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The agency said it should save consumers billions of dollars

By Mark Huffman Consumer News: New FTC rule targets ‘junk fees’ on live event tickets and hotel bills of ConsumerAffairs
December 17, 2024

The Federal Trade Commission has announced the finalization of the Junk Fees Rule, aimed at prohibiting deceptive pricing practices in the live-event ticketing and short-term lodging sectors. The rule targets the use of "bait-and-switch" pricing, where consumers encounter unexpected fees during checkout, inflating the total cost beyond the advertised price.

"People deserve to know up-front what theyre being asked to paywithout worrying that theyll later be saddled with mysterious fees that they havent budgeted for and cant avoid," said FTC Chair Lina Khan.

The FTC said the rule is expected to save Americans billions of dollars and millions of hours previously wasted on searching for the true cost of services.

The Junk Fees Rule requires that businesses must clearly disclose the total price, inclusive of all mandatory fees, whenever they advertise prices for live-event tickets or short-term lodging. This requirement aims to simplify comparison shopping for consumers and ensure a level playing field for businesses that adhere to honest pricing practices.

Two years in the making

The rule's development began in 2022, with the FTC seeking public input on the impact of hidden fees. The Commission crafted a rule after receiving more than 72,000 comments. It says the rule not only addresses consumer concerns but also maintains flexibility for businesses. It does not ban specific fees or pricing strategies but insists on transparency and truthfulness in advertising

The FTC estimates that the rule will save consumers up to 53 million hours annually, equating to more than $11 billion over the next decade. The rule requires that the most prominent price displayed in any advertisement be the all-inclusive total price, ensuring that consumers are not misled by partial pricing.

While the rule specifically targets the ticketing and lodging industries, the FTC said it will continue to monitor deceptive pricing practices in other sectors.



Photo Credit: Consumer Affairs News Department Images


Posted: 2024-12-17 17:58:46

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