC Targeted Hidden Fees
For years, consumers have complained about fees that only appear at the last step of checkout, making it hard to compare prices or know the true cost of a ticket or lodging stay. These practices can:
- Distort competition by allowing some businesses to appear cheaper than they are.
- Trap people in transactions after they have invested time and effort in the purchase process.
- Undermine trust in online marketplaces and ticketing platforms.
The FTC’s Bureau of Consumer Protection is responsible for combating unfair or deceptive practices and uses rulemaking, enforcement, and education to protect the public. The new rule is part of that broader effort to create a fair, transparent marketplace.
Scope of the Rule: Who and What It Covers
The Rule on Unfair or Deceptive Fees focuses on two categories where hidden fees are especially common.
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- Live-event tickets – Tickets for concerts, sports, theater, festivals, and similar in-person events, including primary and secondary (resale) markets.
- Short-term lodging – Hotel rooms, vacation rentals, short-term rental units, and comparable lodging that is offered for short stays.
The rule applies to businesses that:
- Advertise or display prices for covered tickets or lodging; and/or
- Sell or resell those products directly or through online marketplaces.
Online marketplaces and intermediaries—such as ticket platforms and lodging platforms—have their own obligations under the rule to ensure the prices they show people include all mandatory fees known at the time.
Core Requirement: Show the Total Price Up Front
The central requirement of the rule is simple: when a business advertises or quotes a price, it must disclose the total price up front before the consumer commits.
The total price must include:
- All mandatory fees and charges the business knows about and can calculate at the time of the offer.
- Charges for goods or services the consumer cannot avoid if they want to complete the transaction (for example, mandatory service fees tied to the ticket).
Some fees may be excluded from this total price under the rule, such as certain government taxes, if they meet specific conditions and are clearly disclosed. But businesses cannot withhold mandatory, known charges until later in the purchase process.
Clear and Conspicuous Presentation
The total price must not be buried or overshadowed. The FTC expects pricing information to be presented clearly and conspicuously, meaning it is:
- Easy to notice – not hidden in small text or hard-to-find links.
- Easy to understand – not obscured by jargon or complicated formulas.
- Shown early – before the consumer is locked into the purchase.
Mandatory vs. Optional Fees: Understanding the Difference
The rule draws a line between mandatory charges that must be included in the total price and optional add-ons that can be listed separately, as long as they are not misleading.
| Type of Charge | How the Rule Treats It | Example (Illustrative) |
|---|---|---|
| Mandatory fee (known, unavoidable) | Must be included in the total advertised price. | A required venue fee that is charged on every ticket. |
| Mandatory platform fee | Must be part of the total price if known and calculable at the time of offer. | A required service fee charged for each booking. |
| Government-imposed tax (certain cases) | May be excluded from the total price if the rule’s conditions are met, but must be clearly disclosed. | Sales tax or occupancy tax that varies by jurisdiction. |
| Optional add-on | May be listed separately if truly optional and not misrepresented. | Extra insurance, parking, or a VIP upgrade. |
Obligations for Online Marketplaces and Intermediaries
Online marketplaces play a central role in how people find tickets and lodging. The FTC rule acknowledges this by imposing special responsibilities on intermediaries.
- Providing accurate fee information – Marketplaces that charge their own mandatory fees and allow sellers to pass those fees on to consumers must give sellers accurate details so sellers can include them in the total price.
- Displaying total price – Marketplaces responsible for presenting prices must ensure that the total price, including mandatory fees known at the time, is what consumers see in ads, search results, and checkout flows.
- Secondary ticket markets – The requirements apply to resellers and secondary marketplaces as well, not just original sellers.
Examples of Practices That May Violate the Rule
The FTC’s guidance explains that certain practices can be considered unfair or deceptive under the rule.
- Bait-and-switch pricing – Advertising a low price and then adding mandatory fees late in the checkout process so that the final price is much higher.
- Omitting known mandatory fees – Failing to include required fees in the total price when the business knows them and can calculate them in advance.
- Mislabeling fees – Presenting a mandatory charge as if it were a government tax or optional add-on when it is not, which can mislead consumers about who is imposing the fee.
- Unclear fee descriptions – Using vague names for charges that obscure their purpose or make it difficult to tell whether they are avoidable.
These tactics can trigger enforcement actions because they undermine people’s ability to compare prices and make informed choices.
Benefits for Consumers
For the public, the rule is intended to make pricing more honest and easier to understand.
- Better price comparison – Seeing the true total price from the start allows people to compare tickets or lodging options more accurately.
- Fewer unpleasant surprises – Reduced risk of discovering large fees only after spending time on the checkout process.
- Stronger marketplace trust – Clear rules and active enforcement by the FTC’s Bureau of Consumer Protection help create a more predictable, fair environment.
What Businesses Should Do to Comply
Businesses that sell, advertise, or facilitate tickets or short-term lodging should review their current practices and make adjustments to comply with the rule’s requirements.
1. Audit Pricing and Checkout Flows
- Identify all mandatory fees and charges related to tickets or lodging.
- Confirm which fees are known and can be calculated at the time of the initial offer.
- Ensure these fees are included in the total price displayed in advertisements and on product listings.
2. Coordinate with Marketplaces and Partners
- Share accurate information about any fees you charge that are passed on to consumers.
- Verify that marketplaces and resellers present the total price in a way that aligns with FTC requirements.
3. Update Disclosures and Labels
- Use straightforward language to describe fees, avoiding labels that suggest they are government-imposed when they are not.
- Separate truly optional add-ons from mandatory charges and clearly explain that they are optional.
4. Train Staff and Build Compliance into Systems
- Educate marketing, product, and legal teams about the rule’s requirements.
- Incorporate compliance checks into product design and pricing tools so that total prices remain accurate even as fees or business models change.
Enforcement and Consequences of Non-Compliance
The FTC has authority to enforce its rules through investigations, administrative actions, and court cases. When companies violate consumer protection rules, the FTC can seek remedies such as:
- Orders requiring businesses to stop unlawful conduct.
- Monetary relief, including refunds in some cases.
- Penalties or other sanctions, depending on the circumstances and applicable statutes.
Because the rule focuses on unfair or deceptive fee practices, businesses that rely on hidden or misleading fees face heightened regulatory risk once the rule is in effect.
Practical Tips for Consumers
While the rule places the primary burden on businesses, consumers can take practical steps to protect themselves and take advantage of the new transparency.
- Look for the total price – Check the full amount presented early in the process, not just the initial per-ticket or nightly rate.
- Compare similar offers – Use the total price to compare across different platforms or sellers rather than focusing on base prices alone.
- Watch how fees are labeled – Be cautious if charges are described in vague terms or if it is unclear whether they are mandatory.
- Report concerns – If you believe a business is hiding mandatory fees or misrepresenting prices, you can report it to the FTC’s consumer complaint system.
Frequently Asked Questions (FAQs)
Q1: Does the rule ban all fees?
No. The rule does not prohibit businesses from charging fees or using specific pricing strategies. Instead, it requires that the total price—including all mandatory, known, and calculable fees—be disclosed up front whenever prices are advertised or offered.
Q2: Are optional add-ons still allowed?
Yes. Businesses can still offer optional add-ons such as upgrades or additional services. However, these must be accurately described as optional, and they cannot be presented in a way that confuses people about the true total price or the mandatory nature of certain charges.
Q3: How does this affect secondary ticket sellers?
Secondary ticket sellers and marketplaces that resell tickets are covered when they advertise or display prices. They must ensure that the total price shown to consumers includes all mandatory fees known at the time of the offer, just like primary sellers.
Q4: What should a business do if a fee depends on factors not known in advance?
If a mandatory fee cannot reasonably be calculated at the time of the initial offer, businesses should follow the FTC’s guidance on how to disclose such charges clearly and honestly, making sure people understand that additional amounts may apply and how those amounts are determined.
Q5: Where can businesses find official compliance guidance?
The FTC publishes official rules, FAQs, and small-entity compliance guides on its website, including detailed explanations of the Rule on Unfair or Deceptive Fees and other consumer protection regulations.
References
- FTC Rule on Unfair or Deceptive Fees to Take Effect on May 12, 2025 — Federal Trade Commission. 2025-05-09. https://www.ftc.gov/news-events/news/press-releases/2025/05/ftc-rule-unfair-or-deceptive-fees-take-effect-may-12-2025
- The Rule on Unfair or Deceptive Fees: Frequently Asked Questions — Federal Trade Commission. 2025-05-09. https://www.ftc.gov/business-guidance/resources/rule-unfair-or-deceptive-fees-frequently-asked-questions
- Bureau of Consumer Protection — Federal Trade Commission. 2024-12-01 (updated, approximate). https://www.ftc.gov/about-ftc/bureaus-offices/bureau-consumer-protection
- Rules — Federal Trade Commission. 2024-11-01 (updated, approximate). https://www.ftc.gov/legal-library/browse/rules
- Consumer Protection — Federal Trade Commission. 2025-05-20 (updated, approximate). https://www.ftc.gov/consumer-protection
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