Advertising Law Blog

The FTC’s long-awaited Final Rule on Unfair or Deceptive Fees went into effect on May 12, 2025. The Final Rule seeks to eliminate “bait and switch” or “drip” pricing and instill transparency in connection with the offering of live ticketing events and short-term lodging. The Final Rule builds on certain state pricing transparency laws, such as those in effect in California and Minnesota, whose requirements apply to transactions beyond those identified by the FTC. 

In short, the Final Rule requires that for these types of offerings, the advertised price must include all prices and mandatory fees. Excluded from the mandatory all in pricing requirement are taxes and government charges, shipping charges, or optional good or services that consumers choose to add to their transactions. In addition to requiring businesses to “do the math” on additional fees and provide the total price, the Final Rule requires disclosure of the total price in more prominent type than other pricing information. 

As part of the launch of the Final Rule, the FTC has issued a series of FAQ’s which can be found here. The FAQ’s answer basic questions, such as the types of businesses covered by the Final Rule (which includes B2B transactions). 

Important FAQ’s relate to the disclosure of fees and additional charges, including:

• No Misrepresentations About Fees and Charges: When it comes to fees, a business must tell the truth about information it’s required to disclose, like how much it’s charging and why. It also must tell the truth about any other fee-related information it chooses to convey, like whether the fee is refundable. A business must describe what fees are for and avoid vague phrases like “convenience fees,” “service fees,” or “processing fees.”

Rather than using those terms that the FTC has deemed vague, the FAQ’s require the business to describe the nature and purpose of the fee.

• Credit Card Charges: If a business imposes a mandatory credit card processing fee, it must include the credit card processing fee in the total price.
• Shipping and Handling: A business can – but is not required to – exclude shipping charges from the total price. A business can incorporate the cost of shipping into the total price, for example, when offering “free shipping.”
  • If a business excludes shipping charges from the total price, it must disclose such charges before asking for payment and include those charges in the final amount of payment. Note: Shipping charges must reasonably reflect the costs to ship physical goods. A business can use flat-rate shipping or shipping costs based on national averages.
  • Note that “handling” charges are not considered “shipping charges” and must be included in the total price.

Given the nuances of the FTC’s Final Rule, businesses offering short-term lodging and live entertainment events should examine the FAQ’s carefully. Moreover, as these regulations begin to expand to other categories (as is the case on the existing state laws), businesses should carefully consider total pricing requirements and advertising practices.