The U.S. Federal Trade Commission (FTC) has implemented a groundbreaking rule aimed at curbing the hidden junk fees that have long plagued consumers in industries such as travel and entertainment. Announced on Tuesday, the new regulation mandates that ticket sellers, hotels, and vacation rental platforms disclose the total price of goods and services upfront, including all additional fees, preventing these extra charges from being revealed only at the final stage of the checkout process.
This move is part of President Joe Biden’s broader initiative to eliminate deceptive pricing practices that drive up costs without providing real value to consumers. “We all know the frustration of encountering hidden fees just before checkout—these junk fees sneak onto your bill, and companies make you pay more simply because they can. These fees add up, taking real money out of the pockets of hardworking Americans,” President Biden remarked in a statement following the announcement.
The FTC voted 4-1 in favor of the rule, with the sole dissenting vote from Andrew Ferguson, a Republican Commissioner set to take over the agency’s chairmanship after the inauguration of President-elect Donald Trump. Ferguson voiced opposition to the rule, asserting that the “time for rulemaking by the Biden-Harris FTC is over,” though he refrained from commenting on whether the rule should be enforced under the next administration.
The new regulation aims to address the rising concerns about so-called “resort fees,” “service charges,” and other add-ons that often appear only after consumers have made their initial booking decisions. Under the new rules, these fees must be included in the advertised price of services, ensuring consumers are fully informed before making any purchase commitments.
FTC Chair Lina Khan, a key advocate of the rule, emphasized its importance for consumer protection. “I urge enforcers to continue cracking down on unlawful fees and encourage both state and federal policymakers to build on this success with comprehensive legislation that eliminates unfair and deceptive junk fees across the economy,” she stated.
The FTC estimates that the new rule will save U.S. consumers 53 million hours annually—time previously spent sifting through additional charges to understand the total cost of their purchases.
While the rule represents a significant victory for consumers, the Biden administration’s regulatory efforts to target hidden fees have faced pushback. Several legal challenges are ongoing, including a lawsuit in Texas that blocked a rule aimed at capping credit card late fees and a ruling from an appeals court in New Orleans that suspended a rule requiring airlines to disclose additional charges upfront. Despite these challenges, the FTC remains committed to protecting consumers from deceptive pricing practices.
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