Understanding the FTC Rule on Unfair or Deceptive Fees

The Federal Trade Commission (FTC) has adopted a rule targeting unfair or deceptive fees, sometimes called junk fees, in the live-event ticketing and short-term lodging industries. This rule is designed to make prices clearer, stop bait-and-switch tactics, and help honest businesses compete fairly.

Why the FTC Targeted Unfair and Deceptive Fees

For years, many people have encountered low advertised prices that jump dramatically at checkout once mandatory fees are added. These extra charges often appear late in the process, making it hard to compare options or know what something truly costs. According to the FTC, these tactics distort competition and mislead consumers about the real price they will pay.

Price transparency has been a growing policy priority at the federal level. The FTC and other agencies have documented how hidden or surprise fees can raise costs and waste time for households, especially when they have to restart a purchase after discovering unexpected charges.

Industries Covered by the Rule

The rule does not apply to every market. Instead, it focuses on two specific types of transactions where junk fee problems have been especially common.

• Live-event tickets – Tickets to concerts, sports, theater, festivals, and similar events, whether sold by primary sellers or resale platforms.
• Short-term lodging – Stays in hotels, motels, inns, vacation rentals, and other short-term accommodations, including bookings made through online travel agencies or marketplace platforms.

The rule also reaches beyond just direct sellers. It covers:

• Third-party ticket platforms and marketplaces
• Travel agents and booking sites
• Resellers and intermediaries that advertise or display prices

Importantly, both individual consumers and business customers are protected. Business-to-business purchases of covered tickets or lodging must also comply with the rule’s pricing requirements.

Core Requirement: Show the Real Price Upfront

The heart of the rule is simple: if a business advertises or displays a price for live-event tickets or short-term lodging, that price must reflect the total amount a person is required to pay, with very limited exceptions.

This is often described as an “all-in” or “total” price requirement. Under the rule, the total price must:

• Include all mandatory fees and charges the business can calculate in advance
• Be displayed prominently any time a price is shown, including in online search results, mobile apps, and printed ads
• Remain visible through the purchase process, not hidden or replaced by partial prices later

What Must Be Included in the Total Price?

Businesses must fold into the upfront total any cost that a buyer has to pay as part of the same transaction and that can be known in advance. Examples include:

• Required “service” or “convenience” fees on tickets
• Mandatory booking or processing charges
• Required resort, destination, or facility fees for lodging
• Platform or marketplace access fees passed on to the consumer

The goal is that when a consumer sees a price, they are seeing what they would actually have to pay, not just a starting number that will increase significantly at the last step.

What Can Be Excluded from the Total Price?

The rule allows certain limited exclusions, such as:

• Taxes or government fees that vary by location or are displayed separately in a clear manner, when permitted
• Optional add-ons that the consumer can choose to accept or decline, as long as they are not required to complete the purchase

However, charges cannot be treated as “optional” if a person must pay them to use the ticket or lodging, or if declining them is practically impossible.

Optional Add-ons and Extras

Many ticketing and lodging businesses offer extra services — such as upgraded seating, trip protection, early check-in, or parking. The rule does not prohibit these products, but it does require honest presentation.

For optional add-ons, businesses must:

• Clearly identify them as optional
• Avoid pre-checked boxes or designs that steer people into buying extras they did not choose
• Show the additional cost for each optional service in a way that is easy to see and understand

Where businesses use “bundles” that combine mandatory elements with truly optional extras, they should take care that people can still understand what is required versus what is elective.

How the Rule Applies to Online Marketplaces

Online platforms — including marketplaces, reseller sites, and travel portals — play a key role in how prices are displayed. The FTC rule assigns responsibilities both to the businesses listing their offers and to the platforms that host those listings.

Because multiple parties may have a role in setting fees, the rule expects cooperation. Platforms and sellers need to share accurate information so that the total price shown to the consumer is complete and truthful.

What Counts as a Misleading Fee Practice?

The rule provides examples and principles to help businesses understand what would likely be considered unfair or deceptive. While the specifics can vary, practices with the following traits are at high risk:

• Advertising a low headline price and revealing major mandatory fees only at the final checkout screen
• Describing unavoidable charges as if they were government-imposed when they are actually business-imposed
• Displaying prices in search results that omit mandatory platform or resort fees
• Using fine print or vague labels (for example, “other charges may apply”) instead of clearly stating the actual total

The FTC has long treated material misrepresentations or omissions about cost as deceptive under Section 5 of the FTC Act, and this rule builds on that foundation by specifying how price disclosures must work in these industries.

How Businesses Can Comply

The rule does not ban particular business models or cap the level of fees. Instead, it demands transparent, accurate disclosure. Businesses covered by the rule should take several concrete steps.

Review and Redesign Pricing Displays

• Audit all places where prices appear: homepages, search results, filters, event pages, property pages, mobile apps, and email offers.
• Ensure the total price (with all mandatory fees included) is the most prominent number wherever a price is shown.
• Remove or revise designs that only reveal mandatory fees late in the purchasing flow.

Map and Classify All Fees

• List every fee associated with ticket or lodging sales, including third-party charges.
• Classify each fee as:

• Mandatory and knowable upfront – must be included in the total price.
• Optional add-on – may be listed separately but must be clearly presented as optional.
• Government-imposed tax or regulatory fee – may be shown separately when permitted, but must not be falsely labeled.

Coordinate With Partners and Platforms

• Update contracts with marketplaces and intermediaries to ensure accurate fee-sharing information.
• Provide timely notice to partners whenever fees change so that prices shown to consumers remain accurate.
• Implement technical processes (such as APIs or data feeds) that transmit current fee data to platforms.

Train Staff and Monitor Compliance

• Train marketing, product, and sales teams on the rule’s requirements and the meaning of “total price.”
• Establish internal review procedures for new promotions or website changes involving prices.
• Monitor consumer feedback and complaints for signs of confusion or recurring pricing issues.

Consumer Benefits: What This Means for You

From a consumer perspective, the rule aims to make price comparisons easier and reduce unpleasant surprises at checkout. With upfront total prices:

• You can better compare options across venues, dates, or properties without clicking all the way through.
• You are less likely to waste time starting purchases that later become unaffordable once fees appear.
• You gain a clearer sense of whether a fee reflects a real government charge or a business-imposed surcharge.

The FTC has reported that older adults, in particular, can be significantly harmed by confusing and deceptive practices, including misleading price claims and hidden charges in various markets. Clear total prices help all age groups, including those who may be more vulnerable to scams or complex online flows.

Enforcement and Consequences

The FTC can enforce violations of the rule using its authority under the FTC Act. When it finds that a business has used unfair or deceptive fee practices that violate the rule, potential consequences can include:

• Injunctions requiring the business to change its pricing and disclosure practices
• Monetary relief, such as refunds or disgorgement, where available
• Civil penalties for rule violations, subject to statutory limits

The agency has a history of using a mix of case-by-case enforcement and broader rules to address deceptive pricing. The unfair or deceptive fees rule fits alongside other FTC rules and guidance that target misleading advertising, deceptive business practices, and unfair competition.

Practical Tips for Consumers

Even with the rule in place, it is wise to take a few extra steps when purchasing tickets or booking lodging:

• Look for the total price early. Reputable sites should show a main total that includes required fees, not just a base rate.
• Check for optional add-ons. Review whether travel protection, parking, or other extras have been added and remove them if you do not want them.
• Save records. Keep screenshots or confirmation emails that show the price you agreed to pay.
• Report problems. If you believe a business used hidden fees or misleading price displays, you can report it to the FTC.

Common Misunderstandings About the Rule

Because the rule focuses on transparency rather than price controls, some common misunderstandings arise. Here are a few clarifications:

• The rule does not ban fees altogether. Businesses may still charge for services, but they must present those charges truthfully and upfront.
• The rule is not limited to websites. It also applies to mobile apps, physical outlets, and other ways prices are advertised or displayed.
• The rule governs certain industries, not all markets. Other sectors may still be subject to the FTC Act and state laws, but they are outside this specific rule.
• The rule allows flexibility in pricing strategies. Companies can continue using dynamic pricing, discounts, or bundles, as long as they provide accurate total prices.

Frequently Asked Questions (FAQs)

Q1: Does this rule cap how much businesses can charge in fees?

No. The rule does not set price caps or limit the amount of fees. Instead, it requires that mandatory fees be included in the upfront total price and that pricing information not be misleading.

Q2: Are all types of tickets covered, including resale tickets?

Yes. The rule applies to live-event tickets generally, including those sold on primary platforms and those resold through secondary marketplaces, as long as the offers fall within the covered categories.

Q3: How will I know if a fee is truly optional?

A fee is optional if you can complete the purchase and use the ticket or lodging without paying it. It should be clearly labeled as optional, and you should be able to opt out without unreasonable obstacles or confusion.

Q4: Do taxes have to be included in the total price?

The rule allows certain taxes and government-imposed fees to be shown separately when permitted, but they must be presented accurately. Businesses may not mislabel their own surcharges as government fees.

Q5: What should I do if I think a business violated the rule?

You can report suspected violations to the FTC through its official complaint channels. Include as much detail as possible, such as screenshots, confirmation emails, and a description of how the price changed during checkout.

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Sneha TeteBeauty & Lifestyle Writer

 

Sneha is a relationships and lifestyle writer with a strong foundation in applied linguistics and certified training in relationship coaching. She brings over five years of writing experience to waytolegal,  crafting thoughtful, research-driven content that empowers readers to build healthier relationships, boost emotional well-being, and embrace holistic living.

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