FTC bans hidden fees for live events and short-term rentals, effective May 12

CodeCanyon · May 5

The U.S. Federal Trade Commission (FTC) on Monday released new documentation detailing its new “Rule on Unfair or Deceptive Fees.” The rule, set to take effect on May 12, prohibits hidden fees for live events, hotels, and short-term rentals. It also bans practices such as “bait-and-switch pricing” and any actions that conceal or misrepresent total prices and fees.

In a newly published FAQ, the FTC offers a guide for these types of businesses, providing detailed information about pricing transparency.

The rule will impact businesses, including live event ticket sellers and short-term lodging providers, like hotels, motels, Airbnb, or VRBO. Third-party platforms, resellers, and travel agents are also covered by the new regulation. (Airbnb already updated its service in advance of this new regulation to show users the total cost of their stay upfront.)

According to the FTC:

Live event tickets include those for concerts, sporting events, music, theater, and other live performances that audiences watch as they occur, but not pre-recorded audio or visual performances.
The total price must include all known charges and fees.
Sites must disclose the total price upfront in ads and other offers for live-event tickets or short-term lodging.
The total price must also be more prominently displayed than any other pricing information.
There should be no misrepresentation about fees and charges.
Sites should provide truthful information about fees, including refund policies.
Sites should avoid vague terms like “convenience fees,” “service fees,” or “processing fees.”
Dynamic pricing strategies are still allowed as long as the pricing information isn’t misleading.

Also included in the FTC’s new FAQ are the types of fees that can be excluded, such as taxes or government fees, shipping charges, and charges for optional goods or services people may select to buy as part of the same transaction. (Note that handling charges aren’t on this list.)

However, the FTC notes that businesses must disclose that it has excluded charges from the total price before asking for payment. For example, if a business excludes shipping charges from the advertised price, it’s required to clearly state the amount and purpose of those charges.

The FTC first passed the rule in December 2024, a landmark regulation that marked a significant win for consumers who have been frustrated for years about hidden fees.

Techcrunch event