California’s prohibition on so-called “hidden” or “junk” fees in consumer transactions is set to take effect on July 1, 2024, with potentially wide-ranging ramifications for how prices are displayed or offered to consumers in the Golden State – and the potential for a significant wave of new class action litigation.
The law—often referred to by its bill number, SB 478—amends California’s Consumer Legal Remedies Act (“CLRA”) to restrict the prices and fees businesses can offer to California consumers. The basic prohibition is stated in simple terms: businesses can no longer “advertis[e], display[], or offer[] a price for a good or service that does not include all mandatory fees or charges” to consumers, with limited exceptions such as for sales tax and certain shipping charges. SB 478 § 3 (to be codified at Cal Civ. Code § 1770(a)(29)(A)). But this simple language generates numerous complexities. For example: Are clearly disclosed fees prohibited if not folded into the main price, or just fees not presented to consumers in close proximity (in both location and time) to the primary price? When is a fee “mandatory”? Can fees that are included in a price still be itemized? Continue Reading Outlawing Hide-and-Seek: California’s Prohibition on “Hidden Fees” in Consumer Pricing Set to Take Effect