FTC Junk Fee Rule: What It Prohibits, Covers, and Penalties

The FTC junk fee rule, formally the Rule on Unfair or Deceptive Fees at 16 C.F.R. Part 464, took effect on May 12, 2025 and requires two industries, live-event ticket sellers and short-term lodging providers, to show consumers the real total price upfront instead of tacking mandatory charges on at checkout.¹ Businesses that violate it face civil penalties of up to $53,088 per violation and can be ordered to refund overcharges directly to consumers.²

Which Businesses Have to Follow It

The final rule reaches only two industries. Live-event tickets covers concerts, sporting events, theater, and similar performances audiences watch as they happen; pre-recorded shows and film screenings generally fall outside. Short-term lodging covers hotels, motels, inns, vacation rentals, and home-share properties listed through platforms like Airbnb or VRBO.³

Coverage is not limited to the venue or the property itself. Any business that offers, displays, or advertises pricing for these goods is on the hook, including third-party platforms, resellers, and travel agents. A secondary ticket marketplace like StubHub carries the same obligations as a venue’s own box office.⁴

Plenty of industries people associate with add-on fees are not covered. Car dealerships, telecom providers, and restaurants sit outside this rule. Earlier proposals were much broader, but the final version was scaled back. If you run a business in one of those other industries, this specific rule does not apply to you, though Section 5 of the FTC Act still prohibits deceptive practices generally.⁵

What the Rule Prohibits

The rule targets two distinct problems, and it treats them as separate violations.

Hidden Fees

A hidden-fee violation happens when a business advertises a price without clearly and conspicuously disclosing the total price. Show a hotel room at $150 a night and add a $35 resort fee at checkout, and you have advertised a price that is not the total price. Intent doesn’t matter, and the fee doesn’t have to be buried in fine print to count. If the total price isn’t displayed clearly and conspicuously, the fee is hidden in the legal sense even if it appears somewhere on the page.³

Misleading Fees

Separately, the rule bans misrepresenting any fee. That includes lying about what a fee is for, inflating the amount, or claiming a fee is nonrefundable when it isn’t. A ticket seller that labels a markup as a “venue security fee” when no such cost is passed through is misrepresenting the purpose of the charge. A vacation rental platform that describes a mandatory charge as “optional” is misrepresenting its nature. Both are violations even when the total price is technically disclosed correctly.³

The two prohibitions overlap in practice. A resort fee that inflates the total cost and is also described as covering amenities that don’t exist would violate both. Each instance counts as a separate violation for penalty purposes.

How the Total Price Must Be Shown

Whenever a covered business displays a price, that price must include the maximum total of all fees and charges the consumer must pay, plus any mandatory add-ons.³ Only three categories of charges may be left out:

Government taxes and government-imposed fees.
Shipping charges that reasonably reflect the actual cost of mailing physical goods. Internal handling costs like warehousing or labor to prepare items for shipment don’t qualify as shipping and have to be included.⁶
Genuinely optional add-ons a consumer can decline without losing access to the core purchase.

Everything else goes into the total price. Service charges, processing fees, facility fees, cleaning fees, platform fees, all of it must be reflected in the number a consumer sees from the moment they start shopping. The rule ends the practice of drip pricing, where fees are revealed one at a time as a buyer moves through checkout.

Showing the total price somewhere on the page isn’t enough. It must be displayed more prominently than any other pricing information.⁷ A business can’t show a lower base rate in large bold type and put the total price in small print below it. One exception: on the final payment screen, the actual transaction amount must appear at least as prominently as the total price, so the buyer sees exactly what will be charged at the moment of purchase.

Vacation Rentals and Platform Fees

Short-term rentals are one of the areas where the rule changes the most for consumers. A property listed on Airbnb or VRBO showing a $120 nightly rate that adds a $75 cleaning fee at checkout has been out of compliance since May 2025. The cleaning fee has to be in the total price shown in search results and on the listing page.⁴

Platform service fees add a wrinkle. When a platform charges a fee passed through to the guest, it must give the property owner accurate information about that fee so the owner can factor it into the total price. When the platform itself displays the pricing, the platform is directly responsible for showing the total including its own fee.⁴ Neither the host nor the platform can point at the other to escape compliance.

Penalties and Refunds

The FTC enforces the rule under Section 5(m)(1)(A) of the FTC Act, which authorizes civil penalties for knowing violations of trade regulation rules. The statute sets a base penalty of $10,000 per violation, but annual inflation adjustments have pushed that figure to $53,088 per violation as of January 2025.² Each misleading advertisement, each undisclosed fee, and each day of ongoing noncompliance can count separately.⁵ For a hotel chain running the same hidden resort fee across thousands of bookings, exposure climbs fast.

Civil penalties require “actual knowledge or knowledge fairly implied on the basis of objective circumstances” that the practice is deceptive and prohibited. A business cannot escape penalties by claiming ignorance of a published rule that has been in effect and widely reported. If the circumstances make it obvious the business should have known, that is enough.⁵

Courts set penalty amounts by weighing the severity of the conduct, prior violations, ability to pay, and the effect on the company’s ability to keep operating. A first-time violation by a small inn will not draw the same penalty as a pattern of deception by a national ticketing platform, but neither is exempt.

Beyond penalties paid to the government, the FTC can seek court orders requiring businesses to refund money directly to affected consumers. This authority comes from 15 U.S.C. § 57b, which allows courts to grant refunds, contract cancellations, and damages. Punitive damages are not available under this statute.⁸ You don’t need to file an individual claim or join a class action for the FTC to pursue refunds on your behalf. A successful enforcement action against a hotel chain that hid resort fees can require the chain to return overcharges to every affected guest.⁴

What Consumers Can Do

One important limit: this rule does not give individual consumers the right to sue a business directly. Enforcement runs exclusively through the FTC.⁴ If you encounter a hidden fee on a concert ticket or a vacation rental, you cannot file your own lawsuit under this rule. Some state consumer protection laws do allow private suits over deceptive pricing, so the federal rule is not always the only avenue, but it is not itself one you can use in court.

Your recourse is to report the violation. The FTC relies heavily on consumer complaints to identify noncompliant businesses and maintains a dedicated reporting channel for this rule. Reports feed the agency’s enforcement database and help determine which companies face investigation.⁴ A single report doesn’t guarantee action on your case, but patterns of complaints against the same business are what trigger the formal enforcement process that leads to penalties and refunds.

1
Federal Trade Commission. FTC Rule on Unfair or Deceptive Fees to Take Effect on May 12, 2025
2
Federal Register. Adjustments to Civil Penalty Amounts
3
eCFR. 16 CFR Part 464 – Rule on Unfair or Deceptive Fees
4
Federal Trade Commission. The Rule on Unfair or Deceptive Fees: Frequently Asked Questions
5
Office of the Law Revision Counsel. 15 USC 45 – Unfair Methods of Competition Unlawful; Prevention by Commission
6
Federal Register. Trade Regulation Rule on Unfair or Deceptive Fees
7
eCFR. 16 CFR 464.2 – Hidden Fees Prohibited
8
Office of the Law Revision Counsel. 15 USC 57b – Civil Actions for Violations of Rules and Cease and Desist Orders Respecting Unfair or Deceptive Acts or Practices