FTC Bans Hidden Fees from Hotel and Concert Apps & Websites
Hotel and Event Apps & Websites Banned From Using Hidden Fees The Federal Trade Commission (FTC) has announced a new rule that bans apps and websites in the hotel and event industries from using hidden fees for bait-and-switch pricing. The agency discovered that it was common practice for companies to show misleading prices, which were then inflated by hidden costs like booking and resort fees only revealed during checkout.
Companies will not be banned from applying junk fees but will have to include them in the headline prices shown to consumers upfront. This ensures that the price shown initially is the total amount the customer will pay.
The FTC first started consulting on this back in 2022 and received more than 12,000 comments on hidden fees and misleading pricing; an additional 60,000 comments were made after the agency announced its plans.
Benefits of Transparent Pricing
- Easier comparison shopping: The rule will make it easier for consumers to compare prices across different offerings, as they will no longer be surprised by hidden fees.
- Time-saving: The FTC estimates that the Junk Fees Rule will save consumers up to 53 million hours per year of wasted time spent searching for total prices.
The rule applies not just to apps and websites but also to ads. Companies will not be allowed to advertise a price unless it includes all fees a customer would need to pay to make a booking.
While the rule specifically targets the hotel and event sectors, the FTC says it is already illegal for businesses generally to deceive customers about the true prices of goods and services they offer. It will continue to use its law enforcement powers in other fields.
The law will take effect 120 days after publication.
