From hotels to U-Hauls, businesses are being blasted for 'bait and switch pricing'

Getty images; Tyler Le/BIU-Haul trucks are a fixture of modern American life. They're invisible and ubiquitous at the same time — you don't think about them until you need one, or one's blocking the bike lane, or it's move-in day at the local college. Suddenly, the big white-and-orange vans are impossible to overlook. So is the price tag slapped on the side: "$19.95." In bright green, it's meant to stand out. Except that $19.95 is not what you will actually pay.Truth in Advertising, a watchdog group focused on sketchy advertising and deceptive marketing, filed formal complaints on Monday with the Federal Trade Commission and nearly two dozen state attorneys general, urging them to put a stop to what they described as U-Haul's "bait-and-switch pricing scheme." While the $19.95 emblazoned on the trucks comes with some fine print — it's for in-town moves, and doesn't include mileage and fees — consumers don't always realize ahead of time just how big those little add-ons may wind up being. Plus, the fine print isn't exactly easy to read on a moving vehicle."There's not a consumer on the entire planet who will pay this $19.95 for a U-Haul truck," Laura Smith, TINA.org's legal director, says. "So the price is false."The complaint sent to the FTC says the company "advertises a misleadingly low moving truck rental fee and then adds on a multitude of other fees and charges throughout the reservation and rental process."It's another example of how difficult pricing has become to navigate across the economy. Not only are costs constantly changing, but companies employ tactics such as bait-and-switch pricing and hidden fees to reel people in with one number, only to tack on countless extra charges. By the time a customer gets to the final number they owe, it's nowhere near what they expected. It's not just U-Haul; the switcheroo happens with airlines, hotels, concerts, cable companies, and more. It's so common that many people simply throw up their hands and just accept whatever their impossible-to-decipher receipt says they owe."What it really makes it hard to do is to compare the prices of things, and that's really the biggest harm it does to the market," Rebecca Tushnet, a Harvard law professor who studies false advertising law, tells me. "It leads the whole market to become unreliable and unstable, because you can't really effectively fight back."In reporting this story, I decided to dig up the receipt for my last DIY move where I used a U-Haul, which, thankfully, was back in 2016. Lo and behold, the $19.95 rental rate is listed. So is a bunch of other stuff: $10.32 for the 8 miles I apparently drove, $11 for what looks like insurance, and $1 for an "environmental fee," which U-Haul's website says is "used to support and foster the development and maintenance of sustainable U-Haul business operations," plus taxes. My total wound up being $45.05, more than double the advertised rate for what was, all in all, a short move. At the end, it even lists the total (before taxes) under "Actual Charges."There's not a consumer on the entire planet who will pay this $19.95 for a U-Haul truck.When someone rents a moving truck, U-Haul automatically folds in fees that consumers can't get out of, such as the environmental fee, which immediately pushes the cost above the $19.95 rate. These fees could, in theory, be wrapped into the original price, but instead they're tacked on at the end. There are also mandatory-ish charges, such as insurance, mileage, and tolls, that people may not entirely understand or know whether they need. Many consumers have had the experience of standing at a car or truck rental counter trying to figure out whether they actually need the insurance the agent is trying to sell them on, or if the guy is just trying to up his commission. As consumers go through the U-Haul booking process, they're nudged toward all sorts of extra services and charges, including moving blankets, dollies, and movers. Some of these items are preselected, so consumers have to actively unselect them or scroll to a small-font option to skip."They're not mandatory, but you have to sift through those screens before you actually check out," Smith says.Smith says that consumers have reported a "slew of" other fees they'd been charged by U-Haul — for cleaning, extra mileage, late returns, lost keys, and more — many of which customers disputed as unfair. The problem isn't the price U-Haul is charging, she says, "the problem is how they advertise the price." You may walk in expecting a cheap deal to pick up that couch down the street, and walk out with a multiline receipt that leaves your wallet lighter than you expected.This isn't the first time U-Haul's pricing practices have drawn scrutiny. In 2010, it settled charges brought by the FTC accusing it of inviting its closest competitor, Avis Budget Group, to collude to fix prices on one-way truck rentals."Here we are in 2025, and obviously it's a different kind of deceptive pricing issue, but nonetheless, continuing to engage in deceptive marketing or in deceptive pricing," Smith tells me.The fees appear to be a money-maker for U-Haul. In its third fiscal quarter, ending in December, the company reported a $38.8 million increase in revenue for self-moving equipment rental, a 4.6% jump from the year before. Per-transaction revenue increased for both its in-town and one-way markets.U-Haul didn't respond to requests for comment for this story. It did not admit wrongdoing in its 2010 settlement with the FTC.Moving is wildly stressful. It's always harder and takes longer than you think and, often, more expensive than you expect. Moving companies' estimates can be eye-popping. Truck rentals such as U-Hauls are positioned as an alternative, cheaper option — assuming you have some very nice friends who are willing to help — but their costs can get unwieldy fast. In such high-stress situations, it's extra difficult for customers to compare prices and police fees."They invest time, energy, and effort in trying to rent a moving truck, and by the time they discover the true price of the rental, they've already sunk their time and energy into getting the truck," Smith says. When you show up at the rental lot the day of your move and realize that $19.95 is actually $60, are you really going to change course? It's unlikely.This is the kind of stuff companies that engage in bait-and-switch and drip pricing, where they show one initial price and gradually add other fees and charges on, depend on: consumers getting so confused, tired, or distracted that they don't have the wherewithal to push back."People sort of end their searches very early," Tushnet says. "Even if it's more than they expect to pay, and even if there are better alternatives out there, they've just exhausted their time to look, and so they end up paying the extra."Companies do it because they try to make things seem as affordable as possible.Less-than-straightforward advertising strategies around pricing are a staple of many industries, including rental cars, plane tickets, and live entertainment. Some industries argue that these types of setups are beneficial for consumers. Airlines, for example, say all the optional add-on fees make it possible for passengers to choose their own adventures in terms of amenities and comfort. Banks say overdraft and late fees are fair when consumers screw up and discourage them from overspending in the first place. In other industries, it's more common for companies to pass the buck and say it's not really their fault. Rental car services aren't the only ones tacking on extra fees and taxes to their services — airports, states, and municipalities do it, too. When one asks who's responsible for concert ticket fees, all parties involved point fingers. Whatever the justification, the benefit for companies is clear: It's a way to get customers in the door."Companies do it because they try to make things seem as affordable as possible, they try to lure you in with this super-low price even if they know darn well that the total is going to be much higher than with all the mandatory fees," says Teresa Murray, the consumer watchdog director for the US Public Interest Research Group, an advocacy group. "Companies don't try hard enough to be transparent."As consumers, we've almost become accustomed to the idea that we won't really know what things are going to cost until we're about to swipe our credit cards or sign on the dotted line. We try our best to comparison shop, but it's hard when the actual costs aren't listed up front. You can mentally bake in some fees or a little markup, but how much that's going to be is tough to gauge. Ultimately, consumer advocates say these practices often lead to diminished competition and consumers paying higher prices.There have been some efforts to reverse the trend on a government level. On May 12, a new FTC rule on deceptive or unfair fees is set to take effect. It bars bait-and-switch and other misleading pricing tactics on live events and short-term lodging such as hotels, and requires businesses in those sectors to disclose total pricing up front."If that kind of thing applied to a bunch of other industries, like we were hoping, then we wouldn't have the problems like what we're talking about," Murray says. She added that some businesses are taking it upon themselves to be more forthcoming about their prices. More all-in pricing would help consumers compare deals and mean more honest competition for people's dollars. But don't hold your breath on an economy-wide price transparency transformation out of the goodness of corporate America's heart. Murray offered some tips on how consumers can protect themselves: Read the fine print, ask questions, don't be afraid to walk away, and do your transactions on a credit card so you can dispute the charges later if you need. It's smart, practical advice. It's also a reminder that, as consumers, we always have to be on defense.As for U-Haul, it's not clear whether the FTC or state regulators will take action. Truth in Advertising has heard from a couple of states that said they'd look into it, which isn't unusual since potential regulatory investigations are generally kept confidential. In the meantime, the next time you're renting a moving truck, know that $19.95 sounds too good to be true because it is. You'll very likely be met with more charges and fees, plus the pizza and beer you have to buy for your friends as you collectively realize you're too old to schlep that couch up a flight of stairs.Emily Stewart is a senior correspondent at Business Insider, writing about business and the economy.Read the original article on Business Insider

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