FTC bans hidden junk fees on tickets and short-term lodging purchases
I can't remember a recent instance in which the final amount I owed, whether it be for a hotel reservation or a concert ticket, didn't make my eyes bug out in shock. Now, a new rule from the Federal Trade Commission (FTC) should limit these bait-and-switch pricing tactics. The FTC has announced the Junk Fees Rule, requiring live-event ticketing and short-term lodging businesses to be transparent about the total price owed. Other companies will continue to be monitored on a case-by-case basis for deceptive pricing. The new rule, first proposed in 2023, should get rid of all those extra "resort" and "service" fees tacked on at checkout that often feel arbitrary. Companies can still technically include them, but they must be factored into the initial price shown. The required disclosure means the first amount you see on displays, advertisements and the like should also be the total amount you pay. The Junk Fees Rule also requires businesses to display that final amount "more prominently" than any other information. So, it can't say it will cost one thing in big font and then in really small print add that there's a lot of fees on top of it. “People deserve to know up-front what they’re being asked to pay — without worrying that they’ll later be saddled with mysterious fees that they haven’t budgeted for and can’t avoid,” said FTC Chair Lina M. Khan. "I urge enforcers to continue cracking down on these unlawful fees and encourage state and federal policymakers to build on this success with legislation that bans unfair and deceptive junk fees across the economy.” The FTC claims the Junk Fee Rule will save individuals up to an estimated 53 million hours each year and more than $11 billion over the next decade. The rule will go into effect 120 days after it's published in the Federal Registrar. This article originally appeared on Engadget at https://www.engadget.com/big-tech/ftc-bans-hidden-junk-fees-on-tickets-and-short-term-lodging-purchases-160702790.html?src=rss
I can't remember a recent instance in which the final amount I owed, whether it be for a hotel reservation or a concert ticket, didn't make my eyes bug out in shock. Now, a new rule from the Federal Trade Commission (FTC) should limit these bait-and-switch pricing tactics. The FTC has announced the Junk Fees Rule, requiring live-event ticketing and short-term lodging businesses to be transparent about the total price owed. Other companies will continue to be monitored on a case-by-case basis for deceptive pricing.
The new rule, first proposed in 2023, should get rid of all those extra "resort" and "service" fees tacked on at checkout that often feel arbitrary. Companies can still technically include them, but they must be factored into the initial price shown. The required disclosure means the first amount you see on displays, advertisements and the like should also be the total amount you pay.
The Junk Fees Rule also requires businesses to display that final amount "more prominently" than any other information. So, it can't say it will cost one thing in big font and then in really small print add that there's a lot of fees on top of it. “People deserve to know up-front what they’re being asked to pay — without worrying that they’ll later be saddled with mysterious fees that they haven’t budgeted for and can’t avoid,” said FTC Chair Lina M. Khan. "I urge enforcers to continue cracking down on these unlawful fees and encourage state and federal policymakers to build on this success with legislation that bans unfair and deceptive junk fees across the economy.”
The FTC claims the Junk Fee Rule will save individuals up to an estimated 53 million hours each year and more than $11 billion over the next decade. The rule will go into effect 120 days after it's published in the Federal Registrar. This article originally appeared on Engadget at https://www.engadget.com/big-tech/ftc-bans-hidden-junk-fees-on-tickets-and-short-term-lodging-purchases-160702790.html?src=rss
What's Your Reaction?
