FTC Begins Rulemaking on Unfair Rental Housing Fees After Issuing Warning Letters

This week, the Federal Trade Commission (FTC) Bureau of Consumer Protection issued 13 warning letters to rental housing management software providers focused on the display of the total advertised price of their properties. According to the FTC, the software providers do not allow rental property managers and owners to advertise a total monthly rental price that includes all mandatory fees. This in turn prevents consumers from obtaining complete pricing information on those property owner websites and platforms.

The FTC noted that such practices may be in violation of Section 5 of the FTC Act, which prohibits unfair or deceptive acts and practices, as well as the Gramm-Leach-Bliley Act, which makes it unlawful to use false, fraudulent, or fictitious statements or representations to obtain, attempt to obtain, cause the disclosure of, or attempt to cause the disclosure of customer information of a financial institution. Violations are subject to civil penalties of up to $53,088 per violation.

Potential Violations of Section 5 and the Gramm-Leach-Bliley Act

Price transparency has been a major focus of this administration’s FTC commissioners. At this year’s ANA Masters of Advertising Law Conference, former commissioner Melissa Holyoak emphasized that the FTC will forcefully use its rulemaking powers and Section 5 of the FTC Act authority to ensure all businesses adhere to price transparency principles.

We also previously covered the agency’s Rule on Unfair or Deceptive Fees, which mandates total price disclosure for business engaging in live-event ticketing and short-term lodging. The original proposed rule on Unfair or Deceptive Fees under the Biden administration was not limited to certain industries, but the final rule’s scope was considerably scaled back.

FTC Signals Renewed Rulemaking on Rental Housing Fees

But in a sign of a renewed interest in rulemaking, earlier this month FTC Chair Andrew Ferguson announced he has directed the FTC to begin the rulemaking process to address unfair or deceptive fees in rental housing. While acknowledging the current FTC’s preference for enforcement of existing laws and regulations over new rulemaking, Ferguson explained his “support for promulgating rules for which Congress has undoubtedly given us authority and where such rules align with the agency’s traditional role as a cop on the beat.”

These developments may indicate the FTC approach to targeting certain industries it believes have a wide impact on American consumers. For more insights into advertising law, bookmark our All About Advertising Law blog and subscribe to our monthly newsletter. To learn more about Venable’s Advertising Law services, click here or contact one of the authors. And listen to the Ad Law Tool Kit Show—a podcast from Venable.