Biden's FTC is banning 'junk fees' for hotels and concert tickets

The Federal Trade Commission on Tuesday delivered the latest salvo in President Joe Biden’s bid to take on so-called “junk fees” with a final rule targeted at “bait-and-switch” pricing in the live-event ticketing and hotel industries.

The FTC estimates that the Junk Fees Rule will save consumers up to 53 million hours per year of wasted time searching for the total price of tickets and housing. According to the agency’s calculations, that comes out to savings of more than $11 billion over the next 10 years.

The rule requires that businesses “clearly and conspicuously” present the total price of their services, including all mandatory fees, whenever they offer or advertise the price of short-term lodging or live-event tickets. They’re also required to display the total price more prominently than most other pricing information. Any fees that are excludable, such as shipping or taxes, will need to be disclosed before consumers attempt to pay for services.

“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,” FTC Char Lina Khan said in a statement, adding a call for policymakers to enact legislation banning “unfair and deceptive” fees across the U.S.

The rule was approved by all but one of the FTC’s commissioners, Andrew Ferguson, who President-elect Donald Trump has tapped to take over for Khan as the FTC’s chair. In his dissenting opinion, Ferguson wrote that his disagreement is “only on the ground that the time for rulemaking” by Biden’s FTC “is over.”

“This lame-duck Commission should give its regulatory pen a much-needed rest, focus on routine law-enforcement, and prepare for an orderly transition,” he wrote, calling the rule “inappropriate” because it will take effect after Trump takes office in January.

Last October, the White House launched its war on junk fees when it proposed a rule to prohibit the added costs and require companies to show full prices upfront. The U.S. Council of Economic Advisers estimates that American consumers spend $90 billion annually on junk fees, or over $650 per household.

The airline industry has been a key target of the bid to scrap junk fees, with the Biden Administration taking aim at charges for seat selection and checked bags, while the Transportation Department has simultaneously started requiring airlines to give automatic cash refunds for delayed or canceled flights.

Other industries targeted by the junk fee crackdown include credit cards, banks, and financial advice. Last week, the Consumer Financial Protection Bureau announced a final rule that would limit the number of overdraft fees that large banks and credit unions could charge.

“Today’s announcement builds on work across my Administration to ban junk fees and lower costs — saving many families hundreds of dollars each year,” Biden said in a statement. “Wherever big corporations try to sneak fees onto bills, my Administration has been fighting on behalf of American families to ban them.”

— Rocio Fabbro contributed to this article.