WHAT IF I WAS CHARGED A HIDDEN FEE?
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In recent years there has been a surge in the number of businesses tacking on additional fees in the purchasing process. The White House estimates that those so called “junk fees” costs consumers more than $65 billion every year. Junk fees can make it hard for consumers to effectively compare prices. Further, those junk fees can burden already strained family finances and leave some consumers feeling stressed or frustrated.
California’s consumers are not without options. California’s False Advertising Law (the “FAL”), California Business and Professions Code, § 17500, prohibits the dissemination of any information “which is untrue or misleading, and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading.” Likewise, California’s Unfair Competition Law (“UCL”), California Business & Professions Code § 17200, forbids “any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising.”
These statutes are complemented by California’s Legal Remedies Act (the “CLRA”), California Civil Code, §§ 1750-1784. Section 1770(a)(9) makes it unlawful for businesses to advertises “goods or services with intent not to sell them as advertised.” Likewise, Section 1770(a)(16) prohibits “representing that the subject of a transaction has been supplied in accordance with a previous representation when it has not.”
Additionally, starting July 1, 2024, California’s new “Honest Pricing Law” or “Hidden Fee Statute,” Senate Bill 478 goes into effect. That statute will amend the CLRA to prohibit businesses from advertising or listing prices for goods or services that do not include all required fees or charges other than certain government taxes and shipping costs. Specifically, section 1770(a)(29) will state that “advertising, displaying, or offering a price for a good or service that does not include all mandatory fees or charges” is unlawful. Exceptions include: “(i) taxes or fees imposed by a government on the transaction” and “(ii) postage or carriage charges that will be reasonably and actually incurred to ship the physical good to the consumer.”
California’s Attorney General explains that the “law applies to the sale or lease of most goods and services that are for a consumer’s personal use. For example, it applies to event tickets, short-term rentals, hotels, restaurants, and food delivery, just to name a few prominent industries.” Importantly, the “law does not apply to the purchase or lease of goods or services for commercial use, or to certain other specified transactions and industries that are already subject to other laws governing pricing.” Indeed, section 1770(a)(29)(C) will explicitly exclude certain disclosures, such as those required by the Truth in Savings Act, the Electronic Fund Transfer Act, and the Home Ownership and Equity Protection Act, amongst others.
In light of that statutory framework, California’s consumers may have recourse if they purchased a product advertised at a price that later changed over the course of the purchasing process with the addition of fees and charges. Any consumer considering legal recourse should consult a qualified attorney who can evaluate the applicable laws, relevant legal developments, and specific facts of a given case.
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