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FTC Bans Hidden Junk Fees on Tickets and Short-Term Lodging Purchases
In a move aimed at curbing deceptive pricing practices, the Federal Trade Commission (FTC) has announced the Junk Fees Rule, which will require live-event ticketing and short-term lodging businesses to be transparent about the total price owed. This new rule is expected to eliminate those extra “resort” and “service” fees that are often tacked on at checkout, leaving consumers shocked by the final amount.
Under the new regulations, companies can still include these fees in their pricing, but they must be factored into the initial cost displayed upfront. The required disclosure means that the first amount shown on displays, advertisements, and similar platforms should also be the total amount to be paid. This change aims to prevent businesses from hiding additional costs until the checkout process.
The FTC Chair, Lina M. Khan, emphasized the importance of transparency in pricing, stating, “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.” She urged enforcers to continue cracking down on unlawful fees and encouraged state and federal policymakers to build on this success by banning unfair and deceptive junk fees across the economy.
According to the FTC, this new rule is expected to save individuals up to an estimated 53 million hours each year and more than $11 billion over the next decade. The rule will come into effect 120 days after it is published in the Federal Register.
Source: http://www.engadget.com
