The Federal Trade Commission announced Tuesday, December 17, 2024, a sweeping new rule that governs businesses that issue live-event tickets and other industries such as short-term lodging. The new regulation requires that these businesses explicitly disclose so-called “junk fees.”

              The multi-part rule specifically governs hotels, motels, inns, short-term rentals, vacation rentals, and other places of lodging. First, it declares it an unfair trade practice for any business to “offer, display, or advertise any price of a Covered Good or Service without Clearly and Conspicuously disclosing the Total Price.” Total Price is functionally defined as the maximum total of all charges, except for taxes, shipping costs, and fees for optional services. At first glance, this could impact short-term rental businesses that have historically charged a cleaning fee that is disclosed within the body of a listing.

              The rule goes on to say that in any offer, display, or advertisement for a covered service, the Total Price must be disclosed more prominently than any other pricing information. However, and this gets complicated, where the final amount of payment is displayed, that amount must be more prominently displayed than the Total Price. So, if the Total Price is $100, but the final amount for payment is $110 due to tax, the $110 figure must be more prominently displayed.

               Finally, the rule requires that a business must clearly and conspicuously disclose, prior to payment for any covered service, the nature and purpose of fees to be charged and the final amount of payment for the transaction. The rule will become effective in 120 days from its publication in the Federal Register.

               In the announcement, the FTC estimated that the rule will save consumers up to 53 million hours in comparison shopping, and that that time is equivalent to more than 11 billion dollars in time over the next decade.

               Impacted businesses are encouraged to consult with an attorney for further information. SNW clients with concerns or new clients are welcome to reach out to SNW Partner Graham Williams at graham@snw.law.