FTC Bans Hidden Fees for Live Events and Short-Term Rentals Beginning May 12

On Monday, the U.S. Federal Trade Commission (FTC) introduced new guidelines under its “Rule on Unfair or Deceptive Fees,” which will take effect on May 12. This rule bans hidden fees related to live events, accommodations, and short-term rentals. It also prohibits tactics such as “bait-and-switch pricing” and any efforts to obscure or misrepresent total prices and fees.

The FTC has released an updated FAQ designed to serve as a thorough guide for businesses, offering detailed information on pricing transparency.

This regulation will impact various businesses, including vendors selling live event tickets and providers of short-term lodging, such as hotels, motels, Airbnb, or VRBO. Furthermore, third-party platforms, resellers, and travel agents are also subject to these new rules. (Significantly, Airbnb has preemptively modified its platform to show the total costs of stays upfront in anticipation of this regulation.)

According to the FTC:

• Live event tickets include those for concerts, sporting events, theater productions, and other live performances, but exclude pre-recorded audio or visual presentations.
• The total price must include all known charges and fees.
• Platforms are required to display the total price prominently in advertisements and other offers related to live event tickets or short-term accommodations.
• The total price should be more prominently displayed than any other pricing information.
• There must be no misleading representation concerning fees and charges.
• Platforms must provide correct information about fees, including details of refund policies.
• Terms like “convenience fees,” “service fees,” or “processing fees” should be avoided due to their ambiguous nature.
• Dynamic pricing techniques are allowed as long as they are not misleading.

The FTC’s updated FAQ clarifies which fees can be excluded, including taxes or government charges, shipping costs, and fees for optional goods or services selected during the same transaction. (It’s important to note that handling charges do not fall under this exclusion.)

However, the FTC underscores that businesses must disclose any excluded charges from the total price before requesting payment. For example, if a business leaves out shipping fees from the displayed price, it must clearly communicate the amount and justification for those charges.

Originally instituted in December 2024, this regulation marks a significant regulatory change aimed at alleviating consumer concerns regarding hidden fees.