Junk fees are extra charges that businesses tack onto the advertised price, often hidden until checkout, reservation confirmation, or lease signing. Since the “real price” only appears at the end, these fees can feel surprising or misleading (e.g., convenience, resort, booking or service fees).

In the customer experience, junk fees make it harder to compare prices and are especially frustrating for those on tight budgets.

In May 2025, the Federal Trade Commission (FTC) implemented the “Rule on Unfair or Deceptive Fees.” It requires businesses in certain industries to show the full price up front, including mandatory fees, rather than hiding or delaying them until checkout.

The rule does not ban fees entirely. It bans hiding them or misleading people about them, pushing companies to change how they present pricing across websites, apps, and ads.

Optional or add-on fees are outside the rule’s scope, though they must still be clearly disclosed if they will be charged. Certain charges like taxes, government fees, and shipping costs are still typically excluded from the advertised total price.

In addition to the FTC rule on unfair and deceptive pricing practices, several states have now passed their own laws with more expected as momentum builds.

The FTC rule affects mainly these industries:

• Live event ticketing (sports, theater, concerts)

• Hotels + short-term lodging (vacation rentals, Airbnb, motels, inns)

Many industries that rely on “junk fee” advertising practices such as multifamily rental housing/apartments, airlines, and higher ed are not covered by the FTC’s current definition.

No. Healthcare is not covered by the FTC’s junk fee rule. Instead, the industry is governed by other laws and regulations.

The Hospital Price Transparency Rule (effective January 1, 2021) requires hospitals to post prices online in both machine-readable files and in a consumer-friendly list of “shoppable services.”

The No Surprises Act (effective January 1, 2022) protects patients from surprise medical bills, especially for emergency care or when an out-of-network provider is involved at an in-network facility.

Most recently, an Executive Order signed on February 25, 2025 strengthened enforcement of price transparency in healthcare, requiring disclosure of actual (not just estimated) prices, improved consumer tools, and tighter oversight.

While these rules exist on paper, in practice, compliance is another story...

A 2024 PatientRightsAdvocate study found that only about 21% of U.S. hospitals were fully compliant with the Hospital Price Transparency Rule. Noncompliant hospitals face penalties, including civil monetary fines.

Even though the FTC’s new junk fee rule doesn’t directly cover apartments, other laws are changing how the rental housing industry works. Rules on consumer protection and fair competition are forcing big changes in how apartments are advertised.

In January 2025, the FTC and the State of Colorado sued the nation’s largest apartment manager for advertising the lowest base rent price and then adding mandatory charges (trash, package handling, and utility fees) that weren’t disclosed until closer to/after lease signing or at move-in. The lawsuit put pressure on the entire multifamily industry to adopt more transparent pricing and raised legal risks for all landlords and property managers.

As a result, going forward all lease forms, advertising copy, websites, and third-party listing services will need to reflect “all-in” monthly total pricing more consistently. Operators must clearly separate mandatory and optional fees and disclose them early in the customer (prospect) experience in addition to the base rent.

This push toward transparency will likely change renter behavior: when prospects can more easily compare total costs across properties, this shifts a vacant apartment’s competitive edge away from just its low base rent price and toward its overall value including its location and interior/community amenities.

Consider this example:

Apartment Complex A advertises a $1,000 base rent for their 1-bedroom floor plan. Later, they disclose mandatory monthly charges of $75 for technology, $40 for valet trash, $15 for shared amenities, $20 for pets, $50 for washer/dryer rental, and $5.50 for a service fee.

The actual monthly total to rent an apartment at Complex A is $1,205.50, excluding additional costs for electricity, gas, and water/sewer, which will fluctuate based on usage.

Apartment Complex B advertises a base rent of $1,100 for a 1-bedroom vacancy. Later, they disclose mandatory monthly charges of $25 for pets and $5 for a service fee.

The actual monthly total to rent an apartment at Complex B is $1,130, excluding electricity and water/sewer charges, which will vary based on usage.

Contrary to how it would appear upfront, renting at Apartment Complex B could actually cost less, saving a renter up to $75.50 per month. Plus, Complex B is all-electric, presenting the renter with additional potential savings (no monthly gas service costs).

Renters cannot truly know the “full picture” unless they also see each property’s list of optional fees, such as parking or garage costs, which they may choose to add.

When pricing is transparent, consumers, patients, and renters are less likely to feel misled and more likely to trust the business. Reducing surprises helps prevent disputes, lowers the risk of negative reviews, and mitigates potential legal exposure.

Current best practices for advertising, marketing, design teams, and publishing systems include:

• Disclose full, “all-in” pricing up front (or as early as possible) including all mandatory fees.

• Use consumer-friendly formats: clear language, accessible online tools, and straightforward comparisons.

• Break down the costs: separate mandatory from optional fees. In healthcare, distinguish what’s covered by insurance or aid versus what the patient must pay. In multifamily, categorize upfront and ongoing charges and clearly list “avoidable” fees such as late fees or pet violations.

• Conduct regular audits and updates: keep rates, service charges, and recurring costs accurate and current.

• Clearly label extra charges: explain the purpose, whether they are mandatory or optional, how often they recur, and how they can be avoided. For example, calling something an “internet fee” rather than a vague “technology fee.”

It’s important to note that online advertising often depends on underlying accounting/CRM software systems to meet compliance requirements. Make sure your software partners are aware of federal and state rules and are actively updating their products to support your advertised pricing compliance and accuracy.

We start with a comprehensive audit of your current customer experience to see exactly where pricing might feel unclear or incomplete.

From there, we’ll fix outdated messaging, update online and print collateral, streamline how fees are explained, and make sure your underlying software/technology supports compliance and accuracy.

Here’s what we’ll help put in place:

• Show the accurate, “all-in” price up front, including mandatory fees

• Use plain, customer-friendly language and formats that make comparisons simple

• Break down charges clearly, separating mandatory, optional, and avoidable fees

• Tailor disclosures to your industry (e.g., healthcare vs. multifamily)

• Label fees honestly so customers understand exactly what they’re paying for

• Address fixes within your software system so updates flow through consistently and integrate seamlessly with your existing publishing platforms

• Ensure your print/point-of-purchase collateral supports compliance

• Work alongside your legal team to identify and address gaps in advertising or policy compliance, ensuring that creative and operational practices align with applicable regulations

• Keep rates and fees accurate with regular reviews and updates

Our work results in a clearer, more trustworthy customer journey that reduces frustration, strengthens loyalty, and keeps you ahead of new regulations.

Pricing is sliding scale based on your company size and industry, typically ranging from $3,000-$5,000 “all in” for small firms (local business, single location) up to $15,000-$20,000+ for national brands or portfolios. Additional costs for printing/shipping and/or legal counsel may apply. Ongoing support billed hourly at $75-120/hour.

To get started, request an intro call to review your scope.

Disclaimer: Vermillion Design is not a law firm and does not provide legal advice. We do not represent clients in legal matters, and attorney fees are separate from our services.

Think of it this way: improving your customer experience proactively is the more affordable option, considering how quickly the potential costs of a pricing transparency lawsuit can add up!

As an example, let’s take a property management company with around 2,000 units whose portfolio spans 2-3 states.

Legal defense alone (covering attorneys, filings, and expert witnesses) could range from $500,000 to more than $2 million depending on the complexity of the case.

Civil penalties or fines could add another $500,000 to millions, especially if regulators count each hidden fee or lease as a separate violation.

On top of that, landlords may be required to provide refunds or restitution to tenants, which could reach $1 million or higher depending on how many renters were affected and how much they paid in undisclosed charges. (In the complaint filed by the FTC and Colorado, hidden fees cost consumers living in Greystar properties “hundreds of millions of dollars since at least 2019”.)

Finally, settlements often include the cost of compliance programs, technology updates, and advertising corrections (translation= you’ll have to do this work eventually, anyway).

Altogether, the total exposure for a regional operator could easily land in the low millions and, in more serious cases, climb into the tens of millions.

At Vermillion Design + Co., our proactive transparent pricing work is sliding scale based on your company size and industry, typically ranging from $3,000-$5,000 “all in” for small firms (local business, single location) up to $15,000-$20,000+ for national brands or portfolios. Additional costs for printing/shipping and/or legal counsel may apply. Ongoing support billed hourly at $75-120/hour.

To get started, request an intro call to review your scope.

Disclaimer: Vermillion Design is not a law firm and does not provide legal advice. We do not represent clients in legal matters, and attorney fees are separate from our services.