New federal rule bans

Ever booked a hotel room for $200 only to be surprised by an extra $40 “resort fee” at checkout? A new Federal Trade Commission rule aims to put a stop to such surprise charges by banning so-called junk fees on short-term lodging as well as on tickets to live events.

The rule bans businesses from using such tactics to disguise prices and mislead customers who rent short-term lodging, such as hotels and vacation homes, along with consumers who buy tickets to concerts, sports and other live events, the FTC announced Tuesday.

“People deserve to know upfront 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,” FTC Chair Lina Khan said in a statement. “The FTC’s rule will put an end to junk fees around live event tickets, hotels and vacation rentals, saving Americans billions of dollars and millions of hours in wasted time.”

Under the new rule, total prices for short-term lodging and event tickets must be presented to consumers in a “timely, transparent and truthful” manner, the FTC said. That’s meant to ensure people are longer surprised by extra charges including “resort,” “convenience” or “service” fees that inflate prices. It’s also designed to make comparing costs easier, according to the agency. 

Hotels commonly tack on resort fees to cover costs like cleaning or the use of amenities such as fitness or aquatic centers. But the FTC said such fees are deceptive, estimating that the new rule will save consumers both time and billions of dollars.

To be sure, businesses may still charge additional fees for service, but they must disclose such charges to consumers up-front, rather than burying them in fine print, and “clearly and conspicuously” advertise a hotel room or live event ticket’s total price including all fees, versus simply displaying a base rate or price, the FTC explained. The total cost also must be displayed more prominently than any other pricing information, the rule stipulates. 

Longstanding consumer protection laws prohibit business in other industries from deceiving consumers about fees and pricing.

President Biden weighed in on the FTC’s action banning hidden junk fees Tuesday, saying he’s prioritized lowering costs for American families.

“We all know the experience of encountering a hidden fee at the very last stage of check out —these junk fees sneak onto your bill and companies end up making you pay more because they can. Those fees add up, taking real money out of the pockets of Americans,” he said in a statement. “Today’s announcement builds on work across my administration to ban junk fees and lower costs — saving many families hundreds of dollars each year.”

The Department of Transportation also has proposed a ban on family-seating fees, and required that airlines disclose baggage and change fees upfront.