Ask the Experts: Minimum Wage & Paid Sick Leave Changes
By: Mark Burzych | Fahey Schultz Burzych Rhodes PLC
Q: What is the FTC's New "Unfair or Deceptive Fees" Rule?
A: On January 10, 2025, the Federal Trade Commission (FTC) published a rule that aims to eliminate unfair practices related to “junk fees” or “hidden fees.” This rule covers both live event tickets as well as temporary sleeping accommodation such as a “motel, inn, short-term rental, vacation rental, or other place of lodging.”
The Final Rule specifies that the “total price” is the “maximum total of all fees or charges a consumer must pay for any good(s) or service(s) and any mandatory Ancillary Good or Service” (any additional goods or services offered as part of the same transaction). Government charges, shipping charges, and fees for ancillary goods or services may be excluded under the rule.
The total price must be displayed more prominently than any other pricing information. If a final amount is displayed before the consumer completes the transaction, it must be disclosed as prominently as the total price.
The total price also must be displayed clearly and conspicuously, which means easily noticeable (“difficult to miss”) and easily understandable by ordinary customers. The clear-and-conspicuous requirement also covers audible communications. In addition to the total price, a business must display clearly and conspicuously the nature, purpose, and amount of any optional fee or charge that has been excluded from the total price, what the fee or charge is for, and the final amount of payment for the transaction.
A: On January 10, 2025, the Federal Trade Commission (FTC) published a rule that aims to eliminate unfair practices related to “junk fees” or “hidden fees.” This rule covers both live event tickets as well as temporary sleeping accommodation such as a “motel, inn, short-term rental, vacation rental, or other place of lodging.”
The Final Rule specifies that the “total price” is the “maximum total of all fees or charges a consumer must pay for any good(s) or service(s) and any mandatory Ancillary Good or Service” (any additional goods or services offered as part of the same transaction). Government charges, shipping charges, and fees for ancillary goods or services may be excluded under the rule.
The total price must be displayed more prominently than any other pricing information. If a final amount is displayed before the consumer completes the transaction, it must be disclosed as prominently as the total price.
The total price also must be displayed clearly and conspicuously, which means easily noticeable (“difficult to miss”) and easily understandable by ordinary customers. The clear-and-conspicuous requirement also covers audible communications. In addition to the total price, a business must display clearly and conspicuously the nature, purpose, and amount of any optional fee or charge that has been excluded from the total price, what the fee or charge is for, and the final amount of payment for the transaction.
To put it simply, the rule goes beyond disclosure: it affirmatively prohibits misleading fees. Under this new rule, it is unlawful to misrepresent any fee or charge in an offer, display, or advertisement for live-event tickets and short-term lodging, including the nature, purpose, amount, or refundability of any fee or charge and what it is for .
While previous versions of the rule proposed requiring restaurants to disclose many fees, including service charges and delivery fees, to consumers as a part of the total price of goods, the final rule does not apply to restaurants, or any other type of business besides those that offer tickets to live events and short-term lodging.
The rule goes into effect on May 12, 2025.
The rule goes into effect on May 12, 2025.
Covered businesses can take several steps towards compliance with the requirements of this new rule. The first step would be conducting a thorough review of all current pricing practices to help ensure that the total price – the full amount consumers must pay at checkout – is prominently displayed across advertisements, listings and platforms, and is the most visible pricing information.
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