On December 17, the Federal Trade Commission (FTC) announced the release of its final Rule on Unfair or Deceptive Fees, also known as the “Junk Fee Rule”, which aims to address so-called bait-and-switch pricing tactics and other deceptive practices in the live-event ticketing and short-term lodging industries. This rule, codified at 16 CFR Part 464, specifically targets practices that purportedly hide the total price of an item or service and misrepresent fees and will go into effect 120 days after publication in the Federal Register.

The final rule mandates that businesses clearly and conspicuously disclose the total price, inclusive of all mandatory fees, whenever they offer, display, or advertise any price for live-event tickets or short-term lodging. This requirement is intended to ensure that consumers are fully informed about the total cost upfront, thereby facilitating more straightforward comparison shopping and reducing the likelihood of unexpected charges. According to the FTC, “[c]onsumers searching for hotels or vacation rentals or seats at a show or sporting event will no longer be surprised by a pile of ‘resort,’ ‘convenience,’ or ‘service’ fees inflating the advertised price.”

Notably, the rule is much more streamlined than the initial proposal put forth by the FTC. In the final rule, the definition of “Covered Good or Service” includes only live-event tickets and short-term lodging, including hotels, inns, and short-term or vacation rentals. The final rule does not prohibit any specific type or amount of fee, nor does it restrict any particular pricing strategies. Instead, it requires that businesses provide truthful and transparent pricing information. This means that while businesses can still itemize and break down fees, the most prominent price displayed must be the all-inclusive total price. Additionally, any fees that are excluded from the advertised price, such as shipping or taxes, must be clearly disclosed before the consumer consents to pay.

For businesses, compliance with the Junk Fee Rule will require adjustments to advertising and pricing strategies to ensure that all mandatory fees are disclosed upfront and that the total price is prominently displayed.