FTC bans hidden charges for stay occasions and short-term leases, efficient Might 12

The U.S. Federal Commerce Fee (FTC) on Monday launched new documentation detailing its new “Rule on Unfair or Misleading Charges.” The rule, set to take impact on Might 12, prohibits hidden charges for stay occasions, motels, and short-term leases. It additionally bans practices comparable to “bait-and-switch pricing” and any actions that conceal or misrepresent whole costs and charges.

In a newly revealed FAQ, the FTC gives a information for these kind of companies, offering detailed details about pricing transparency.

The rule will influence companies, together with stay occasion ticket sellers and short-term lodging suppliers, like motels, motels, Airbnb, or VRBO. Third-party platforms, resellers, and journey brokers are additionally coated by the brand new regulation. (Airbnb already up to date its service prematurely of this new regulation to point out customers the whole value of their keep upfront.)

In response to the FTC:

• Reside occasion tickets embrace these for live shows, sporting occasions, music, theater, and different stay performances that audiences watch as they happen, however not pre-recorded audio or visible performances.
• The entire worth should embrace all recognized expenses and charges.  
• Websites should disclose the whole worth upfront in adverts and different gives for live-event tickets or short-term lodging.  
• The entire worth should even be extra prominently displayed than every other pricing info.  
• There must be no misrepresentation about charges and expenses.
• Websites ought to present truthful details about charges, together with refund insurance policies.  
• Websites ought to keep away from imprecise phrases like “comfort charges,” “service charges,” or “processing charges.” 
• Dynamic pricing methods are nonetheless allowed so long as the pricing info isn’t deceptive.

Additionally included within the FTC’s new FAQ are the varieties of charges that may be excluded, comparable to taxes or authorities charges, delivery expenses, and expenses for non-obligatory items or companies folks might choose to purchase as a part of the identical transaction. (Observe that dealing with expenses aren’t on this listing.) 

Nonetheless, the FTC notes that companies should disclose that it has excluded expenses from the whole worth earlier than asking for fee. For instance, if a enterprise excludes delivery expenses from the marketed worth, it’s required to obviously state the quantity and goal of these expenses.

The FTC first handed the rule in December 2024, a landmark regulation that marked a major win for customers who’ve been annoyed for years about hidden charges.