[COLUMN] Junk fees are illegal in California 

A lot of attention has 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 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. These would include vague items like service fees, processing  or handling 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 478, 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.”

At the the bill’s introductory conference. it was argued 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. The law  is intended to specifically prohibit drip pricing, which involves advertising a price that is less than the actual price that a consumer will have to pay for a good or  service.

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.]

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