Nickel-and-Dime
This past spring, my niece graduated from UW Law School. She had a hooding ceremony for the law school on Friday followed by the service for all the grads at Camp Randall on Saturday. Despite having about 10,000 hotel rooms in Madison, there were only about three left when I booked one online. While I thought I found a good rate, after additional ‘resort’ and other fees and taxes, it no longer looked so great.
Thanks to the Federal Trade Commission, hopefully those surprise charges will be a thing of the past.
A new Federal Trade Commission rule aims to ban so-called “junk fees” on short-term lodging as well as on tickets to live events. The rule bans businesses from using such tactics to disguise prices and mislead customers who rent short-term lodging, such as hotels and vacation homes, along with consumers who buy tickets to concerts, sports, and other live events.
“People deserve to know upfront 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,” said FTC Chair Lina Khan. “The FTC’s rule will put an end to junk fees around live event tickets, hotels, and vacation rentals, saving Americans billions of dollars and millions of hours in wasted time.”
The new rules seem to be consistent with the government’s new push for transparency, such as clearer nutrition labels on food, but also on other products such as cell phones, and cell and internet plans.
According to the Commission, the new provision requires total prices for short-term lodging and event tickets to be presented to consumers in a “timely, transparent and truthful” manner. The measure is intended to ensure customers like me are no longer surprised by extra charges including “resort,” “convenience,” or “service” fees that inflate prices. It’s also designed to make comparing costs easier, according to the agency.
Hotels commonly add resort fees to cover costs like cleaning or the use of amenities such as fitness or aquatic centers. However, the FTC said such fees are deceptive, estimating that the new rule will save consumers both time and billions of dollars.
Businesses will undoubtedly still have surplus charges for extra services, but the new rules now require that those charges must be disclosed to consumers up-front, rather than burying them in fine print. The total cost for a hotel room or a ticket to a live event must be “clearly and conspicuously” advertised, including all fees, versus simply displaying a base rate or price. The rule mandates that the total must also be displayed more prominently than any other pricing information.
President Biden supports the FTC’s new measure, saying it’s an integral part of his agenda to help lower costs for American families. “We all know the experience of encountering a hidden fee at the very last stage of check out. These junk fees sneak onto your bill and companies end up making you pay more because they can,” he said in a statement. “Those fees add up, taking real money out of the pockets of Americans. Today’s announcement builds on work across my administration to ban junk fees and lower costs, saving many families hundreds of dollars each year.”
The Department of Transportation also has proposed a similar measure to ban family-seating fees and require that airlines disclose baggage and change fees upfront.
These new provisions remind me of the episode of ‘Seinfeld’ when Jerry buys a new car. “That undercoating, that’s just a rip-off, isn’t it, David?” Jerry asks the salesman. “Oh, we don’t even know what it is,” he replies.

Reg P. Wydeven

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