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The Federal Trade Commission's rule banning "junk fees" officially went into effect on Monday, May 12. The FTC passed the rule in December 2024 to prevent businesses from inflating prices by hiding mandatory costs through vague or hidden charges like "resort," "convenience," or "service" fees.
Companies selling concert tickets, hotel stays, and short-term vacation rentals now must display all required fees in advertised prices online, in print, and at physical locations.
"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," former FTC chair Lina Khan said. "The FTC's rule will put an end to junk fees around live event tickets, hotels, and vacation rentals, saving Americans billions of dollars and millions of hours in wasted time."
Businesses must clearly and prominently show the complete price before asking for payment. That includes charges for cleaning, resort access, credit card use, or anything customers can't reasonably avoid.
The FTC emphasized that fees must be described accurately, avoiding vague terms unless they're explained. Consumers may still see taxes and shipping costs added later, but only if they're disclosed clearly before paying.
The "junk fees" rule applies to tickets for live events like concerts, sports, and theater performances, along with hotels and short-term rentals on platforms like Airbnb and Vrbo. It doesn't apply to long-term rentals or speculative ticket resellers who can't guarantee tickets at the time of sale.
Optional fees like VIP add-ons or trip insurance don't need to be shown in the initial price, but must be disclosed before checkout if they're selected. The rule also allows dynamic pricing, as long as the full price is clear and accurate.
The FTC said the rule will save travelers up to 53 million hours per year of wasted time searching for tickets or vacation rentals. That estimated time savings adds up to more than $11 billion by 2035.
Even before the FTC's rule took effect, some companies were adapting.
Airbnb rolled out full-price listings globally in April. The company said nearly 17 million guests had used its total price display option since it first launched in 2022.
By the end of 2023, nearly 40% of active Airbnb listings no longer charged a cleaning fee.
"We have seen a lot more voluntary compliance since the rule was announced in December," Lauren Wolfe, counsel for the nonprofit Travelers United, told CNBC.
Some consumer advocates are worried that the rule may not be enforced. Cathy Mansfield, a law professor at Case Western Reserve University, said the purging of federal agencies under President Donald Trump may allow companies to get around the FTC's rule.
The Trump administration has fired two FTC commissioners and tried to terminate nearly 90% of the Consumer Financial Protection Bureau's staff – actions that are facing legal challenges.
"With the Consumer Financial Protection Bureau already incapacitated by the Trump administration, there probably won't be new protections for consumers — a rollback of existing protections where possible, and absolutely no enforcement of rules," Mansfield told CNBC. "This means no protection at all for consumers."
Chris Mufarrige, director of the FTC's Bureau of Consumer Protection, responded that the agency "is working hard to protect consumers and will continue to pursue enforcement actions against companies that violate the law, including through the new deceptive fee rule."
Trump signed an executive order in late March, directing the FTC to ensure price transparency "at all stages of the ticket-purchase process" in the live entertainment industry. A bill that House lawmakers passed in April would "prohibit unfair and deceptive advertising" in hotel and vacation rental pricing.
Consumers can report violations or misleading pricing on the FTC's website.
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