FTC’s ‘junk fee’ rules take effect on resort, ticket pricing

The Federal Trade Commission’s bipartisan “junk fee” rules took effect Monday, giving consumers new protections against fees in short-term lodging and the live-event ticketing.

While the new rules don’t prohibit resort fees or handling fees when buying sports or concert tickets, they order full disclosure of total pricing and prohibit bait-and-switch tactics that draw consumers in only to tack on unexpected fees that jack up the total price.

“This rulemaking is one piece of a broader commission effort to combat junk fees,” FTC Commissioner Lina Khan said when the rule was approved in December. “In the last three years, the commission has taken enforcement action against unfair and deceptive fees at a staggering pace — securing hundreds of millions of dollars in relief for Americans who were saddled with junk fees. The commission’s law enforcement actions have spanned a broad swath of the economy, touching on everyday expenses in areas like personal finances, phone services, health care, automobiles, housing and funeral services.”

But where it will affect Southern Nevada the most is in the lodging industry, where most resorts tack on resort fees of up to $60 a night to pay for features most guests assumed were included in the price — things like the use of WiFi or a fitness room.

Nevada Resort Association approves

“Our members already clearly and prominently disclose resort fees during the transaction to help guests make informed decisions,” said Virginia Valentine, president and CEO of the Nevada Resort Association. “We believe this requirement will level the playing field across the lodging and travel industry.”

The rule also orders full disclosure of processing fees for tickets to live-performance events.

The chief operating officer of West Hollywood, California-based Ticketmaster, which provides ticketing for several Southern Nevada entertainment venues, said the company embraced the FTC rules.

“Ticketmaster has long advocated for all-in pricing to become the nationwide standard so fans can easily compare prices across all ticketing sites, and we commend the FTC for making that a reality,” said Ticketmaster’s Michael Wichser. “Paired with the recent executive order targeting abuse in the secondary market, it marks a meaningful step forward for our industry, and we’ll continue pushing for additional reforms that protect both artists and fans.”

Ticketmaster said it will also tell customers where they are in line when they log in to buy tickets to an event. It will also give real-time updates to customers whose wait times exceed 30 minutes, letting them know ticket price ranges, availability and whether new event dates have been added.

Another company that supplies tickets also is on board with the new standard.

“StubHub is complying with the FTC’s new national standard,” said Mark Streams, general counsel of San Francisco-based StubHub. “This is just one step toward addressing the broken ticketing industry, where a total lack of competition leaves fans with higher prices, fewer choices and zero innovation.”

Efforts began in 2022

Khan said the commission launched efforts to illuminate junk fees in 2022 and held a series of hearings to establish the rules. The commission’s proposed rule in 2023 elicited more than 60,000 public comments, with people recounting their experience navigating junk fees in areas ranging from residential leasing and car rentals to carpet cleaners and payday lending.

Commissioners voted 4-1 on Dec. 17 to implement the rules after 120 days. That resulted in Monday’s startup.

Under terms of the rules, advertised prices will include all mandatory fees, with few exceptions. Businesses must tell the truth about the total price of live-event tickets and short-term lodging. They also must disclose how much the fees are, what they’re used for and whether they are refundable. Violators can be held liable for consumer redress and civil penalties.

There are three categories of charges that don’t have to be disclosed: Government charges, shipping charges and fees or charges for optional ancillary goods or services that people choose to add to the transaction.

The new rules also apply to short-term rentals, such as those provided by Airbnb and VRBO.

Contact Richard N. Velotta at [email protected] or 702-477-3893. Follow @RickVelotta on X. The Associated Press contributed to this report.