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Travelers have long complained about the so-called junk fees, or charges piled on by hotels, that ultimately led to a higher price at checkout than promised when making reservations.
The FTC has announced it will be cracking down on such charges, meaning whether they are labeled “resort fees,” “convenience fees” or anything else, it will be illegal to sneak them into final bills, as of spring 2025.
According to Skift, the measure comes two full years after the agency first said it was exploring a rule to clamp down on junk fees; the ruling on Tuesday has banned the practice.
The rule affects multiple industries but is heavily targeted toward travel companies, specifically hotels, short-term rental companies and online travel agencies. (Another place the ruling will be felt is in live entertainment, where audiences have been subject to such fees when buying tickets online for concerts and shows.)
Skift ‘s article notes, “(The final rule) does not prohibit any type or amount of fee, nor does it prohibit any specific pricing strategies. Rather, it simply requires that businesses that advertise their pricing tell consumers the whole truth up-front about prices and fees,” the FTC said in a press release.
There are two practices that would be prohibited:
- Misrepresenting the total cost by omitting mandatory fees
- Misrepresenting the nature and purpose of a fee
And really, it all goes back to transparency.
“People deserve to know up-front what they’re being asked to pay — without worrying that they’ll later be saddled with mysterious fees that they haven’t budgeted for and can’t avoid,” said FTC Chair Lina M. Khan.
Of course, whether the rule will stay in effect remains to be seen. The Biden administration waged war on junk fees but the previous Trump administration was sympathetic to hoteliers; the second Trump administration is expected to be even more lenient to the hospitality industry, meaning the ruling may be overturned.
The new FTC chair, Andrew Ferguson, according to Bloomberg Law, dissented against certain FTC rules, such as one to make it easier to cancel subscriptions. Ferguson also dissented against the junk fee rule.
Bottom line: Travelers will have to wait to see what happens.
CBS News notes that other traveler-friendly measures are afoot – at least for now. The Department of Transportation also has proposed a ban on family-seating fees, and required that airlines disclose baggage and change fees upfront.
Chuck Bell of Consumer Reports told ABC News that all rulings are largely complaint-driven.
"It really shows when consumers have an issue, they should complain about it and complain to the right agency," added Bell. "If you're getting ripped off in the marketplace, don't be silent. Speak up, complain to the FTC or the CFPB. And they look at the patterns of complaints that they receive. And in this case, they've really taken a very effective action."
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