⚖️ FTC targets deceptive fees

FTC's Crackdown on Hidden Fees Takes Effect May 12

The U.S. Federal Trade Commission’s new “Rule on Unfair or Deceptive Fees” is set to go into effect on May 12, targeting hidden and misleading charges in industries like live entertainment and short-term rentals. The rule mandates that all known fees be included in the upfront total price and that this price be displayed more prominently than any other number. The FTC also bans vague fee labels (like “processing” or “convenience” fees), bait-and-switch tactics, and any misrepresentation around costs or refund policies. The goal: to give consumers a transparent and truthful pricing experience.

What Startups Need to Know About Compliance

Startups in the events, travel, or short-term lodging space—especially those operating platforms or marketplaces—must now ensure their user experience, marketing, and checkout flows comply with the new standards. If you display a price in an ad, that price must reflect all mandatory charges (excluding only taxes, shipping, or optional services—if clearly disclosed). While dynamic pricing is still permitted, it cannot be misleading or concealed behind unclear language. Importantly, the rule applies not just to the original sellers but also to resellers, agents, and third-party platforms.

Legal and Operational Adjustments for Founders

This rule is a reminder that pricing transparency is no longer just good UX—it's a legal requirement. Founders should conduct a top-to-bottom review of how prices and fees are presented on their platforms. Product and legal teams should collaborate to update interfaces, revise marketing materials, and document fee policies to reduce regulatory risk. For early-stage companies, building in compliance from the start is cheaper than facing FTC scrutiny later. With enforcement likely to follow, clear pricing could become a competitive advantage.

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