The Federal Trade Commission has published FAQs to inform consumers and business owners about the Rule for Unfair or Deceitful Fees that will take effect on May 12, 2020.
The rule prohibits bait and switch pricing, as well as other tactics that are used to conceal total prices or mislead consumers about fees within the industries of short-term accommodations and live event ticketing. These unfair and misleading pricing practices can hurt consumers and undermine businesses that are trying to compete on price fairly. This Rule furthers President Trump’s executive order on combating unfair practices in the Live Entertainment Market, by ensuring that price transparency is maintained at all stages of ticket purchase for live events.
The Final Rule allows businesses to maintain flexibility by not prohibiting specific pricing strategies or fees of any kind. It requires businesses to tell the truth upfront about fees and total prices when advertising prices.
The FAQs offer guidance to such topics as:
- What types of businesses are covered and what the basic requirements are;
- The Rule covers live events, short-term accommodation and other types of lodging.
- Included in the price are any mandatory charges or fees.
- What fees and charges are excluded from the price?
- The Rule’s application to optional extra goods and services;
- How businesses can “clearly” and “conspicuously” disclose pricing information;
- Misrepresentations that violate the Rule
This document is the guide for small entities to comply with the Small Business Regulatory Enforcement Fairness Act. It represents the staff’s opinion of the Rule.
