Hidden fees, which sellers use to mislead customers with an artificially low headline price before imposing additional unavoidable charges later in the buying process, will no longer be allowed in California.
Gov. Gavin Newsom signed into law Senate Bill 478 (SB 478) that will ban hidden fees, or “junk fees,” in the state starting on July 1, 2024, California Attorney General Rob Bonta said in a news release Saturday.
“These deceptive fees prevent us from knowing how much we will be charged at the outset. They are bad for consumers and bad for competition. They cost Americans tens of billions of dollars each year,” Bonta said.
Bonta added that these fees “hit families who are just trying to make ends meet the hardest.”
“And, because a growing list of websites, apps, and brick-and-mortar businesses are using them, they penalize companies that are upfront and transparent with their prices,” Bonta said. “With the signing of SB 478, California now has the most effective piece of legislation in the nation to tackle this problem.”
The legislation will prohibit companies from advertising a price for a good or service that does not include all required charges other than taxes and fees imposed by a government, according to state officials.
“With Gov. Newsom’s signing of SB 478, Californians will know up front how much they’re being asked to pay, and no longer be surprised by hidden junk fees when buying a concert or sports ticket or booking hotel rooms for their family vacation,” Senator Nancy Skinner (D-Berkeley) said.