Advertising Law Tool Kit - Fourteenth Edition - 2026

Venable / 35 34 / Venable When customers check out, they are used to seeing a list of fees accompanying the primary product or service. Businesses often add these fees for a variety of reasons, and they can go by a variety of names: service fees, convenience fees, or processing fees. While these fees can serve legitimate business purposes, the Federal Trade Commission regulates how these fees are presented to customers for specific industries through targeted rules such as Trade Regulation Rule on Unfair or Deceptive Fees and has broad authority to combat unfair and deceptive pricing acts or practices through Section 5 of the FTC Act. The Rule contains two main prongs that apply to the hotel and live event ticketing businesses. First, sellers must present the “Total Price” clearly and conspicuously in any offer, display, or advertisement. The Total Price must be disclosed more prominently than any other pricing information and be inclusive of all mandatory fees; i.e., if a customer cannot complete their purchase without paying the fee, it must be included in the upfront Total Price. Certain fees are excluded, such as shipping fees and government charges. Second, the stated purpose of the fee cannot be misleading—for example, characterizing fees as optional when they are mandatory or consumers are automatically opted in to pay them. States also have their own laws and regulations on fee disclosures, such as California’s “Honest Pricing Law,” which also incorporates a frequently invoked private right of action that allows consumers to directly file lawsuits against a business in court. Businesses should be deliberate in how they present fees to customers to ensure compliance with all applicable laws and regulations. Fee Disclosures Here are a few considerations to take into account when deciding how to advertise the price of your goods and services while also disclosing fees to customers: • Is the upfront, advertised Total Price clearly and conspicuously disclosed? Does any surrounding information obscure or detract from the Total Price? • Is it possible for the customer to complete their transaction at the price that was advertised as the Total Fee? If not, it is likely that mandatory fees were not included in the Total Price. • When trying to determine if a fee can be excluded from the Total Price, ask whether the fee is optional (e.g., travel protection) or mandatory. • If a fee is excluded because it could be a government charge, consider whether the business has discretion in charging the customer. • Does the customer have a clear idea of what the fee’s business purpose is? • How will the fee be utilized by the business? If its uses can be broken down into different purposes, consider labeling the fees separately and distinctly. • If using a third-party platform or service, are fees disclosed and displayed as intended? Jay V. Prapaisilp jvprapaisilp@Venable.com Leonard L. Gordon lgordon@Venable.com