New FTC rule on hidden fees takes effect next week

The rule is aimed at ticket sellers and short-term lodging platforms

By Mark Huffman of ConsumerAffairs

May 8, 2025

• New FTC rule takes effect May 12, 2025, targeting hidden and deceptive fees in ticketing and short-term lodging.

• Businesses must clearly disclose total prices up front, including mandatory fees.

• The rule supports efforts for greater pricing transparency and aligns with a Trump-era executive order.

In an effort to promote pricing transparency, the Federal Trade Commission has issued a set of Frequently Asked Questions (FAQs) to help businesses and consumers prepare for the upcoming enforcement of its Rule on Unfair or Deceptive Fees, which takes effect on May 12, 2025.

The new rule is designed to combat deceptive pricing practices, particularly in the live-event ticketing and short-term lodging sectors, where consumers have long been frustrated by last-minute fees that drive up final costs. The FTC rule prohibits bait-and-switch tactics and mandates that advertised prices reflect the true total cost, inclusive of all mandatory fees.

Transparency and fair competition

The rule stems from growing concern over how hidden fees harm consumers and distort fair competition. According to the FTC, these practices not only mislead buyers but also disadvantage businesses that price their services transparently. By leveling the playing field, the rule will try to make it easier for consumers to compare prices and make informed choices.

The new regulations align with the goals outlined in President Trumps Executive Order on Combating Unfair Practices in the Live Entertainment Market, emphasizing full disclosure of pricing details throughout the live-event ticket purchasing process, including purchases made through secondary markets.

Guidance for businesses and consumers

The newly published FAQs serve as a compliance guide under the Small Business Regulatory Enforcement Fairness Act, providing clarity on the rules scope and requirements. Highlights include:

• Identification of the industries and transactions covered by the rule.

• Definitions and examples of mandatory vs. optional fees, and how each must be presented.

• Instructions on how to clearly and conspicuously display total pricing.

• Clarifications on what constitutes a misrepresentation under the new rule.

The rule does not limit the types or amounts of fees businesses can charge. Instead, it focuses on how prices are communicated to ensure that consumers are not blindsided by unexpected costs after initiating a purchase.

By enforcing upfront transparency, the FTC said it hopes to restore consumer trust and encourage competitive honesty across affected industries. Businesses that fail to comply risk penalties for engaging in misleading conduct.

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