New California law protects planners and attendees from resort fees
Last October, the Federal Trade Commission (FTC) announced a new proposed rule to prohibit junk fees, which are hidden and bogus fees that can harm consumers and undercut honest businesses. The FTC has estimated that these fees can cost consumers tens of billions of dollars per year in unexpected costs. The California legislature jumped on the proposal and passed a bill, The Consumers Legal Remedies Act, that went into effect earlier this month that makes unlawful certain unfair methods of competition and certain unfair or deceptive acts or practices undertaken by a person in a transaction intended to result or that results in the sale or lease of goods or services to a consumer, including advertising goods or services with intent not to sell them as advertised.
Meeting planners and their attendees have long encountered various junk fees, often added to the advertised room rate, making the final price higher than expected. Typical junk fees employed by the hotel industry include:
Resort fees: These mandatory fees are often added to the bill, even if guests don’t use the amenities they supposedly cover, such as pools, gyms, or Wi-Fi.
Destination fees: Similar to resort fees, these are added for being in a specific location, claiming to cover local taxes or vague services.
Amenity fees: These can be charged for in-room coffee, bottled water, or access to certain facilities, even if they seem like standard inclusions.
Parking fees: Some hotels charge exorbitant fees for parking, even if the lot is mostly empty or seems like it should be included in the room rate.
Early check-in/late check-out fees: These fees are imposed for accessing the room outside of standard hours, even if the room is available.
Cancellation fees: Some hotels have strict cancellation policies with high fees, making it difficult for guests to change plans.
Mini-bar restocking fees: These fees are charged for consuming items from the mini-bar, even if guests replace them with similar items from outside.
Related Reading: First Time Meeting Planner Guide
The new law in California authorizes a consumer who suffers damage as a result of the use or employment by a person of a method, act, or practice declared to be unlawful by that provision to bring an action against that person to recover or obtain certain relief, including actual damages of at least $1,000. “All too often, Americans are plagued with unexpected and unnecessary fees they can’t escape. These junk fees now cost Americans tens of billions of dollars per year—money that corporations are extracting from working families just because they can,” said FTC Chair Lina M. Khan. “By hiding the total price, these junk fees make it harder for consumers to shop for the best product or service and punish businesses who are honest upfront. The FTC’s proposed rule to ban junk fees will save people money and time, and make our markets more fair and competitive.”
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