FTC junk fees rule: Shining the light on hidden costs

Caveat emptor, with help from regulators.

Written byMiranda Marquit

Fact-checked byDoug Ashburn

Hotel clerk with several extra hands taking credit card from customer.

Did you know it would cost this much?

It’s a common scenario: You snag concert tickets at a great price, excited you found a good deal. But once you head to the checkout page, you discover your total cost is much higher—thanks to hidden fees. In some cases, you might pay more in fees than the cost of your tickets.

In December 2024 the Federal Trade Commission (FTC) aimed to reduce these and other surprise fees by issuing its Rule on Unfair or Deceptive Fees (aka the “junk fees rule”), which affects short-term rentals, hotels, and live events. After the FTC junk fees rule took effect in May 2025, certain providers were required to display the total cost up front—before you get to the checkout screen.

Key Points

The FTC junk fees rule requires short-term rental, hotel, and live event ticketing providers to prominently display the total price, including all convenience and other fees, before a consumer reaches the checkout page.
Some costs, like taxes and shipping, can be provided at checkout, but they must be disclosed before the consumer enters their payment information.
The rule doesn’t include car rentals and airline tickets, but some consumer groups believe it’s a good first step toward protecting consumers from hidden fees.

What is the FTC junk fees rule?

The FTC junk fees rule is designed to provide consumers with more transparent pricing on short-term stays and live events. Providers must display the total cost with mandatory fees up front, before consumers get to the checkout page on a website. The total cost is also supposed to be prominently displayed in ads. In fact, the rule requires the total cost to be more prominent than any lower or promotional price.

Public input on the junk fees rule began in 2022. Tens of thousands of comments were received, indicating that consumers are interested in this issue. Although the final rule was narrower in scope than the original proposal, the rule passed with bipartisan support, and the FTC estimates it will save 53 million hours per year of wasted time. According to the FTC, the related time savings are worth more than $11 billion over 10 years.

The final rule became effective on May 12, 2025.

Fees and your money

Anytime you transact business—move money, make a purchase, or sell something you’ve previously purchased—there’s a cost, whether direct or indirect, and whether it involves a human who earns a salary or a platform that costs money to set up and maintain. Some fees are hiding in plain sight, and others are just hiding.

Mutual funds charge fees for management, marketing, and administration; these fees dilute the return on your investment.
Buy now, pay later (BNPL) plans offer free installment loans, but only if you pay on time and in full.
Annuities and certain life insurance policies allow you to cash out or “surrender” the policy, but at a steep cost.
Even “commission-free” stock trading isn’t entirely free.

What’s included in the junk fees rule

The junk fees rule specifically targets short-term stays, such as those in hotels and short-term and vacation rentals. It also focuses on the live events industry, including providers that sell tickets to concerts, sporting events, artistic performances, and touring acts.

All mandatory fees must be included in the total price up front. Mandatory fees, such as convenience fees, resort fees, and service fees, must be prominently displayed and included in the total price before the consumer gets to the checkout page.
Ads must include the maximum total. Rather than prominently displaying the minimum amount consumers might pay, the new junk fees rule requires up-front disclosure of the potential maximum cost someone might pay with all the mandatory fees.
Some fees can be disclosed during checkout. Certain costs, like taxes and shipping costs, usually aren’t calculated until you’ve made your selections. These can be disclosed later. However, the junk fees rule requires that they be provided before consumers offer their payment information.
The FTC laid out its rationale. Fees aren’t supposed to be hidden, and the FTC requires that these junk fees come with transparent explanations: what they are and what they’re supposed to accomplish. Providers must also include information about which fees are refundable.

The initially proposed rule included airline tickets, car rentals, and cell phone bills—other transactions for which the final, all-in price can be substantially higher than the base rate. After considering feedback from consumers and industry stakeholders, the FTC focused on two areas that received some of the biggest outcries in recent years: tickets and lodging. The FTC chair at the time, Lina Khan, said the agency would continue to challenge and combat junk fees across the economy.

What the junk fees rule means for consumers

The junk fees rule doesn’t cap fees or specify which fees aren’t allowed. Instead, the rule is designed to help consumers accurately assess the cost of products and services. With this rule in effect, consumers can see the total cost of tickets or a short-term stay before moving to the checkout page. And when booking a hotel, you won’t be blindsided by mandatory resort or amenity fees at check-in.

The rule also makes it easier to compare different options, since you don’t have to click through multiple pages to see the final cost. The requirement to prominently display the maximum you might pay with all fees makes it easier to quickly compare apples to apples when shopping around.

Double-check your final charges

Although the rule has gone into effect, you should still keep an eye on your final total. The rule allows providers to add tax and shipping costs later in the process, so they might not be included in the initial number you see. But they do have to show all the numbers before you provide payment information so you can verify the total before you commit.

Many consumer advocates, such as those at the Public Interest Research Group, point out that this is a step in the right direction, helping consumers make more informed decisions. Although some advocates had hoped the rule would go further, they acknowledge that more transparency will ultimately benefit consumers.

The bottom line

Managing a household budget includes comparison shopping and seeking transparency in all your transactions. But there’s more to it. A true budget considers your sources of income, mandatory costs like food, housing, and required debt repayment, and saving for the future. But don’t worry: A budget allocation target such as the 50-30-20 rule includes plenty of room for the fun stuff, like concerts and vacations. Just watch out for those hidden fees!

Whether you use AI or a spreadsheet, the 50-30-20 rule offers a solid starting point for budgeting your money.

Encyclopædia Britannica, Inc.

References

Federal Trade Commission Announces Bipartisan Rule Banning Junk Ticket and Hotel Fees | ftc.gov
Getting to the Bottom Line: The FTC’s Bipartisan Junk Fees Rule and Your Business | ftc.gov
Trade Regulation Rule on Unfair or Deceptive Fees | federalregister.gov

This article was most recently revised and updated by Miranda MarquitThis article was most recently revised and updated by Doug Ashburn