Glossary · Deceptive Pricing

Bait-and-Switch Pricing & Drip Pricing (Junk Fees): Deceptive Pricing Class Actions Explained

By Steve Levine · Updated July 2, 2026 · 8 min read

Quick Answer

Bait-and-switch is advertising a product or price the seller never intends to sell as advertised, then steering buyers to a pricier alternative. Drip pricing — the “junk fees” problem — is advertising a low headline price and revealing mandatory fees (resort fees, service fees, convenience fees) only at checkout. Both are deceptive practices under the FTC Act and state consumer-protection statutes. The FTC's Rule on Unfair or Deceptive Fees (finalized December 2024, effective May 2025) requires live-event ticket sellers and short-term lodging to disclose the total price, including all mandatory fees, up front. California's SB 478 “honest pricing” law (effective July 1, 2024) goes further, barring most businesses from advertising any price lower than what the consumer will actually pay. Hidden-fee class actions typically seek refunds of the undisclosed fees.

What Bait-and-Switch Pricing Is

Bait-and-switch is one of the oldest deceptive sales tactics on the books. The seller advertises a product at an attractive price — the bait — without any genuine intent to sell it on those terms. When shoppers respond, the seller pushes them toward a different, usually more expensive, product — the switch. The Federal Trade Commission (FTC) has treated bait advertising as deceptive for decades: its Guides Against Bait Advertising describe the practice as an offer that is not a bona fide effort to sell the advertised product.

Classic warning signs include a salesperson refusing to show the advertised item, claiming it is sold out (while conveniently having a pricier model in stock), disparaging the advertised product, having so little stock that the ad could never be honored, or penalizing employees who actually sell the advertised item. The conduct is unlawful whether it happens on a car lot, in a furniture showroom, or on an e-commerce landing page — and it is separately prohibited by most state consumer-protection statutes, which is where private lawsuits usually come from, since the FTC Act itself has no private right of action.

What Drip Pricing & Junk Fees Are

Drip pricing is the modern, digital cousin of bait-and-switch. Instead of switching the product, the seller switches the price: a low headline price draws the shopper in, and mandatory add-on charges “drip” out one screen at a time until the final total at checkout is meaningfully higher than the advertised number. Because the buyer has already invested time comparing options and entering information, many complete the purchase anyway — which is exactly why the design works. Regulators group these mandatory add-ons under the label junk fees. Common examples include:

  1. Resort & destination fees. Mandatory nightly hotel charges excluded from the advertised room rate.
  2. Ticket service & processing fees. Per-ticket or per-order charges added to concert, theater, sports, and festival tickets at checkout.
  3. Convenience fees. Charges for ordinary online or electronic purchases — paying the way virtually everyone pays.
  4. Delivery-platform and booking fees. Stacked service, regulatory, and “operational” charges revealed late in the flow.
  5. Rental and event add-ons. Mandatory amenity, facility, or administrative fees that no customer can decline.
The economic critique is straightforward: drip pricing defeats comparison shopping. Two sellers can offer the same true price, but the one that hides a third of it in fees looks cheaper in search results and gets the click. That is why enforcement has focused on disclosure timing — not on whether a fee may be charged, but on whether the full mandatory price is shown up front.

The FTC's Junk-Fees Rule

In December 2024 the FTC finalized its Rule on Unfair or Deceptive Fees — widely called the junk-fees rule — which took effect in May 2025. The final rule is narrower than the agency's original proposal: it covers live-event tickets and short-term lodging (hotels, motels, and vacation rentals). Within those industries, the rule requires businesses that display a price to disclose the total price — including all mandatory fees and charges — up front, and to display that total more prominently than any other pricing information.

Government taxes and reasonable shipping charges may be excluded from the up-front total, but they must still be disclosed before the consumer pays. The rule also prohibits misrepresenting the nature or purpose of any fee — for example, labeling a charge as a “tax” or “regulatory fee” when it is really just revenue. Violations can trigger FTC enforcement and civil penalties. For industries outside ticketing and lodging, hidden-fee conduct can still be challenged as an unfair or deceptive practice under Section 5 of the FTC Act and under state law.

California's SB 478 Honest Pricing Law

California moved first and swept broader. Senate Bill 478, effective July 1, 2024, amended the Consumers Legal Remedies Act (CLRA) to make it unlawful to advertise, display, or offer a price for a good or service that is less than the amount the consumer will actually have to pay, excluding only government-imposed taxes and reasonable shipping. The California Attorney General's office calls it the “honest pricing” or “hidden fees” law.

Unlike the FTC rule, SB 478 is not limited to tickets and lodging — it reaches most consumer-facing businesses selling to Californians, from restaurants and delivery apps to event venues and rental platforms. (A follow-on 2024 law carved out restaurants that conspicuously disclose mandatory service charges on menus.) Because SB 478 lives inside the CLRA, it carries the CLRA's private right of action, statutory damages, and attorneys'-fee provisions — which makes it a natural engine for California hidden-fee class actions.

Other Laws Deceptive-Pricing Cases Rely On

Deceptive-pricing class actions rarely rest on a single statute. Alongside the CLRA, California plaintiffs typically plead the Unfair Competition Law (UCL) and the False Advertising Law (FAL), which prohibit unlawful, unfair, or fraudulent business practices and untrue or misleading advertising. Other states have their own consumer-fraud acts with similar prohibitions on deceptive price representations, and several states have enacted their own junk-fee or all-in pricing statutes.

For subscriptions, hidden-fee claims often travel with automatic-renewal claims under ROSCA and state auto-renewal laws — the common thread being that the consumer was charged more, or longer, than the offer disclosed. And the design tricks used to bury fees — pre-checked boxes, countdown timers, fee disclosures hidden behind tooltips — overlap heavily with the interface-manipulation playbook covered in our companion guide to dark patterns.

How Hidden-Fee Class Actions Work

Hidden-fee and ticket-fee class actions follow a recognizable pattern. The named plaintiffs allege that the advertised price was materially lower than the true mandatory price, that the fee disclosure came too late (or was too obscure) to matter, and that they and other buyers were damaged in the amount of the fees — or the difference between what they paid and what the advertising promised. The proposed class is usually everyone who bought the product or ticket through the challenged flow during the class period. Settlements typically refund some or all of the challenged fees, either as cash or as credits.

Two current examples: the New York Renaissance Faire ticket fee settlement pays online ticket buyers who were charged a service fee up to $20, resolving claims that the fees were not properly disclosed — as is typical, without any admission of wrongdoing. And the $975K SpotHero “Map View” settlement resolves California claims that the parking app's map display showed lower prices than users actually paid at checkout — a textbook drip-pricing allegation, brought after SB 478 took effect. Similar cases have produced settlements over movie-ticket convenience fees and event-ticket service fees. As with any class action, an allegation of deceptive pricing is just that — an allegation — until a court rules or the parties settle, and a filed complaint does not mean a claim form exists yet.

Frequently Asked Questions

What is bait-and-switch pricing?

Bait-and-switch is a deceptive sales practice in which a seller advertises a product or price it does not actually intend to sell as advertised — the "bait" — and then steers buyers who respond toward a different, usually more expensive, product — the "switch." Classic signs include refusing to show the advertised item, claiming it is sold out while pushing an upgrade, or disparaging the advertised product. The FTC's Guides Against Bait Advertising treat this as a deceptive practice under the FTC Act, and state consumer-protection statutes prohibit it as well.

What is drip pricing?

Drip pricing is advertising a low headline price and then revealing mandatory add-on charges only later in the purchase flow — resort fees at hotels, service and processing fees on event tickets, convenience fees on online orders. Because the buyer has already invested time in the transaction by the time the full price appears, many complete the purchase anyway. Regulators and consumer class actions treat undisclosed mandatory fees as a form of deceptive pricing, often called junk fees.

What does the FTC junk fees rule require?

The FTC's Rule on Unfair or Deceptive Fees, finalized in December 2024 and effective in May 2025, covers live-event tickets and short-term lodging such as hotels and vacation rentals. Businesses in those industries must disclose the total price — including all mandatory fees — up front and more prominently than any other price, and must not misrepresent the nature or purpose of any fee. Government taxes and reasonable shipping can be excluded from the up-front total but must be disclosed before payment.

What is California's SB 478 honest pricing law?

SB 478, effective July 1, 2024, amended California's Consumers Legal Remedies Act to prohibit advertising, displaying, or offering a price that is less than what a consumer will actually have to pay, excluding government taxes and reasonable shipping. It applies broadly to most goods and services sold to California consumers, so a mandatory service fee, resort fee, or similar charge generally must be baked into the advertised price rather than added at checkout.

Can I join a hidden-fee class action?

If a company settles a hidden-fee or ticket-fee class action and you fall within the class definition — typically people who bought the product or ticket during a set period and paid the challenged fee — you may be able to file a claim once a settlement is approved and a claim process opens. Some hidden-fee settlements require an ID or PIN from an emailed notice; others pay automatically. Check the official settlement website for the class definition, deadline, and claim instructions.

Related Terms

About This Page

General legal-information about bait-and-switch advertising, drip pricing, and junk-fee regulation, not legal advice. OpenClassActions.com is a consumer news site and is not a law firm or a settlement administrator. Statutes, rules, and case law change — the FTC's fee rule and state honest-pricing laws are recent and continue to develop — and how they apply depends on the facts of a particular situation. For controlling texts, see the FTC's Rule on Unfair or Deceptive Fees, Section 5 of the FTC Act, and California Civil Code § 1770 as amended by SB 478. If you think your rights were affected, consult a qualified attorney in your jurisdiction.

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