In a sea change that could save American consumers time and money, the Federal Trade Commission (FTC) on Tuesday finalized a rule that would ban surprise “junk fees” for tickets to live events, hotels and vacation rentals.
The rule would require companies to disclose total prices up front, rather than adding additional costs like “convenience fees” or “resort fees” when consumers make purchases online.
“Whatever price you see, it's the price you're paying in the end – no more mystery, surprise fees at the end of the process, which actually mislead consumers and also punish honest businesses,” the FTC chairwoman said. , Lina Khan, in an exclusive interview with ABC News.
The FTC said the final rule, which will take effect around April next year, could save consumers 53 million hours of wasted time searching for the full price of tickets for live events or short-term accommodations, equivalent to about $11 billion in savings over a decade.
The rule would not prevent companies from charging fees. However, they would be required to list prices clearly from the beginning and display the total cost more prominently on a website than any other price.
“This should really provide the American people with a little more clarity and confidence so that they don't feel cheated or that they have to be bait and switch for all of these deceptive pricing tactics. It's really about saving people money and time,” Khan said.
The change is part of a broader push by President Joe Biden's administration to reduce costs as households have been hit by persistent inflation. Last week, the Consumer Financial Protection Bureau announced a final rule to curb bank overdraft fees.
In a statement to ABC News, Biden said: “Today's announcement builds on the work done across my administration to ban junk fees and reduce costs, saving many families hundreds of dollars each year.”
The U.S. Chamber of Commerce has opposed the rule, calling it “nothing more than an attempt to micromanage companies' pricing structures, often undermining companies' ability to offer consumers choices at different prices.” .
The business lobby has already sued the FTC over other regulations, including a rule to ban non-compete agreements for millions of workers.
(ABC NEWS)
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