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What you need to know
- The Federal Trade Commission finalized on Tuesday a new rule that requires hotels and events to advertise the price of their services, including all charges.
- This rule is designed to make it easier for consumers to compare prices and eliminate hidden fees.
- President Joe Biden's administration has used its regulatory powers to go after "junk fees" for consumers in several industries.
You may notice that the next time you buy concert tickets or book a room at a hotel, your prices are higher because of the inclusion of fees previously added to checkout.
Federal Trade Commission finalized on Tuesday a rule that will ban any hidden fees or charges for tickets to live events and short-term accommodations. In these two sectors, purchases are often accompanied by a string of additional fees.
Under the new rule, things like "resort fees" and "convenience fees" will have to be disclosed as part of the advertised price, rather than being revealed only when you're checking out. FTC says the goal is to simplify comparison shopping.
“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,” FTC Chair Lina Khan stated in a statement prepared.
Hotel and Live Event Venues are exempt from the new Rule
It is a much more narrowly defined rule than that proposed in the previous year’s proposal, which was intended to cover all types of businesses and not only hotels and live entertainment.
This means that the rule will be in effect four months after it is published by the Federal Register. It also falls under President Donald Trump’s new administration. Melissa Holyoak has openly supported the change in rule. Her name is being floated for a potential FTC Chair under Trump.
Curtailing “junk fees” Under the presidency of Joe Biden, federal agencies that monitor consumer rights have focused on this issue. Consumer Financial Protection Bureau created regulations to restrict credit card fees for late payments and overdrafts, while Department of Transportation restricted airline charges.
After fierce opposition by the banking industry which also filed to stop the rule on overdraft fees, the CFPB rule for credit cards has been halted in court.
Michael Negron said in an interview with Investopedia, a White House National Economic Council member, that the campaign still has an impact on the business practices of companies. After CFPB’s investigation, several banks voluntarily lowered overdraft charges. Last year, Ticketmaster included fees in the price of some tickets.
“You’re seeing a movement toward more transparency, a move away from bait and switch approaches to pricing,” He said.
Michael Negron’s comments have been added to this article.
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