Hidden fees from hotel and concert apps/websites have been banned.

The Federal Trade Commission (FTC) of the United States has issued a new rule prohibiting hotels and event industry apps and websites from using hidden fees to induce and exchange prices.

Travel agencies have found that it is common for companies to show misleading prices, then add hidden fees such as booking fees or resort fees before making them clear at checkout.

Companies cannot charge for garbage fees, but the initial price shown to consumers should include these garbage fees. Therefore, the first price shown is the total amount actually paid.

The FTC started consulting on this issue in 2022 and received more than 12,000 comments on hidden fees and clear prices. After the agency announced its plan, it also received over 60,000 additional comments.

The FTC states that disclosing real prices makes shopping easier and prevents consumers from wasting time.

The "Junk Fees Rule" aims to provide transparent and honest price information in a timely manner for live event tickets and short-term stays. The committee targets price practices in these industries, especially those involving hidden fees.

Consumers looking for hotel rooms, travel rentals, seats at performances or competitions will no longer be surprised when the advertised prices rise significantly due to "resort," "convenience," and "service" fees. This regulation requires pre-publication of total costs, making shopping easier and saving consumers money. This makes competition fair.

The FTC estimates that the "Junk Fees Rule" could save consumers up to 53 million hours a year by reducing the time they waste searching for the total price of live event tickets and short-term stays.

This rule also applies to advertisements, so companies cannot advertise prices if all fees required for actual reservations are not included.

The regulation targets hotels and the event industry, but the FTC will continue using its enforcement powers in other areas because generally business practices that mislead consumers about the actual prices of goods and services are already illegal.

"This law will take effect 120 days after it is published."

Photo: Unsplash by Yvette de Wit