The Federal Trade Commission has issued a final rule to prohibit deceptive fees for event tickets and short-term lodging.
Although the rule is expected to protect consumers from bait-and-switch tactics related to the total price of such things as concert tickets and hotel stays, its scope is limited compared to the FTC’s original proposal.
In November 2023, the FTC issued a notice of proposed rulemaking to prohibit unfair or deceptive practices related to fees for goods or services.
The U.S. Department of Transportation viewed the notice as an opportunity to protect truck drivers from predatory third-party tows.
“When a truck driver’s vehicle is towed, they can’t earn a living until they get it back – leaving them vulnerable to predatory junk fees from towing companies,” U.S. Transportation Secretary Pete Buttigieg said in a statement this past February. “We support FTC’s efforts to stand up for truckers by acting to ban junk fees and prevent predatory towing fees that can cause significant financial harm.”
However, the FTC’s final rule is a significantly scaled-back version.
“People deserve to know up-front 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,” FTC Chair Lina M. Khan said. “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. I urge enforcers to continue cracking down on these unlawful fees and encourage state and federal policymakers to build on this success with legislation that bans unfair and deceptive junk fees across the economy.”
The final rule targets deceptive pricing practices in the sale of live-event tickets and short-term lodging. It does not prohibit any type or amount of fee, nor does it prohibit any specific pricing strategies. Instead, it simply requires that businesses that advertise their pricing tell consumers the whole truth up-front about prices and fees.
The Commission vote approving publication of the final rule was 4-1, with Commissioner Andrew Ferguson dissenting. President-elect Donald Trump has nominated Ferguson to be the next chairperson.
Predatory towing
Although the final rule is extremely limited, the FTC noted that industries beyond event tickets and short-term lodging are still prohibited from deceiving consumers about fees and pricing. The FTC said it will use its authority to pursue bait-and-switch pricing tactics in other industries through case-by-case enforcement.
The change from the proposed rule will likely cause FMCSA to pivot in its approach to stopping predatory towing in the trucking industry. Before the FTC announced the limited scope of its sweep, FMCSA was using the FTC proposal as a way to tackle the problem.
“FMCSA believes FTC’s proposed regulation may significantly benefit the agency’s regulated community, specifically as it relates to the predatory towing practices that have a substantial financial impact on CMV owners and operators,” the agency wrote in February.
A third-party tow, also known as a nonconsensual tow, is one that is initiated by law enforcement with no opportunity for the trucker to negotiate services or compare prices. The Owner-Operator Independent Drivers Association, which represents small-business truckers, has long advocated for protections to prevent inflated bills.
In June, FMCSA held a public meeting to discuss the predatory towing problem.
It is unclear how the FTC’s final rule will affect FMCSA’s approach. In response to an email from Land Line, the agency said it will continue to explore ways to tackle issues that affect highway safety.
“Safety is our number one priority at the Federal Motor Carrier Safety Administration,” an agency official said. “As such, FMCSA remains committed to exploring this topic and other factors that may adversely impact trucking companies’ ability to provide safe and efficient services for the American public.” LL
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