Does the headline price have to include mandatory monthly fees?

When the headline price implies it is the total, the FTC has alleged that leaving out mandatory fees is deceptive. Count I of the Invitation Homes complaint alleges that the advertised monthly price was represented as the total monthly amount but excluded fees consumers must pay. Timing matters to that theory, because the complaint alleges that applicants learned the total only when they received the lease, after they had already paid nonrefundable application fees.

Is a fee disclosure behind a hyperlink or in small print enough?

The FTC has alleged that it is not enough when the seller knows consumers will not see the disclosure. The Invitation Homes complaint alleges that the company buried general fee information behind hyperlinks it knew consumers would not see. The complaint goes further and alleges that whatever fee information the company did include was inadequate in content, presentation, proximity, prominence, or placement, so people were unlikely to see or understand it.

What happens when a customer who was quoted one bundled price cancels?

The customer may expect every charge to stop, and the Benefytt complaint alleges the defendants kept billing for ancillary products after the core plan was canceled. An email quoted in the complaint shows a senior Benefytt executive acknowledging that members know only the bundled price quoted to them and, when they call to cancel, expect all policies and charges to stop. The result, according to the complaint, is that the defendants continued to bill these consumers for the ancillary products even after the core product had been canceled.

Offer StructureLegal test

Bundled price

Q: Can a seller call a separately charged add-on "included" in the bundle?

The FTC has alleged that doing so is deceptive when the add-on carries its own fee. Count II of the Benefytt complaint alleges the defendants represented that a product was included at no additional cost when the consumer was charged a separate fee for each product. The factual allegations behind that count describe Internet purchasers being told that ancillary products were "included" with another item when they were separate products with separate fees.

Berkeley Robinson, Managing Attorney at Robinson Law Firm PLLC

Author

Berkeley Robinson, Esq.

Managing Attorney, Robinson Law Firm PLLC

Berkeley has served as the go-to counsel for many scaling businesses in a transactional and litigation management capacity. Before becoming an attorney, Berkeley grew sales teams, ran online marketing campaigns, and did everything else an entrepreneur does—and still does today as the founder of two online businesses.

Definition

A bundled price is a single price quoted for two or more products or services sold together. Source: Complaint Counsel's Second Set of Requests for Admission (24-62), In re Intel (FTC)

Because the buyer may see only that one figure, the buyer may not know what separate components, or what separate fees, sit behind it. Source: FTC v. Benefytt, Complaint for Permanent Injunction, Monetary Relief, and Other Relief

Key legal rules

A bundled price is a marketing claim, so it has to be truthful and cannot hide charges. The main rules are these:

Section 5(a) of the FTC Act prohibits “unfair or deceptive acts or practices in or affecting commerce.” Source: FTC v. Invitation Homes Inc., Complaint for Permanent Injunction, Monetary Judgment, and Other Relief
Misrepresentations or deceptive omissions of material fact constitute deceptive acts or practices prohibited by Section 5(a) of the FTC Act. Source: FTC v. Invitation Homes Inc., Complaint for Permanent Injunction, Monetary Judgment, and Other Relief
Acts or practices are unfair under Section 5 if they cause or are likely to cause substantial injury to consumers that consumers cannot reasonably avoid themselves and that is not outweighed by countervailing benefits to consumers or competition. Source: FTC v. Invitation Homes Inc., Complaint for Permanent Injunction, Monetary Judgment, and Other Relief
The Telemarketing Sales Rule prohibits sellers and telemarketers from causing billing information to be submitted for payment, directly or indirectly, without the express informed consent of the customer. 16 C.F.R. § 310.4(a)(7). Source: FTC v. Benefytt, Complaint for Permanent Injunction, Monetary Relief, and Other Relief

For the sake of space, this page lists only the primary rules related to this term that most businesses should follow. More may apply to your situation, and your unique facts affect how they apply.

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Why these rules exist

A quoted price is the number a buyer uses to decide whether to go forward, so a price that leaves out mandatory components lets the seller collect the buyer's commitment before the buyer knows the real cost. The Invitation Homes complaint alleges exactly that sequence: people paid nonrefundable application fees at the advertised rent and learned the higher monthly price later. Source: FTC v. Invitation Homes Inc., Complaint for Permanent Injunction, Monetary Judgment, and Other Relief

The same omission defeats comparison shopping, because a headline price that excludes mandatory fees cannot be set fairly against a competitor's price. Source: FTC v. Invitation Homes Inc., Complaint for Permanent Injunction, Monetary Judgment, and Other Relief

The unfairness standard reaches charges a buyer could not have avoided: an act or practice is unfair if it causes or is likely to cause substantial injury that consumers cannot reasonably avoid and that is not outweighed by countervailing benefits to consumers or competition. Source: FTC v. Invitation Homes Inc., Complaint for Permanent Injunction, Monetary Judgment, and Other Relief

Enforcement examples

FTC v. Invitation Homes Inc. (single-family home rentals)

Complaint for Permanent Injunction, Monetary Judgment, and Other Relief

The FTC's complaint alleges that Invitation Homes advertised a monthly rent while charging a mandatory “Lease Easy” fee bundle on top of it. The complaint describes that bundle as adding $60 per month, or $720 over a one-year lease, and as mandatory for the substantial majority of the company's homes. Source: FTC v. Invitation Homes Inc., Complaint for Permanent Injunction, Monetary Judgment, and Other Relief The gap between the advertised price and the real monthly price, the complaint says, was typically $40–$45 in 2021 and has grown to $60 to $145. Source: FTC v. Invitation Homes Inc., Complaint for Permanent Injunction, Monetary Judgment, and Other Relief The listing itself is alleged to have made the gap hard to see: the fee language sat in the fourth paragraph in text less prominent than the rent, and it did not clearly explain that the fee was a mandatory monthly charge on top of the advertised price. Source: FTC v. Invitation Homes Inc., Complaint for Permanent Injunction, Monetary Judgment, and Other Relief The leases are alleged to have done the same thing: in some, the cover page listed the air filter delivery charge as $0.00 while a buried addendum imposed a $9.95 monthly fee. Source: FTC v. Invitation Homes Inc., Complaint for Permanent Injunction, Monetary Judgment, and Other Relief The complaint adds that the company's own marketing department circulated a listing mockup that would have included all mandatory fees in the advertised price, under the file name “Bundled Price Transparency and Rent Calculator.” Source: FTC v. Invitation Homes Inc., Complaint for Permanent Injunction, Monetary Judgment, and Other Relief

Outcome. Count I of the complaint alleges that the advertised monthly leasing price was not the total monthly amount consumers would pay, because it did not include monthly fees they must pay. Source: FTC v. Invitation Homes Inc., Complaint for Permanent Injunction, Monetary Judgment, and Other Relief Count II alleges that the company failed to disclose, or disclose adequately, that the advertised price left those fees out. Source: FTC v. Invitation Homes Inc., Complaint for Permanent Injunction, Monetary Judgment, and Other Relief For these alleged violations the FTC sought a permanent injunction, monetary relief, and other relief. Source: FTC v. Invitation Homes Inc., Complaint for Permanent Injunction, Monetary Judgment, and Other Relief

FTC v. Benefytt (short-term medical plans with bundled ancillary products)

Complaint for Permanent Injunction, Monetary Relief, and Other Relief

The FTC's complaint alleges that the Benefytt defendants bundled and charged consumers for ancillary products such as association dues, life and accident insurance, telemedicine, and fitness programs alongside their core health plans. Source: FTC v. Benefytt, Complaint for Permanent Injunction, Monetary Relief, and Other Relief One web example shows how the price was presented: a short-term medical plan was offered for "$42.52 per month," with the word "fees" in a significantly smaller and lighter font next to the price. Source: FTC v. Benefytt, Complaint for Permanent Injunction, Monetary Relief, and Other Relief Once the consumer clicked “Select,” the policy summary added $19.99 for "Association Dues" and $9.95 for "Telemedicine Benefits," which the complaint says the consumer never selected and could not decline, so the plan cost nearly $30 more per month, seventy percent above the advertised price. Source: FTC v. Benefytt, Complaint for Permanent Injunction, Monetary Relief, and Other Relief The complaint also alleges that Internet purchasers were told ancillary products were "included" with another item when they were separate products with separate fees, and that single-line or grouped billing concealed the separate charges. Source: FTC v. Benefytt, Complaint for Permanent Injunction, Monetary Relief, and Other Relief Source: FTC v. Benefytt, Complaint for Permanent Injunction, Monetary Relief, and Other Relief

Outcome. Count II of the complaint alleged that the defendants represented that a product was included at no additional cost with the purchase of another product, when the consumer was charged a separate fee for each product. Source: FTC v. Benefytt, Complaint for Permanent Injunction, Monetary Relief, and Other Relief Count III alleged unfairness, on the theory that the defendants charged consumers for products or services for which the consumers had not provided express, informed consent. Source: FTC v. Benefytt, Complaint for Permanent Injunction, Monetary Relief, and Other Relief

In re Intel (microprocessors and chipsets sold at a kit price)

Complaint Counsel's Second Set of Requests for Admission (24-62)

In this competition matter, Complaint Counsel asked Intel to admit that it offered computer makers (OEMs) a price for an Atom CPU and an Intel chipset as a kit, in which the OEM purchased both for one price. Source: Complaint Counsel's Second Set of Requests for Admission (24-62), In re Intel (FTC) Counsel also asked Intel to admit that the kit price was contingent on the OEMs shipping computers that contained both the CPU and the chipset, and that for some sales the kit price was less than the price of the standalone Atom CPUs. Source: Complaint Counsel's Second Set of Requests for Admission (24-62), In re Intel (FTC) Source: Complaint Counsel's Second Set of Requests for Admission (24-62), In re Intel (FTC)

Outcome. Complaint Counsel sought admissions that Intel offered OEMs a contingent kit price for an Atom CPU and chipset, and that for some sales that kit price was less than the standalone Atom CPU price. That was counsel’s theory of the kit pricing, not a Commission finding or an order. Source: Complaint Counsel's Second Set of Requests for Admission (24-62), In re Intel (FTC)

Exposure

The complaint against Invitation Homes sought a permanent injunction, monetary relief, and other relief under Sections 5(m)(1)(A), 13(b), and 19 of the FTC Act. Source: FTC v. Invitation Homes Inc., Complaint for Permanent Injunction, Monetary Judgment, and Other Relief The complaint also put a figure on what the allegedly hidden fees brought in: it alleged that from 2021 to June 2023 the company charged consumers over $60 million in Lease Easy fees, and that since 2019 people have paid more than $18 million in application fees for listings that were deceptively priced. Source: FTC v. Invitation Homes Inc., Complaint for Permanent Injunction, Monetary Judgment, and Other Relief Source: FTC v. Invitation Homes Inc., Complaint for Permanent Injunction, Monetary Judgment, and Other Relief

Both complaints also pleaded what the companies knew, which is part of how an advertised-price case is built. The Invitation Homes complaint cited an internal slide deck telling employees to “only disclose [the Lease Easy bundle] fee on website pages and other marketing collateral when critical,” and an executive's comment that “we can’t show all additional fees, so we don’t want to show any.” Source: FTC v. Invitation Homes Inc., Complaint for Permanent Injunction, Monetary Judgment, and Other Relief The Benefytt complaint, for its part, alleged that bundled ancillary sales generated tens of millions of dollars in annual revenue and that the defendants understood they could fix the problems by changing their sales, billing, and cancellation practices but repeatedly chose not to, in order to maintain revenues and profits. Source: FTC v. Benefytt, Complaint for Permanent Injunction, Monetary Relief, and Other Relief Source: FTC v. Benefytt, Complaint for Permanent Injunction, Monetary Relief, and Other Relief

FAQs

1.Complaint Counsel's Second Set of Requests for Admission (24-62). Complaint Counsel's Second Set of Requests for Admission (24-62), In re Intel (FTC)See also Complaint for Permanent Injunction, Monetary Relief, and Other Relief. FTC v. Benefytt, Complaint for Permanent Injunction, Monetary Relief, and Other Relief
2.Complaint for Permanent Injunction, Monetary Relief, and Other Relief. FTC v. Benefytt, Complaint for Permanent Injunction, Monetary Relief, and Other Relief
3.Complaint for Permanent Injunction, Monetary Judgment, and Other Relief. FTC v. Invitation Homes Inc., Complaint for Permanent Injunction, Monetary Judgment, and Other Relief