CLEVELAND — Legal analysis: The Federal Trade Commission has announced a final rule banning junk fees in a few specific industries.
Legally speaking, this means people buying tickets to see shows and booking places to stay will have a better idea of the total cost, up front.
The White House Council of Economic Advisors defines junk fees as "fees that are mandatory, but not transparently disclosed to consumers." Hiding the fees on the front end helps lure people in with the promise of a low price that was never really available.
We’ve all been there, when we shop for a ticket to an event and it shows up at a certain price but then add it to our carts online. Before we check out, required fees make it add up to a much higher price tag.
This is because fees like ones labeled as "resort," "convenience" or "service" fees have often been tacked on to what was advertised in the live-event ticketing and short-term lodging industries.
But that doesn’t mean those charges are going away. It just means what the FTC calls "unfair and deceptive pricing practices" are going away.
Now, businesses will have to "clearly and conspicuously disclose the true total price inclusive of all mandatory fees whenever they offer, display, or advertise any price of live-event tickets or short-term lodging," according to the FTC's final rule announcement. This will make it easier to comparison shop when you’re looking for the best deals in the live-event and short-term lodging industries.
The FTC estimates the new rule will "save consumers up to 53 million hours per year of wasted time spent searching for the total price for live-event tickets and short-term lodging." They say this time savings is "equivalent to more than $11 billion over the next decade."
The final rule will go into effect within the next several months, 120 days after it's published in the Federal Register.
Stephanie Haney is licensed to practice law in both Ohio and California.
The information in this article and video is provided for general informational purposes only. None of the information in this article and video is offered, nor should it be construed, as legal advice on any matter.