Understanding the FTC Rule on Unfair or Deceptive Fees
Learn how the FTC’s Unfair or Deceptive Fees Rule promotes honest pricing for tickets and lodging and what it means for you.
The Federal Trade Commission’s Rule on Unfair or Deceptive Fees is designed to stop businesses from hiding the real cost of what they sell, especially for live-event tickets and short-term lodging. It requires companies to be upfront about the total price so people can compare offers and avoid surprise charges at checkout.
Why the FTC Targeted Hidden and “Junk” Fees
For years, many sellers have used hidden or late-disclosed fees to make prices look lower than they really are. These practices can mislead shoppers and make it harder for honest businesses to compete on price. The FTC, whose mission is to prevent unfair or deceptive practices in commerce, created this rule to promote transparency and fairness in key markets.
- Consumers benefit from knowing the full price before they spend time comparing options.
- Honest businesses benefit when competitors can no longer rely on misleading price tactics.
- Markets function better when prices are accurate and comparable.
Under the FTC Act, it is unlawful for businesses to engage in unfair or deceptive acts or practices in commerce. Misrepresenting or obscuring the price of a product or service can fall into that category, particularly when the deception is likely to affect a consumer’s purchasing decision.
Where the Rule Applies: Covered Industries and Transactions
The Rule on Unfair or Deceptive Fees focuses on two major areas where hidden fees are common.
Live-Event Tickets
The rule covers businesses that advertise, sell, or display prices for tickets to live events, including:
- Concerts and music festivals
- Sports events at professional or amateur venues
- Theater productions and performing arts shows
- Other in-person entertainment events where tickets are required
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It applies not only to primary ticket sellers but also to intermediaries such as online marketplaces and secondary ticket resellers.
Short-Term Lodging
The rule also applies to short-term lodging, such as:
- Hotels and motels
- Resorts
- Vacation rentals and home-sharing stays
- Bed-and-breakfasts and similar accommodations
Any business that offers or advertises short-term stays for a fee is expected to follow the rule’s pricing disclosure requirements, whether the offer appears on their own website, an app, a travel platform, or in offline materials.
Business and Individual Customers
The rule protects both individual consumers and business customers. If a business buys blocks of tickets or books rooms for employees, it is still entitled to clear, upfront pricing for covered products and services.
Core Requirement: Show the True Total Price Upfront
At the heart of the rule is a simple expectation: when a price is shown, it must reflect the total amount the customer will be required to pay for the covered good or service, with limited exceptions.
What Must Be Included in the Total Price
The “total price” must include all charges the seller knows about and can calculate in advance, such as:
- Base ticket or nightly room rate
- Mandatory service or booking fees
- Required facility or resort fees
- Platform or marketplace fees that are passed on to the buyer
- Any other non-optional charges tied to the same transaction
These charges must be part of the first meaningful price the customer sees when shopping—not hidden until the final checkout screen or disclosed only in fine print.
What Can Be Left Out of the Total Price
Certain costs may be excluded from the initial total price, such as:
- Taxes or government-imposed fees that vary and cannot be calculated at the time of display
- Optional add-ons that the customer is free to accept or decline
Even when excluded, these costs must not be used to mislead people about the true cost. Any additional amounts should be clearly described before a customer commits to the purchase.
Optional Add-Ons vs. Mandatory Fees
The rule draws a clear line between what is optional and what is mandatory.
| Type of Charge | Example | Included in Total Price? |
|---|---|---|
| Mandatory fee | Required facility fee on a concert ticket | Yes, must be included in upfront price |
| Marketplace fee passed to buyer | Required platform charge for booking | Yes, if it is required and known in advance |
| Optional add-on | Parking upgrade or VIP access | No, but must be clearly disclosed if selected |
| Government tax | Local lodging tax based on final amount | May be shown separately, but not hidden |
Responsibilities of Online Marketplaces and Intermediaries
In digital markets, pricing information often passes through multiple parties. The rule assigns responsibilities both to sellers and to platforms that host or display listings.
Obligations of Sellers Using a Platform
Businesses that list tickets or lodging on an online marketplace must:
- Provide the platform with accurate price information for each item or listing.
- Include mandatory fees and charges in the amounts they give to the platform.
- Promptly update pricing if required fees change.
Obligations of Marketplaces and Other Intermediaries
Marketplaces, travel agencies, and similar intermediaries that display or advertise prices must:
- Give sellers the information they need to calculate the total price, including any platform-imposed fees passed on to customers.
- Present the total price clearly in their own interfaces and advertising.
- Avoid designs or disclosures that obscure mandatory charges.
The FTC has emphasized that intermediaries in the secondary ticketing market are covered by the rule and must follow these transparency requirements.
What “Clear and Conspicuous” Disclosure Means
The rule requires that pricing and key fee information be disclosed clearly and conspicuously—a standard that appears in many FTC rules and guidance documents.
In practical terms, that means:
- Important price details must not be buried in fine print or hidden behind multiple clicks.
- Disclosures should be in plain language, close to the claim they qualify, and in a font, color, and placement that people are likely to notice.
- On mobile devices, critical price information must be visible without scrolling far or opening multiple screens.
Under the FTC Act, it can be deceptive to make a truthful statement in a way that misleads people about the overall cost or nature of a transaction. Making fees technically available but practically hidden may still violate the law.
Examples of Practices the Rule Seeks to Prevent
Although every situation is fact-specific, the rule targets several common pricing tactics in tickets and lodging.
- Bait-and-switch pricing: Advertising a low price but revealing large required fees only at the end of the checkout process.
- Drip pricing: Adding multiple mandatory charges one by one as the customer moves through screens, so the final price is far higher than the starting price.
- Mislabeling mandatory fees as optional: Suggesting that a required fee is an optional upgrade or convenience when it is not.
- Obscured platform fees: Passing along a marketplace or service fee to the customer without including it in the quoted total price.
These practices can be deceptive because they alter a consumer’s understanding of the offer and can influence whether and how they decide to buy.
Consequences for Violating the Rule
Businesses that break FTC trade regulation rules, including the Rule on Unfair or Deceptive Fees, can face serious legal and financial consequences.
- Court orders requiring the business to stop the unlawful conduct and bring practices into compliance.
- Monetary relief for consumers, which can include refunds or other forms of redress.
- Civil penalties for violating an FTC rule or a prior order, which can be substantial depending on the nature and duration of the conduct.
The FTC can pursue enforcement administratively or in court, and in some cases may coordinate with other agencies or law enforcement partners.
How Consumers Can Use the Rule
Although the rule directly applies to businesses, it also gives consumers tools for better decision-making when shopping for tickets and lodging.
Comparing Prices More Effectively
Because total prices must be disclosed at the outset, people can:
- Compare different sellers based on the true cost, not just a teaser rate.
- Avoid wasting time on offers that will become too expensive once hidden fees appear.
- Spot outliers where fees still appear late or are inconsistent with the rule.
Recognizing Warning Signs
Red flags that might suggest a business is not complying include:
- Substantial, unexplained increases between the first price shown and the final checkout amount.
- Mandatory fees labeled as “recommended” or “standard” add-ons that you cannot remove.
- Important price terms that only appear in dense fine print or after multiple clicks.
Reporting Suspected Violations
If a consumer believes a business is using unfair or deceptive fees, they can report it directly to the FTC through its official complaint portal.[10] Consumer reports help the FTC identify patterns, prioritize enforcement, and seek relief for those harmed.[10]
Compliance Tips for Businesses
Businesses that sell live-event tickets or short-term lodging should review their pricing systems, advertising, and online interfaces to ensure compliance with the rule and the FTC Act.
- Audit all prices and fees: Map every charge a customer may pay, identify which are mandatory, and ensure they are included in the first displayed total price.
- Coordinate with partners: Work with marketplaces, third-party booking sites, and resellers so everyone uses accurate, consistent total pricing.
- Update disclosures and marketing: Remove claims that could mislead people about the cost or nature of fees, and revise fine print that conflicts with prominent pricing statements.
- Test on mobile and desktop: Verify that clear, conspicuous pricing is provided across devices and that critical information is not hidden by design choices.
- Train staff and agents: Ensure employees who set prices, draft ads, or design interfaces understand the rule’s requirements and the FTC’s broader standards for deception and unfairness.
Frequently Asked Questions (FAQs)
Q1: Does the rule limit how high fees can be?
No. The rule does not set caps on the size of fees or ban particular types of charges. Instead, it requires that mandatory fees be included in the upfront total price and not misrepresented. Other laws, such as state consumer protection statutes or competition laws, may also apply depending on the situation.
Q2: Does the rule apply only to online sales?
No. The rule covers offers, displays, and advertisements regardless of the medium—online, via apps, in print, or at physical locations. Any business that communicates prices for covered tickets or lodging must comply.
Q3: Are business-to-business purchases covered?
Yes. The rule protects both individual consumers and business purchasers, so companies buying tickets or booking accommodations are entitled to transparent pricing as well.
Q4: What should a business do if a platform sets part of the price?
If a marketplace or platform charges a mandatory fee that is passed on to the buyer, the platform must provide accurate information so the seller can include it in the total price. Both the platform and the seller share responsibility for ensuring that the price shown to the customer is complete and truthful.
Q5: How can consumers file a complaint about hidden or misleading fees?
Consumers can submit complaints directly to the FTC through its official online complaint system.[10] Reports about suspicious pricing practices in ticketing or lodging help the FTC investigate potential violations and, when appropriate, pursue enforcement actions to stop misconduct and secure relief for affected people.[10]
References
- 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
- A Brief Overview of the Federal Trade Commission’s Investigative, Law Enforcement, and Litigation Authority — Federal Trade Commission. 2025-07-01. https://www.ftc.gov/about-ftc/mission/enforcement-authority
- Bureau of Consumer Protection — Federal Trade Commission. 2024-12-01. https://www.ftc.gov/about-ftc/bureaus-offices/bureau-consumer-protection
- 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
- Rules — Federal Trade Commission. 2024-10-01. https://www.ftc.gov/legal-library/browse/rules
- Consumer Protection — Federal Trade Commission. 2025-05-20. https://www.ftc.gov/consumer-protection
- File A Complaint — Federal Trade Commission. 2024-03-01. https://www.ftc.gov/media/71268
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