• Targeted Disclosure Mandate: Businesses in the live-event ticketing and short-term lodging sectors must clearly disclose total prices — inclusive of mandatory fees — up front and more prominently than any other pricing terms.
• Narrow Scope, Broad Signals: While limited to two industries, the rule reflects the FTC’s ongoing focus on pricing transparency and digital marketing practices.
• Enforcement Begins Soon: Civil penalties of up to $51,744 per violation may apply beginning May 12, 2025.

Overview

The Federal Trade Commission (FTC) has finalized its long-anticipated Trade Regulation Rule on Unfair or Deceptive Fees, commonly referred to as the Junk Fees Rule. This is part of the FTC’s broader effort to improve price transparency in consumer transactions. Announced on December 17, 2024, the rule is scheduled to take effect May 12, 2025, and will apply to live-event ticket sellers and short-term lodging providers, including hotels, inns, and vacation rental platforms.

Designed to eliminate so-called “junk fees” — vague or unexplained charges that are not clearly disclosed up front — the rule requires businesses to present total pricing clearly and conspicuously at the outset of the transaction, rather than buried at checkout or behind multiple clicks. While its initial reach is limited, the rule signals a continuing regulatory trend toward increased scrutiny of fee disclosures and user interface design across industries.

The rule imposes several core requirements:

1. Total Price Disclosure: Businesses must clearly disclose the total price — including all mandatory fees — at the beginning of the purchase process. This price must appear more prominently than any partial or base pricing displayed, except for the final amount due at payment.
2. Excluded Fees Must Still Be Disclosed: Certain charges are not required to be included in the “total price,” such as government taxes, shipping fees, and charges for optional products or services. However, these must be clearly and conspicuously disclosed before the consumer agrees to pay.
3. No Misleading Fee Descriptions: The rule prohibits vague or misleading fee labels (e.g., “service fee” or “processing fee”) unless their nature and purpose are explained. It also bars businesses from implying that optional fees are government-imposed or legally required when they are not.
4. Applicability and Enforcement Scope: The rule applies exclusively to live-event ticketing and short-term lodging businesses. Other industries are not currently covered, but the FTC has indicated it may pursue additional rulemaking or enforcement efforts targeting pricing practices in other sectors.

Penalties for Noncompliance

Violations of the rule constitute unfair or deceptive acts under Section 5 of the FTC Act. As of 2024, the FTC may impose civil penalties of up to $51,744 per violation, and each instance of noncompliance may be treated as a separate offense.

Action Items for Businesses

Businesses subject to the rule should take immediate steps to prepare for the May 12, 2025, enforcement deadline:

• Audit Pricing Disclosures: Review websites, mobile apps, advertisements, and booking flows to ensure that total pricing appears early and clearly.
• Revise Fee Descriptions: Eliminate ambiguous or misleading terms; ensure that any excluded charges are transparently disclosed.
• Update UX/UI Design: Confirm that the total price is more prominent than any partial or teaser pricing displayed during the transaction process.
• Train Internal Teams: Ensure marketing, sales, legal, and product development teams are familiar with the rule’s requirements.
• Monitor State Law Overlap: Several states, including California and New York, have adopted or proposed similar transparency measures. Businesses operating nationally should harmonize compliance strategies accordingly.

Looking Ahead

While the rule’s immediate impact is limited to two industries, it reflects the FTC’s broader enforcement priorities regarding digital deception, dark patterns, and consumer choice architecture. Businesses across sectors should view this as a clear signal: pricing transparency is no longer just a best practice — it is fast becoming a regulatory baseline.