FTC Clarifies Impending “All-In” Pricing Rules With FAQ

The Federal Trade Commission’s Rule on Unfair or Deceptive Fees will take effect on May 12, 2025, placing new requirements on businesses selling live-event tickets and short-term lodging to disclose mandatory fees upfront. FTC staff published a detailed Frequently Asked Questions document on May 5, outlining how companies can comply with the policy, which aims to eliminate “bait-and-switch” pricing and improve transparency for consumers.

Links:

• Final Rule: https://www.ftc.gov/system/files/ftc_gov/pdf/r207011_udf_rule_2024_final_0.pdf
• FAQ’s: https://www.ftc.gov/business-guidance/resources/rule-unfair-or-deceptive-fees-frequently-asked-questions

The rule forbids hiding extra fees in the fine print, ensuring consumers see the full cost of their purchase before they pay. It covers a broad range of ticketed entertainment—concerts, theater, sporting events—and short-term lodging, such as hotels, motels, and vacation rentals. According to the FTC, the measure “furthers President Trump’s Executive Order on Combating Unfair Practices in the Live Entertainment Market by ensuring price transparency at all stages of the live-event ticket-purchase process,” including resales on secondary marketplaces.

“The Final Rule preserves flexibility for businesses by not prohibiting any type or amount of fee or specific pricing strategies,” reads a statement in the FTC guidance. “Rather, it requires that businesses that advertise prices tell consumers the whole truth up-front about total prices and fees.”

What the Rule Requires

Under the new policy (16 C.F.R. Part 464), businesses selling tickets or short-term lodging must:

• Disclose total prices up front. Any required fee that consumers cannot avoid—sometimes labeled as a “service fee,” “convenience charge,” or “facility fee”—must be included in the advertised cost.
• List excluded charges separately before payment. Taxes, shipping, and truly optional services (such as VIP packages or add-on insurance) can be listed separately, but must be shown clearly and included in a final, all-in price before checkout.
• Avoid misrepresentations. Vague or misleading labels for fees are prohibited, and any itemization must reflect the actual costs.

Notably, the rule is not intended to outlaw fees or limit how much businesses can charge. Instead, it demands clear, prominent displays of any mandatory costs that consumers will incur. Businesses that violate the regulation could face penalties, including orders to change their practices and refund customers.

Live-Event Ticketing and Short-Term Lodging Impact

For ticket sellers—primary and secondary alike—the regulation means that additional charges once applied at checkout, such as “service” or “processing” fees, must be included in the ticket’s initial advertised price unless they are truly optional. The FTC’s FAQ also clarifies that businesses can still offer dynamic pricing or varying rates based on seat selection, so long as they fully disclose the true total at each stage of the purchase.

For short-term lodging providers, items such as “resort fees,” “cleaning fees,” and other necessary add-ons must be wrapped into the initial nightly rate shown to consumers if they’re mandatory. In addition, any optional features—like paid room upgrades or travel insurance—can be excluded from the upfront total, as long as they’re disclosed before the consumer pays.

Guidance for Compliance

The FTC’s published FAQs serve as a small entity compliance guide, providing further clarity on matters such as credit card surcharges, shipping, and how to advertise discounts and promotions in a compliant manner. For example, a hotel that waives a resort fee only if a guest complains must stop burying that cost in a separate line item and instead show it in the total advertised price. Similarly, a ticket vendor offering both in-person sales (no extra charge) and online sales (with a fee) could list the online fee as optional, but only if another “viable” payment method truly exists without a surcharge.

In the event of conflicting state or local regulations, the FTC rule takes precedence where it is stricter, but businesses must still meet whichever requirements offer the greatest consumer protections.

Potential Penalties

Those who fail to comply face the possibility of FTC enforcement actions that may include substantial civil penalties, orders to bring their practices into compliance, and customer restitution. The agency stresses it “will never demand money, make threats, tell you to transfer money, or promise you a prize,” reminding consumers to report questionable activity at ReportFraud.ftc.gov.

With the May 12, 2025, implementation date approaching, businesses in live entertainment and lodging industries are advised to review the FTC’s guidelines and ensure their pricing displays meet the rule’s standards. By eliminating hidden charges, regulators hope to foster a fairer marketplace for both consumers and honest competitors.

Prior Coverage: FTC “Junk Fee” rule mandating “all-in” ticket pricing goes into effect in May.