Ban on 'junk fees' for live event tickets, hotels goes into effect: What to know

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FILE-A person uses the StubHub website on their phone to purchase tickets for an event. (Photo by Yui Mok/PA Images via Getty Images)

A final rule banning "junk fees" for live event tickets and hotels was announced by the Federal Trade Commission on Monday. 

What is the "Junk Fees Rule"?

Why you should care:

The "Junk Fees Rule" targets specific and deceptive pricing in the sale of live-event tickets and hotel stays. The rule does not prohibit any fee amount or specific pricing methods, but it requires that companies that advertise their prices are transparent with consumers about prices and fees. 

This rule also requires that businesses disclose the total price of mandatory fees and they can’t misrepresent any fee or charge in any offer, display or advertisement for live-event tickets or hotels. 

RELATED: Junk Fees: FTC proposal would ban hidden and bogus charges that drive up price

The Federal Trade Commission (FTC) noted that consumers searching for hotels and vacation rentals or seats at a concert or sporting event won’t be surprised by "convenience," or "service" fees inflating the advertised price. 

Moreover, the rule calls for businesses that exclude allowable fees up front to reveal clearly and clearly "the nature, purpose, identity, and amount of those fees before consumers consent to pay." According to the agency, by requiring the up-front disclosure of total price including fees, this new rule helps people make informed decisions when doing comparison shopping.

In 2022, the FTC introduced this rule by asking for feedback from the public on whether a rule could help terminate unfair and deceptive pricing methods. 

"People deserve to know up-front what they’re being asked to pay—without worrying that they’ll later be saddled with mysterious fees that they haven’t budgeted for and can’t avoid," FTC Chair Lina M. Khan said in a statement in an agency release.