Report California Hidden "Junk Fees"
Cutter Law is committed to making sure that corporations are held accountable when they rip off Americans by adding on last minute transaction fees that significantly drive up the costs of goods and services beyond the advertised prices.
Recent Update:
Cutter Law’s recent junk fee lawsuits against Avis and Budget featured in the Wall Street Journal.
California Bans Hidden "Junk Fees" Starting July 1, 2024
Effective July 1, 2024, California’s Consumer Legal Remedies Act (“CLRA”) expressly outlaws “junk fees,” banning businesses from [a]dvertising, displaying, or offering a price for a good or service that does not include all mandatory fees” in the initially displayed price.
The CLRA was amended by S.B. 478 in response to growing abusive corporate practices that added on last minute “service fees,” “destination fees,” and “resort fees,” that are really part of the price of the good or service.
“While the fees any individual consumer pays may be modest—often between $20 and a few hundred dollars— the Federal Trade Commission estimates that junk fees cost American consumers tens of billions of dollars each year.” – Wes Griffith, Co-Chair of the Junk Fees Task Force
California’s junk fee ban confirms what every American already knows. When a company advertises a good or service for a certain price, the company has to actually sell it as advertised. This means that if the listed price is $199 for a hotel room or $65 for a concert ticket, that has to be the price for which the customer is actually able to make the purchase.
Listen to Wes Griffith discuss California “junk fees” on KNX in Los Angeles:
Industries Liable for Hidden "Junk Fees" in California
Common examples of these abusive corporate practices include fees charged by:
- Hotels
- Food delivery services
- Online “service” or “convenience” fees, including at online ticket sale platforms (like Ticketmaster)
- “Handling” fees
- Bus companies
Regardless of the industry, the purpose of junk fees is the same—trying to make customers believe the prices are cheaper than they really are to lure in customers.
Hotel Fees
California hotels are now banned from adding on last minute “service fees,” “destination fees,” and “resort fees,” that are really part of the hotel room price. Based on our ongoing investigation, hotel chains—like Sonesta—and vacation rental websites—like AirBnB and VRBO—are among some of the worst potential offenders.
Food Delivery Fees
Food delivery service platforms (like Grubhub and DoorDash) are now banned from adding on “inflation fees,” “benefits fees,” and mandatory gratuity that are not disclosed in the initially advertised price. When a food delivery platform advertises an item for a certain price, it must actually sell the item for the price advertised and not tack on additional mandatory charges.
Online “Service” or “Convenience” Fees
Online ticket sale providers are now banned from adding on last minute “service fees” and other similar “junk fees” that are really part of the price of the good or service purchased online. Based on our ongoing investigation, online ticket sale providers—like Ticketmaster and StubHub—are among some of the worst potential offenders.
“Handling” Fees
Businesses are now banned from excluding all mandatory fees in the first price displayed to customers. While “shipping” charges are exempt from the law, “handling” charges are not, and must be included in the initially advertised price.
Bus Company Fees
Many long distance bus services charge fees on top of the price of the ticket, but do not disclose the fee until late in the purchase process. Based on our ongoing investigation, bus companies like Greyhound and Flixbus are likely in violation of the junk fee ban.
What to Do If You’ve Been Charged a Junk Fee
Consumers can sue companies that violate the junk fee ban. Consumers who sue under the new law may be entitled to get their money back, may receive punitive damages from the business, and are entitled to recover their attorneys’ fees and costs for the lawsuit if they prevail. Lawsuits under the new law may also help stop the abusive junk fee pricing practices going forward, including through injunctions issued by Courts.
The recent change to California’s CLRA and pending changes to federal regulations make the strength of potential legal claims significantly stronger than they once were.
If you have been charged a junk fee, please contact us for a free case review. Even if you were charged a junk fee before July 1, 2024, it is possible that you may have a claim.
Cutter Law Announces Task Force to Tackle Junk Fees in California
To ensure that Californians can take advantage of the junk fee ban, Cutter Law has set up a Junk Fee Task force to represent consumers against the abusive corporate practices.
“We are committed to making sure that corporations are held accountable when they rip off Americans by adding on last minute transaction fees that significantly drive up the costs of goods and services beyond the advertised prices” – Wes Griffith, Co-Chair of the Junk Fees Task Force
Cutter Law is dedicated to pursuing claims on behalf of Americans who have been wronged by greedy corporate practices, and our Junk Fee Task Force has been set up to ensure that consumers have an opportunity to have their legal rights under the CLRA vindicated.
“It’s fitting that we are announcing this joint task force over the Fourth of July weekend. A bedrock principle of this country is a free-market system where competition drives down prices to benefit consumers. Junk fees distort and artificially inflate prices. They are bad for free market competition, they leave Americans holding the check for corporate excess, and the practices need to stop.” – Wes Griffith
Frequently Asked Questions
California’s ban on junk fees under S.B. 478 broadly prohibits the charging of additional mandatory fees beyond the price initially displayed or advertised to the customer. In other words, the junk fee ban requires that the price you see is the price you get.
Below, we address several commonly asked questions about the junk fee ban.
What is California’s junk fee ban?
Effective July 1, 2024, California’s Consumer Legal Remedies Act (“CLRA”) expressly outlaws “junk fees,” banning businesses from “[a]dvertising, displaying, or offering a price for a good or service that does not include all mandatory fees” in the first price displayed to customers.
The CLRA was amended by S.B. 478 in response to growing abusive corporate practices that added on last minute “junk fees” that are really part of the price of the good or service purchased online.
Other names for the junk fee ban include the “Honest Pricing Law” and “Hidden Fees Statute.”
The statute does not change what price a business can charge or what may be included in that cost. The law simply requires that the price listed include all mandatory charges.
I was charged a junk fee before the formal junk fee ban on July 1, 2024, do I still have a claim?
You may!
According to California’s Office of the Attorney General, “[a]dvertising or listing a price that is less than what a consumer will eventually be charged is a form of deceptive advertising that also violates existing state and federal law. Truthful price advertising and listing helps businesses compete fairly on price and allows consumers to make accurate price comparisons.”
In other words, the junk fee ban simply gives consumers a new tool to tackle an already unlawful practice.
Who does the junk fee ban apply to?
The junk fee ban applies to all consumer transactions within the state of California, whether made online or in person, unless expressly exempted. Common industries that the ban applies to include hotels and vacation rental companies, most online transactions, food delivery services, and any “handling” fees.
The law’s exemptions are narrow, but include the true cost of shipping or delivery, government mandated taxes, certain types of financial institutions, and certain federally regulated utilities.
What is the purpose of the junk fee ban?
Put simply, the price Californians see should be the price they pay.
According to California’s Office of the Attorney General, the junk fee ban 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.”
What does the new law require?
The law requires honest pricing. It prohibits businesses from “[a]dvertising, displaying, or offering a price for a good or service that does not include all mandatory fees or charges.”
Can a business comply with this law by advertising a price that is less than what a consumer will actually have to pay, but disclosing that additional fees will be added?
No! According to California’s Office of the Attorney General, “[t]he price listed or advertised to the consumer must be the full price that the consumer is required to pay.”
Still have a question? Request a free case review.
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