FTC's Junk Fees Ban for Tickets and Travel to Go Into Effect by Next Summer

The Federal Trade Commission has finalized an initiative it began in 2022 at the urging of the Biden administration to eliminate “junk fees” at hotels, short-term rentals and for tickets to events such as concerts, it announced Tuesday.

The so-called Trade Regulation Rule on Unfair or Deceptive Fees would limit hidden convenience and service fees, such as those typically charged when booking event tickets or lodging rentals. It would also require companies to be more transparent about their pricing and fees, including in advertising. The finalized rule language would go into effect 120 days after it’s published in the Federal Register, which typically takes a few days. That means the rule would be active before next summer’s travel season.

The commission said it received more than 12,000 comments from consumers on how junk fees affect their spending or business. It expects to save US consumers 50 million hours per year in time wasted on pricing searches. 

Last year, some major players in those industries, including Ticketmaster and Airbnb, agreed to adhere to these concepts even before the rules were finalized. 

The ticket and lodging fee rules follow other major consumer-protection acts by the FTC and the Federal Aviation Administration, including rules that make it easier to cancel service subscriptions and rules targeting airline refunds for canceled flights.

The FTC also took action this week against the food-delivery service Grubhub in the state of Illinois. Grubhub will pay $25 million to settle charges that the company deceived diners over delivery costs and deceived workers about how much money they would make.

For the new FTC rule on lodging and ticket junk fees, the commission voted 4 to 1 in favor of publication of the final rule. The dissenting vote was from Andrew Ferguson, who has been chosen by President-elect Donald Trump to replace current chair Lina Khan.

In his dissenting statement (PDF), Ferguson said it was “inappropriate” to pass such rules before a new administration takes over. “I dissent only on the grounds that the time for rulemaking by the Biden-Harris FTC is over,” he wrote.

It’s unclear if the leadership change will affect this or other consumer-protection rules put in place during the Biden administration.