The Federal Trade Commission (FTC) has passed a landmark rule that aims to eliminate deceptive “junk fees” in the travel sector, requiring businesses to disclose additional charges upfront. The new rule, which was approved by a 4-1 vote, mandates that ticket sellers, hotels, and vacation rental sites must include service fees, resort fees, and other surcharges in the total price shown to consumers at the initial listing stage, protecting them from surprise fees during checkout.
The decision marks a significant step in consumer protection. Under the rule, travelers will no longer be blindsided by last-minute charges that often inflate the final cost of their bookings.
“This rule ensures that consumers can see the full price of their purchase before they commit,” said FTC Chair Lina Khan. “Hidden fees have long been a way for companies to pad their profits at the expense of consumers. This new rule is designed to create more transparency and fairness in the marketplace.”
The vote was not without controversy. Republican Commissioner Andrew Ferguson opposed the ruling, arguing that the Biden administration had missed the appropriate window for rulemaking. However, Commissioner Melissa Holyoak, also a Republican, supported the rule, emphasizing its positive impact on both consumer protection and market competition.
President Joe Biden also voiced support for the rule, calling out the pervasive issue of hidden fees in consumer transactions. “We all know the experience of encountering a hidden fee at the very last stage of checkout. These junk fees sneak onto your bill, and companies end up making you pay more because they can,” he said. “Those fees add up, taking real money out of the pockets of Americans.”
The FTC estimates that the new rule could save U.S. consumers an estimated 53 million hours annually, thanks to the elimination of time spent on uncovering hidden costs during the booking process.
While consumer advocates applaud the change, the new rule has faced resistance from some large businesses in the travel and tourism industries, which argue that the changes could disrupt their pricing models. Nonetheless, the Biden administration has focused the rule on specific industries, including travel, while encouraging state and federal lawmakers to push for broader legislation that could address junk fees across all sectors of the economy.
This move represents a significant shift in the travel industry, where hidden fees have long been a point of contention for travelers. With the new rule in place, consumers can expect more transparent pricing when booking flights, hotels, and vacation rentals in the years ahead.
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