The Federal Trade Commission finalized a new federal rule Tuesday that bars hotels and live-event companies from tacking on surprise fees when customers make purchases, deeming them unfair and deceptive practices.
The regulation would require companies to disclose any annoying “convenience,” “resort” or “service” fees upfront with the advertised price so that buyers don’t face sticker shock when they try to check out online. It is slated to go into effect as early as April 2025.
“People deserve to know up-front what they’re being asked to pay.”
– FTC Chair Lina Khan
FTC Chair Lina M. Khan said eliminating such “junk fees” would save consumers “billions of dollars and millions of hours in wasted time” when they’re shopping for hotel stays or concert tickets.
“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,” Khan, an appointee of President Joe Biden, said in a statement Tuesday.
With Biden’s presidency coming to a close, the administration has been trying to get a slew of new regulations out the door before President-elect Donald Trump assumes office and federal agencies likely move in a more business-friendly direction.
It’s not clear how the junk-fee rule — or Khan’s broader progressive agenda, for that matter — will fare during the new Trump era.
The incoming president announced last week that he plans to nominate Andrew Ferguson, a current FTC commissioner, to replace Khan as the agency’s chair. Ferguson, a Republican, was the only commissioner among five to vote against the final junk-fee rule.
Ferguson wrote that his dissent had “nothing to do” with the merits of the rule, only the fact that “the time for rulemaking by the Biden-Harris FTC is over.”
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“The Democratic majority’s four-year regulatory assault on American businesses has hindered economic growth and increased costs to the American consumer,” Ferguson claimed.
He added that it should be left to Trump to decide whether the junk-fee rule survives.
The new regulation rule is also vulnerable to being overturned by Congress because it was finalized late in Biden’s term. Republicans will have control of both the House and Senate next month and could use a tool known as the Congressional Review Act to repeal it before it takes effect.