Understanding the FTC Rule on Unfair or Deceptive Fees
Learn how the FTC’s Rule on Unfair or Deceptive Fees changes pricing disclosure for tickets, travel, and other services.
Hidden add-ons and surprise charges – often called junk fees – can make it hard for people to understand what they will really pay for tickets, lodging, and many other services. The Federal Trade Commission’s Rule on Unfair or Deceptive Fees is designed to stop businesses from using misleading pricing tactics and to make total prices clear from the start.
This guide explains the Rule in plain language, what it requires from businesses, and how it helps you compare prices and avoid costly surprises.
1. Why the FTC Targeted Hidden and Deceptive Fees
The FTC is the United States’ primary consumer protection agency, charged with preventing unfair or deceptive practices in commerce. Over the past several years, the agency has focused specifically on pricing practices where:
- The advertised price is much lower than the amount people actually must pay.
- Mandatory fees are revealed late in the buying process, after consumers are invested in the purchase.
- Fees are described in confusing or misleading ways, such as labeling unavoidable charges as “taxes” or “government fees” when they are not.
According to FTC enforcement and policy work, these practices can:
- Distort competition by rewarding businesses that hide fees over those that are transparent.
- Make it difficult or impossible for consumers to comparison shop on real total price.
- Cause substantial financial harm, especially for people with limited budgets or fixed incomes.
The new Rule on Unfair or Deceptive Fees is one way the FTC uses its authority under Section 5 of the FTC Act, which prohibits unfair or deceptive acts or practices in or affecting commerce.
2. Core Goal of the Rule: Honest Total Prices Up Front
At its heart, the Rule requires businesses to show the real total price early and clearly in the buying process. It does not limit how much companies can charge or ban specific types of fees. Instead, it focuses on how prices are advertised, displayed, and explained.
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Broadly, the Rule aims to ensure that:
- Consumers see the full mandatory price – including required fees – whenever a price is advertised.
- Optional add-ons are clearly identified as optional and are not preselected or bundled in ways that mislead people.
- Descriptions of fees are accurate and not likely to give a false impression about who charges them or what they cover.
3. Who Must Follow the Rule?
The Rule applies to a range of businesses that advertise prices to consumers, with particular relevance for:
- Live-event ticket sellers and resellers – including primary ticket platforms, venues, promoters, and secondary marketplaces.
- Short-term lodging providers – such as hotels, motels, resorts, vacation rentals, and online platforms that list them.
- Other businesses that use similar pricing structures where fees are added on top of a base price.
These sectors were prioritized because the FTC and other agencies documented widespread use of hidden or misleading fees that made it difficult to know the true cost before completing a purchase.
4. What Counts as a Deceptive or Unfair Fee?
The Rule builds on the FTC’s longstanding standards for deception and unfairness. Under Section 5 of the FTC Act:
- A practice is deceptive if it involves a material representation, omission, or practice that is likely to mislead a reasonable consumer.
- A practice is unfair if it causes or is likely to cause substantial injury to consumers that is not reasonably avoidable and not outweighed by benefits to consumers or competition.
Applied to fees, this means businesses must avoid tactics such as:
- Advertising a low headline price while hiding required charges until the last step of checkout.
- Using labels like “service fee” or “processing fee” without making clear that they are mandatory and controlled by the business.
- Implying a fee is a government-imposed tax when it is actually an internally set charge.
5. Fees That Must Be Included in the Total Price
To stop bait-and-switch advertising, the Rule requires that certain charges be built into the total price displayed whenever consumers see or compare prices.
Mandatory charges that usually must be included in the total price include:
- Base price for access (ticket face value, nightly room rate, etc.).
- Mandatory service or convenience fees controlled by the seller.
- Required facility, resort, destination, or venue fees that consumers cannot opt out of.
Legitimate government-imposed taxes may be treated differently so long as they are accurately described and not used to disguise a business’s own charges. The Rule focuses on ensuring that any unavoidable charge set by the business is part of the up-front total shown to consumers.
Illustrative Comparison of Pricing Practices
| Practice | Likely Compliant | Likely Problematic |
|---|---|---|
| Displaying a price in search results | Total price including all mandatory fees, clearly identified | Base price only, with mandatory fees added at final checkout |
| Resort or facility fees | Included in the advertised nightly total | Disclosed only on last page, separated from “room rate” |
| Ticket service charges | Built into the first price consumers see for each ticket | Added after seat selection without clear prior notice |
6. Optional Add-Ons and Extras
The Rule recognizes that many businesses legitimately offer optional extras, upgrades, or services. These can remain separate from the total price if they are genuinely optional and presented clearly.
Examples of optional add-ons include:
- Trip insurance or ticket protection products.
- Seat upgrades, priority entry, or VIP packages.
- Parking, premium Wi-Fi, or late-checkout services that are not required for basic use.
To comply with the Rule, businesses should:
- Make clear which items are optional and which are required.
- Avoid pre-checking boxes or automatically adding extras into the cart.
- Display the cost of each add-on separately and transparently.
7. “Clear and Conspicuous” Price Disclosures
The Rule relies heavily on the concept of clear and conspicuous disclosure, a familiar standard in FTC advertising guidance. Under this standard, pricing information must be presented in a way that a reasonable consumer will notice, read, and understand it.
Characteristics of clear and conspicuous pricing disclosures typically include:
- Placement close to the price or call-to-action, not buried in footnotes or separate pages.
- Text that is readable, with sufficient size, contrast, and spacing.
- Language that is straightforward, avoiding technical jargon or misleading labels.
- Consistency across screens and devices, including mobile formats.
If a business relies on fine print or obscure links to reveal key price components, the FTC is likely to view that as deceptive even if the information technically appears somewhere on the page.
8. How the Rule Protects Consumers
The Rule on Unfair or Deceptive Fees is intended to make it easier for people to understand and control what they pay. According to the FTC’s consumer protection framework, transparency about total price can help people:
- Compare options accurately – By seeing the true total price earlier, consumers can choose the offer that really costs less, not just the one with the lowest advertised base rate.
- Avoid expensive surprises – Reducing last-minute add-ons lowers the risk of learning about major fees only after investing time and effort in the purchase.
- Plan and budget more effectively – Clear prices help families, older adults, and those on fixed incomes avoid overextending themselves.
The Rule also complements other FTC efforts to combat deceptive and unfair practices, including enforcement cases against companies that charge undisclosed add-ons or misrepresent mandatory fees.
9. How the Rule Supports Fair Competition
The FTC is also concerned with competition, not just individual transactions. When some businesses hide fees while others are honest about total price, the transparent businesses can appear more expensive in search results or ads, even when their real total prices are similar or lower.
By requiring more accurate price advertising, the Rule helps to:
- Level the playing field for companies that already disclose full prices.
- Discourage race-to-the-bottom strategies where firms compete by obscuring costs rather than by offering better value.
- Encourage innovation and service improvements instead of reliance on complex, confusing fee structures.
10. What Happens When Businesses Do Not Comply?
Violations of FTC rules can lead to significant consequences. When a rule is in place, the FTC may seek civil penalties and other remedies in federal court against companies that break it.
Potential outcomes of enforcement actions include:
- Civil penalties (monetary fines) for each violation of the Rule.
- Court orders requiring businesses to change their pricing and advertising practices.
- Monetary relief to consumers injured by deceptive or unfair practices, where allowed by law.
The existence of a clear rule also helps businesses understand what is expected and allows honest firms to design compliance programs that reduce legal risk.
11. Practical Tips for Consumers
While the Rule strengthens legal protections, consumers still benefit from staying alert when shopping for tickets, lodging, and other services. Consider these practical steps:
- Look for the total price early – If the first price you see does not clearly include all mandatory fees, keep clicking or tapping until you reach a final price before committing.
- Be cautious about preselected extras – Uncheck options you do not want and confirm the final total before paying.
- Compare like with like – When comparing offers from different providers, use the total price for the same dates, seats, or room types.
- Save or screenshot key price information – If something looks misleading, screenshots can help you explain the situation when contacting customer service or a regulator.
- Report suspicious practices – The FTC encourages consumers to report potential fraud or deceptive fees through its complaint tools.[10]
12. What Businesses Should Do to Comply
Companies covered by the Rule should review their pricing, marketing, and checkout flows to ensure they align with the new requirements and with existing FTC guidance on truth in advertising.
Key steps may include:
- Mapping all fees and charges to determine which are mandatory and which are truly optional.
- Updating ad copy, search result displays, and landing pages to show total prices, not just base rates.
- Revising user interfaces so that optional add-ons are not preselected or presented in misleading ways.
- Training marketing, product, and customer service staff on the Rule’s standards.
- Regularly reviewing FTC guidance documents and enforcement actions for emerging expectations.
13. Frequently Asked Questions (FAQs)
Q1: Does the Rule set a cap on fees or prices?
No. The Rule does not cap how much a business may charge. Instead, it focuses on transparency and requires that businesses accurately disclose the total price, including mandatory fees, up front.
Q2: Are all government taxes required to be included in the advertised total price?
The Rule distinguishes between government-imposed taxes and fees set by the business itself. Government charges may be displayed separately if accurately described, but mandatory business-controlled fees generally must be included in the total price shown to consumers.
Q3: Does the Rule apply to secondary ticket marketplaces?
Yes. The Rule is designed to cover both primary and secondary ticketing markets, so that consumers see the true total cost of a ticket regardless of where it is purchased.
Q4: How does this Rule fit with other FTC consumer protection efforts?
The Rule complements the FTC’s broader enforcement and policy work on unfair or deceptive practices, including actions against companies that use hidden add-ons, misleading advertising, or abusive billing practices.
Q5: What can I do if I think a company is violating the Rule?
Consumers can gather documentation, such as confirmation emails and screenshots of advertised prices, and submit a report to the FTC through its complaint and reporting portal.[10]
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
- A Brief Overview of the Federal Trade Commission’s Investigative, Law Enforcement, and Rulemaking Authority — Federal Trade Commission. 2025-07-01. https://www.ftc.gov/about-ftc/mission/enforcement-authority
- Protecting Consumers — Federal Trade Commission. 2025-04-15. https://www.ftc.gov/news-events/topics/truth-advertising/protecting-consumers
- Protecting Older Consumers 2024–2025: A Report of the Federal Trade Commission — Federal Trade Commission. 2025-12-01. https://www.ftc.gov/reports/protecting-older-consumers-2024-2025-report-federal-trade-commission
- Rules — Federal Trade Commission. 2025-03-20. https://www.ftc.gov/legal-library/browse/rules
- Consumer Protection — Federal Trade Commission. 2025-05-20. https://www.ftc.gov/consumer-protection
- Competition and Consumer Protection Guidance Documents — Federal Trade Commission. 2024-11-05. https://www.ftc.gov/enforcement/competition-consumer-protection-guidance-documents
- Business Guidance — Federal Trade Commission. 2024-09-30. https://www.ftc.gov/business-guidance
- File a Complaint — Federal Trade Commission. 2023-10-01. https://www.ftc.gov/media/71268
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