On May 5, 2025, Federal Trade Commission staff published Frequently Asked Questions (FAQs) designed to provide consumers and businesses with information regarding the agency’s Rule on Unfair or Deceptive Fees, which takes effect on May 12, 2025.
The Rule on Unfair or Deceptive Fees prohibits bait-and-switch pricing and other tactics used to hide total prices and mislead people about fees in the live-event ticketing and short-term lodging industries. The Final Rule is significantly more narrow than as initially-proposed.
According to the FTC, unfair and deceptive pricing practices can harm consumers and undercut businesses trying to compete fairly on price. The Rule also furthers President Trump’s Executive Order on Combating Unfair Practices in the Live Entertainment Market by ensuring price transparency at all stages of the live-event ticket-purchase process, including the secondary ticketing market.
The Final Rule is intended to preserve flexibility for businesses by not prohibiting any type or amount of fee or specific pricing strategies. However, the Rule requires businesses that advertise prices tell consumers the whole truth up-front about total prices and fees.
The FAQs provide guidance on such topics as:
What Businesses are Covered by the Rule?
Businesses selling live-event tickets and short-term lodging are covered.
The Rule covers any business that offers, displays, or advertises live-event tickets or short-term lodging, including third-party platforms, resellers and travel agents. Coverage applies whether such offers, displays, or advertisements appear online, including through a mobile application, in physical locations, or through some other means.
Importantly, business-to-business transactions are covered. The Rule also protects individual and business consumers.
What are the Final Rule’s Basic Requirements?
A business that includes pricing information in its ads and other offers must tell people upfront the total price they will pay for live-event tickets or short-term lodging. The total price includes all charges or fees the business knows about and can calculate upfront, including charges or fees for mandatory goods or services people have to buy as part of the same transaction.
There are some fees that may be able to by excluded from the total price. In other words, there are a few fees or charges a business can disclose later in the transaction, as long as it discloses them before asking for payment. The total price displayed upfront does not need to include the following charges:
- taxes or other government charges;
- shipping charges; and
- charges for optional goods or services people may select to buy as part of the same transaction.
However, a business must display the total price more prominently than other pricing information, except for the final amount of payment (as described below).
Also, excluded charges must be disclosed prior to asking for payment. Before a business prompts people to pay, the business must disclose the charges it has excluded from the total price. That disclosure should include the nature, purpose and amount of all such charges, and identify the good or service for which charges are imposed.
For example, if a business excludes taxes or shipping charges from the advertised price, the business must “clearly and conspicuously” disclose the amount and purpose of those charges. Before asking for payment, a business must add in any previously excluded charges and display the final amount of payment as prominently as, or more prominently than, the total price.
Importantly, the Rule prohibits misrepresentations about fees and charges. When it comes to fees, a business must tell the truth about information it is required to disclose, such as how much it is charging and why. It also must tell the truth about any other fee-related information it chooses to convey, like whether the fee is refundable. A business must describe what fees are for and avoid vague phrases like “convenience fees,” “service fees,” or “processing fees.”
Live-event tickets are covered under the Rule. Live-tickets events are for concerts, sporting events, music, theater and other live performances that audiences watch as they occur. In general, pre-recorded audio and visual performances and film screenings are not live events covered by the Rule.
Short-term lodging is also covered under the Rule. Examples of covered short-term lodging include:
- Temporary sleeping accommodations at a hotel, motel, inn, short-term rental, vacation rental, or other place of lodging;
- Home shares and vacation rentals offered through platforms (like Airbnb or VRBO);
- Discounted extended stays at a hotel
Examples of lodging that are not covered under the Rule include:
- Long-term or other rental housing that involves an ongoing landlord-tenant relationship;
- Short-term extensions to leases offered by rental housing providers;
- Temporary corporate housing offered by an apartment community under the same conditions as long-term leases.
There is no specified length of stay. The Rule does not mandate what length of stay qualifies as short-term. Whether a stay is short-term will depend on factors such as those listed above.
Which Mandatory Fees or Charges Must be Included in a Business’s Displayed Total Price?
Businesses must include all fees or charges that meet any of the following conditions (other than government charges and shipping charges):
- Fees people are required to pay, no matter what;
- Fees people cannot reasonably avoid (e.g., credit card processing charges when there is no other viable payment option);
- Charges for ancillary goods or services that people must buy to make the underlying good or service fit for its intended purpose, which reasonable consumers would expect to be part of the purchase. For example, if a hotel requires guests to pay for towels, the hotel must include the towel fee in the total price; or
- Fees people cannot effectively agree to because the business employs practices such as default billing, pre-checked boxes, or opt-out provisions. For example, a business cannot treat as optional an automatic fee that it removes only if a person notices and challenges it.
Examples of mandatory fees and charges that must be included in the total price:
- An online ticket retailer requires people to pay a fee to purchase live-event tickets online. The fee cannot be avoided and must be included in the total price;
- A resort charges a nightly rate of $199, plus a mandatory resort fee of $39 per day. The required resort fee must be included in the total price;
- A vacation rental adds a cleaning fee that consumers must pay in addition to the nightly rate. The cleaning fee must be included in the total price.
Can a Business Itemize Mandatory Fees or Charges?
Yes, but itemization must not overshadow the total price.
A business may itemize fees or charges for mandatory goods or services required to be included in the total price, but the total price must be clear, conspicuous, and most prominent. In addition, all itemizations must be truthful and not misrepresent fees, including what the fees are for.
Which Fees or Charges can Businesses Exclude from the Total Price?
Businesses may only exclude three categories of charges from the total price:government charges, shipping charges and fees or charges for optional ancillary goods or services that people choose to add to the transaction.
Excluded fees or charges must be disclosed later. Before asking for payment, a business that initially excludes a fee or charge from the total price must clearly and conspicuously disclose:
- the nature, purpose and amount of the fee or charge; and
- the good or service for which the fee or charge is imposed.
When Must a Business Disclose the Final Amount of Payment, Including Fees or Charges it Excluded from the Total Price?
A business must prominently display the final amount of payment before asking people to pay. A business must calculate, then clearly, conspicuously, and prominently disclose the final amount of payment, including taxes, shipping and optional add-ons, before asking people to pay. The final amount of payment must be displayed as prominently as, or more prominently than, the total price.
What are Ancillary Goods or Services and How Does the Rule Apply to Charges for Them?
Ancillary goods or services are additional goods or services a business offers as part of the same transaction. They may be mandatory or optional, depending on the specific facts of the transaction.
Businesses must disclose fees or charges for mandatory ancillary goods or services in the total price. Fees or charges are mandatory if they relate to a good or service that is:
- necessary to make the underlying good or service fit for its intended purpose; or
- a required purchase when people buy the underlying good or service.
Examples of mandatory ancillary goods or services:
- An online ticket seller automatically charges a 3% credit card surcharge on top of the advertised price and the seller does not offer another viable online payment method without a fee. The credit card payment is then a mandatory ancillary service. The seller must include the fee in the total price because people cannot reasonably avoid it;
- At check-in, a hotel automatically charges a resort fee for the use of its facilities, although it waives the fee if a guest notices and challenges it. The resort fee is a mandatory ancillary service. The hotel must include the fee in the total price because: (i) a reasonable consumer would expect use of the hotel facilities to be included with the stay; and (ii) automatically including the fee makes the good or service mandatory by effectively limiting people’s ability to consent.
Businesses do not need to include fees or charges for optional ancillary goods or services in the total price. A business may exclude from the total price fees or charges for optional ancillary goods or services that people may choose to add to the same transaction. However, if a consumer adds them, the business must clearly and conspicuously disclose such fees, and include them in the final amount of payment, before asking the person to pay.
Examples of optional ancillary goods or services:
- A comedy club sells tickets in-person at its box office and charges a 3% surcharge when people buy tickets with a credit card but not when people pay with a payment app, debit card, or cash. In this case, using a credit card is an optional ancillary good or service;
- A live music venue offers event tickets for $150 and a VIP package for $200 that includes the event ticket, drinks, and an appetizer. The VIP package is an optional ancillary good or service;
- A sporting event venue offers people the option to rent binoculars. Binocular rental is an optional ancillary good or service;
- A hotel offers guests the option to select a trip protection plan when booking online. The guest affirmatively must check a box to add the plan (the plan is not pre-selected). In this case, the plan is an optional ancillary good or service.
Can Businesses Charge Credit Card Surcharges and Other Payment Processing Fees and, if so, Can They Exclude Such Fees From the Total Price?
Businesses may charge or pass through credit card or other payment processing fees if otherwise permitted by law. If a business requires people to pay with a credit card, the credit card fee is mandatory and must be included in the total price.
If there is another viable payment method people can use at the same location or platform that does not incur a fee, then using the method that incurs a fee is optional, and the business need not include the fee in the total price. The business still must disclose the fee, include it in the final amount of payment before asking for payment, and may not misrepresent the purpose or amount of the charge.
How Does the Rule Treat Shipping Charges?
A business can – but is not required to – exclude shipping charges from the total price. Shipping charges must reasonably reflect a business’s costs to ship physical goods. A business can use flat-rate shipping or shipping costs based on national averages. Shipping charges do not have to reflect a business’s exact cost to ship goods.
A business can incorporate the cost of shipping into the total price, for example, when offering “free shipping.”
- If a business excludes shipping charges from the total price, it must disclose such charges before asking for payment and include those charges in the final amount of payment.
- Handling charges are not shipping charges. A business must include handling charges in the total price.
How Does the Rule Apply to Fees that Depend on Consumer Choices or Behavior?
If a business cannot calculate a fee or charge in advance because it depends on choices someone makes during the transaction, it can exclude the fee or charge from the total price.
For example:
- A theater offers general admission tickets for one price and upgraded balcony seats at a higher price. The theater may advertise the lowest available general admission total price only if people can actually buy tickets at that price and the pricing information is not otherwise misleading;
- When booking a hotel room, people may select from several optional features that impact the final amount of payment. The hotel may advertise room rates at the lowest available total price if people can actually book the advertised room at that price and the pricing information is not otherwise misleading. But once someone selects a feature that increases the rate, the hotel must update the total price to reflect such choices.
- A business can also exclude from the total price fees incurred after purchase, but only if those fees: (i) couldn’t be known at the time of purchase; or (ii) may not be considered part of the same transaction (for example, fees for late payment or charges for damage to a hotel room).
Can Businesses use Dynamic Pricing?
Businesses may use dynamic pricing strategies to adjust prices, for example, based on demand or inventory, so long as the pricing information is not misleading. Many businesses do, and may continue to, rely on regional or local advertising that enables pricing to vary by region or locality.
How Does the Rule Apply to Discounts and Promotional Pricing?
The Rule allows a business the flexibility to offer discounted pricing or pricing promotions. However, if the discount or promotion is not available to everyone, the total price should not reflect the discount or promotion. Once someone meets the requirements for the discount, the business can update the total price to reflect the discount.
For example:
- If a promotion is available only to some people, such as people who enroll in a rewards program, the total price is the price offered to everyone. If a business wants to display both prices, the total price must be most prominent;
- If a business offers a promotion such as “Buy One Get One Free,” it must display the total price without the promotion most prominently, unless and until the transaction meets the requirements for the promotion.
- If a business advertises a general discount such as “50% off,” without displaying the price of any particular good or service, the display would not require disclosure of the total price.
How Does a Business Disclose Pricing Information “Clearly and Conspicuously?”
A “clear and conspicuous” disclosure is easy for people to understand and difficult for them to miss. The Rule does not require specific fonts or type sizes, but specifies that:
- All disclosures. All disclosures must be made in the same way as the offer, display, or ad. In other words, if an ad is visual, the disclosure must be visual. If the ad is audible, the disclosure must be audible. If ads are both visual and audible – for example, a TV ad – the disclosure must be presented both visually and audibly at the same time;
- Visual disclosures. A visual disclosure must stand out so it’s easy for people to notice, read, and understand. When offering a visual disclosure, consider the disclosure’s size, contrast with the background and other text, location, and length of time appearing on screen;
- Audible disclosures. An audible disclosure – for example, on the radio or in a video – must be at a volume, speed, and cadence sufficient for ordinary consumers to easily hear and understand;
- Interactive electronic media. For offers, displays, or ads in interactive electronic media – such as online, including in an app – the disclosure must be unavoidable;
- Wording of disclosures. Disclosures must use plain language, can’t be contradicted by other statements, and must be in the same language as the offer, display, or ad.
What are Some Examples of Misrepresentations that May Violate the Rule?
- A hotel charges an “environmental fee” but does not actually use the fee to promote environmental sustainability or conservation.
- A ticket seller says a “usage fee” is required by the government when it is not.
- A speculative ticket seller advertises it has tickets available for a sold-out concert at a certain price but does not actually have those tickets. In this case, the tickets are not “available” at the time the business made the offer.
- A secondary ticket seller chooses to itemize all charges that make up the total price of a ticket. The secondary ticket seller includes a “taxes and fees” charge at checkout that inflates the actual government taxes and fees because it includes an amount that the ticket seller keeps as profit.
How Does the Rule Affect National or Regional Advertising Campaigns?
A business that advertises nationally, regionally, or locally with different prices for different locations should advertise the maximum total price applicable to the area the business is targeting.
How Does the Rule Apply to Online Marketplaces?
Businesses that sell or advertise on an online marketplace must provide the marketplace with accurate pricing information, including information about fees or charges for mandatory and optional ancillary goods and services.
Online marketplaces or other intermediaries, including those in the secondary ticket market, responsible for offering, displaying, or advertising the price of a good or service must give sellers the information necessary to calculate the total price. For example, if an intermediary charges a fee to access its platform and the seller passes the fee on to the consumer, the intermediary must give the seller accurate information about the fee so the seller can include this mandatory fee in the total price.
If intermediaries display pricing information for the seller, they must display the total price. In such a case, sellers must provide intermediaries with the information necessary to calculate the total price.
What Happens if a State or Local Law or Regulation has Different Requirements?
Businesses must comply with the Rule and all applicable state or local laws and regulations.
If a state or local law or regulation directly conflicts with the Rule and a business cannot comply with both, the Rule will supersede the state or local law or regulation but only to the extent of the conflict. In other words, a business still must comply with all parts of the state or local law or regulation that do not directly conflict with the Rule.
If a state or local law or regulation gives people greater protections than the Rule, businesses must comply with the Rule and the greater protections provided by the state or local law or regulation.
What happens if a business violates the Rule?
Businesses that violate any FTC Trade Regulation Rule – including the Junk Fees Rule – could be ordered to bring their practices into compliance, refund money back to consumers, and pay civil penalties.
Takeaway: The FTC Final Rule on Unfair or Deceptive “Junk” Fees covers businesses that offer, display or advertise live-event tickets or short-term lodging, “including third-party platforms, resellers, and travel agents,” regardless of where the advertisements appear. Notably, it also applies to B2B transactions. Importantly, sellers must be provided information necessary to calculate and disclose the total price upfront by online marketers and other intermediaries (for example and without limitation, secondary ticket market participants), including fees intermediaries charge.