INDIANAPOLIS — If you traveled this Holiday season, you may have booked a place to stay or a ticket to an event. When you looked at your bill, you might have seen some hidden fees at the bottom of your statement.
Now, a new ruling by the Federal Trade Commission will require those hidden fees to be given to consumers upfront.
The rule requires businesses to display the total price more prominently than most other pricing information. This means that the most prominent price in an ad needs to be the all-in total price.
This is something travelers say is often hard to come by.
"The deal is always a couple of hundred dollars more by the time you check out,” Margo Jones, an Indiana native heading to Florida from the Indianapolis International Airport, said.
The fees Jones is referring to are often called “junk fees."
Experts say the biggest culprits of adding on extra fees at the end of your purchase are hotels, short-term rentals, and ticket sellers, and there is a reason why.
"They are not taxed the same way as the room price,” Julian Kheel said. “Which means the hotel gets to keep more of your money instead of giving it to the government."
Kheel has been around the travel industry for 15 years. He is the CEO of Tripsight, Inc., a company that aims to help people travel better with products that make it faster and easier to understand the value of their frequent flyer rewards. He has also been studying the travel industry for 15 years.
He says so-called “junk fees” have become more prevalent in recent years as airlines and hotels have realized they can increase the amount of revenue they are bringing in without making it seem like they are raising prices.
This new ruling doesn’t mean that junk fees will go away, but requiring companies to be more upfront about their pricing when advertised could help you make a more educated and informed choice.
"The new FTC rule may not directly save you money by lowering the price,” Kheel said. “But it does mean you're more likely to be able to see when a hotel is legitimately offering a cheaper room than a competitor and make an educated choice."
Some of the travelers WRTV spoke to at the airport say they hope this new ruling will allow them to better understand what those extra fees are being used for.
"As long as we are looking at a level playing field and everybody knows what we are being charged for and exactly what those fees are being used for,” Matt Hodge said.
Others hope it will make pricing more reasonable.
"The transparency definitely needs to happen,” Jones said. “I think fees would be lower if they had to be transparent because it helps with the competition."
These changes won't happen overnight, so companies have time to adjust. The new rule goes into effect 120 days after it’s published in the Federal Register.
The expert we spoke with estimates that it will officially be in effect around late spring or early summer. However, that could change under President-elect Donald Trump's leadership once he takes office.
For more information about the rule click here.
