The Federal Trade Commission (FTC) released new documents on Monday detailing its new “rules on unfair or deceptive fees.” The rule will come into effect on May 12 and prohibits hidden fees for on-site events, hotels and short-term rentals. It also prohibits practice "bait and switch pricing" and any actions that hide or distort the total price and expense.

In the newly released FAQ, FTC provides guidance for such businesses, providing detailed information on pricing transparency.

The rule will affect businesses, including on-site event ticketing sellers and short-term accommodation providers such as hotels, motels, Airbnb or VRBO. The new regulations also cover third-party platforms, dealers and travel agencies. (Airbnb has updated its services ahead of this new rule to show users the total cost of pre-stays.)

According to FTC:

• Tickets for live events include tickets to concerts, sporting events, music, drama and other live performances, which audiences watch but without pre-recorded audio or visual performances.
• The total price must include all known fees and fees.
• The website must disclose the total price of the advertisement and the quotes for other event tickets or short-term accommodation.
• The total price must also be more prominent than any other pricing information.
• The fees and expenses should not be misrepresented.
• The website should provide real information about the fees, including the refund policy.
• Websites should avoid vague terms such as “convenience fee,” “service fee” or “processing fee.”
• As long as the pricing information is not misleading, dynamic pricing strategies still allow it.

The FTC’s new FAQ also includes types of fees that can be excluded, such as tax or government fees, shipping costs, and the fees for optional goods or services that people may choose to buy as part of the same transaction. (Please note that processing fees are not in this list.)

However, the FTC noted that businesses must disclose that it has excluded charges from the total price before requesting payments. For example, if a business does not include shipping costs for advertising prices, it is necessary to clearly state the amount and purpose of these costs.

The FTC first passed the rule in December 2024, a landmark statute that marks the victory for many years for consumers who have been frustrated with hidden expenses.