FTC bans hidden junk charges on tickets and short-term lodging purchases

I am unable to bear in mind a latest occasion during which the ultimate quantity I owed, whether or not it’s for a resort reservation or a live performance ticket, did not make my eyes bug out in shock. Now, a new rule from the Federal Trade Commission (FTC) ought to restrict these bait-and-switch pricing techniques. The FTC has introduced the Junk Charges Rule, requiring live-event ticketing and short-term lodging companies to be transparent concerning the whole worth owed. Different corporations will proceed to be monitored on a case-by-case foundation for misleading pricing.

The brand new rule, first proposed in 2023, ought to do away with all these further “resort” and “service” charges tacked on at checkout that always really feel arbitrary. Corporations can nonetheless technically embody them, however they should be factored into the preliminary worth proven. The required disclosure means the primary quantity you see on shows, commercials and the like also needs to be the entire quantity you pay.

The Junk Charges Rule additionally requires companies to show that remaining quantity “extra prominently” than some other data. So, it will possibly’t say it can value one factor in large font after which in actually small print add that there is loads of charges on high of it. “Individuals need to know up-front what they’re being requested to pay — with out worrying that they’ll later be saddled with mysterious charges that they haven’t budgeted for and may’t keep away from,” mentioned FTC Chair Lina M. Khan. “I urge enforcers to proceed cracking down on these illegal charges and encourage state and federal policymakers to construct on this success with laws that bans unfair and misleading junk charges throughout the financial system.”

The FTC claims the Junk Price Rule will save people as much as an estimated 53 million hours every year and greater than $11 billion over the following decade. The rule will go into impact 120 days after it is printed within the Federal Registrar.