New law makes junk fees illegal in California
A lot of attention has recently been focused on so-called “junk fees,” hidden fees that often take consumers by surprise in the final stages of a transaction. A new law from the California Legislature, which was recently signed by Governor Gavin Newsom have now made such “junk fees” illegal in the State of California.
Junk fees came into prominent national attention with complaints from concert goers against ticket sellers, regarding vague service fees, processing fees, and convenience fees that jack up the costs of concert tickets beyond their original advertised price. Large hotel chains have also been criticized for vague resort fees and other surcharges that significantly inflate the advertised nightly rates for hotel stays. The practice of such hidden or surprise fees seems to have become more common in recent years, with anecdotal accounts pointing to similar practices in the car rental, entertainment and hospitality industries.
On October 7, 2023, Governor Newsom signed into law Senate Bill 748, which prohibits “offering a price for a good or service that does not include all mandatory fees or charges other than taxes or fees imposed by a government on the transaction.” The new law, which will go into effect on July 1, 2024, requires that businesses disclose all fees upfront.
This directly addresses the California Legislature’s main criticism of junk fees, namely, that it is a form of deceptive, bait-and-switch advertising that actively hides the true cost of a transaction until it is too late to back out. California Attorney General Rob Bonta is a strong supporter of the bill, noting at its introductory conference “how frustrating it is to get to the checkout and find out something advertised at one price actually costs much, much more.”
The Attorney General argued at the bill’s introductory conference that junk fees are “bad for consumers and bad for competition,” and that “[t]he prices advertised should be the price you pay.” The consumer advocacy group CALPIRG agrees, noting in a Los Angeles Times interview that “[w]ithout knowing the true price of a product or service upfront, the process of comparison shopping becomes nearly impossible.”
Starting July 1, 2024, businesses offering goods and services for sale will have to be much more transparent with any fees they seek to charge California consumers. With
open disclosures, consumers can better see the real costs of products or services that they pay, and ultimately can make well-informed decisions.
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The opinions, beliefs and viewpoints expressed by the author do not necessarily reflect the opinions, beliefs and viewpoints of the Asian Journal, its management, editorial board and staff.
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The Law Offices of C. Joe Sayas, Jr. welcomes inquiries about this topic. All inquiries are confidential and at no cost. You can contact the office at (818) 291-0088 or visit www.joesayaslaw.com. [For more than 25 years, C. Joe Sayas, Jr., Esq. successfully recovered wages and other monetary damages for thousands of employees and consumers. He was named Top Labor & Employment Attorney in California by the Daily Journal, consistently selected as Super Lawyer by the Los Angeles Magazine, and is a past Presidential Awardee for Outstanding Filipino Overseas.]
(Advertising Supplement)