SACRAMENTO – Gov. Gavin Newsom has signed landmark legislation from Sen. Bill Dodd, D-Napa, in partnership with Attorney General Rob Bonta and Sen. Nancy Skinner, D-Berkeley, to outlaw hidden charges on purchases – also known as junk fees — ensuring consumers are not exposed to deceptive business practices that add unfair costs.
“With the governor’s signing of this historic bill, we can finally take aim at dishonest junk fees that are tacked onto seemingly everything – from online concert tickets to hotel reservations,” said Sen. Dodd. “Now we can put the consumer first and create a level playing field for those businesses that advertise the real price, up front. “I appreciate everyone who worked to end these dishonest charges that boost corporate profits at the expense of those who can least afford it.”
In his State of the Union address, President Biden called out junk fees applied to an array of transactions involving banks, ticket vendors, airlines and online sellers. By one estimate, 85% of Americans have paid hidden fees totaling $28 billion per year. California, which has fifth largest economy in the world and the nation’s largest population, pays an outsized share. The president proposed federal action by numerous federal agencies to address issues within their subject matter and regulatory authority.
At the state level, Sens. Dodd and Skinner, along with Attorney General Bonta, introduced Senate Bill 478, which would expand on the White House proposal and put the Golden State at the forefront of banning these secretive fees, regardless of industry sector. The bill would expressly prohibit the pervasive and deceptive practice of advertising a certain price and then adding on mandatory charges that are controlled by the business. Companies that fail to comply with the new rules could be subject to steep financial penalties.
SB 478 received broad support from consumer groups and legislators before being signed by the governor.
“Today, California is eliminating hidden fees,” said Attorney General Rob Bonta. “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. They 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. With the signing of SB 478, California now has the most effective piece of legislation in the nation to tackle this problem. The price Californians see will be the price they pay. I am deeply grateful to Sens. Dodd and Skinner, the authors of SB 478, for their commitment to protecting consumers.”
“California sent a clear message today: The days of bait-and-switch pricing practices are over,” said Sen. Nancy Skinner, D-Berkeley. “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 Bill Dodd represents the 3rd Senate District, which includes all or portions of Napa, Solano, Yolo, Sonoma, Contra Costa, and Sacramento counties. You can learn more about the district and Senator Dodd at www.sen.ca.gov/dodd.
Attorney General Bonta’s Sponsored Bill to Ban Hidden Fees in California Signed into Law
OAKLAND — California Attorney General Rob Bonta today issued a statement in response to Senate Bill 478 (SB 478), a bill that he sponsored, being signed into law by Governor Gavin Newsom. Coauthored by Senator Bill Dodd (D-Napa) and Senator Nancy Skinner (D-Berkeley), the legislation will prohibit hidden fees (also called ‘junk fees’) in California beginning on July 1, 2024. Hidden fees are fees in which a seller uses an artificially low headline price to attract a customer and usually either discloses additional required fees in smaller print, or reveals additional unavoidable charges later in the buying process.
“Today, California is eliminating hidden fees,” said Attorney General Rob Bonta. “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. They 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. With the signing of SB 478, California now has the most effective piece of legislation in the nation to tackle this problem. The price Californians see will be the price they pay. I am deeply grateful to Senators Dodd and Skinner, the authors of SB 478, for their commitment to protecting consumers.”
“With the governor’s signing of this historic bill, we can finally take aim at dishonest junk fees that are tacked onto seemingly everything – from online concert tickets to hotel reservations,” said Senator Bill Dodd. “Now we can put the consumer first and create a level playing field for those businesses that advertise the real price, up front. I appreciate everyone who worked to end these dishonest charges that boost corporate profits at the expense of those who can least afford it.”
“California sent a clear message today: The days of bait-and-switch pricing practices are over,” said Senator Nancy Skinner. “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.”
After announcing that he was sponsoring SB 478 in February 2023, Attorney General Bonta urged the California Legislature to approve the legislation in March 2023, heeding the call from the Biden-Harris Administration and the Consumer Financial Protection Bureau for states to better address the nationwide concern of hidden fees. In May 2023, he held a press conference in San Diego to highlight the bill’s importance.
Deceptive price advertising is a significant problem facing consumers that appears to be proliferating in more and more sectors of the economy. Hidden required fees are now charged for a variety of goods and services, such as lodging, tickets for live events, and restaurants and food delivery. These fees, when mandatory, are a deceptive way of hiding the true price of a good or service.
The text of the legislation is available here.
Previous Stories
- Sept. 12: Assembly Approves Sen. Dodd’s ‘Junk Fees’ Bill
- July 12: Assembly Committee Approves Sen. Dodd’s ‘Junk Fees’ Bill
- June 1: Senate Approves Sen. Dodd’s ‘Junk Fees’ Bill
- May 17: AG Bonta Calls for California Legislature to Ban Hidden Fees
- May 1: Committee Approves ‘Junk Fees’ Bill
- Feb 14: Sen. Dodd, AG Bonta and Sen. Skinner Propose Ban on Hidden ‘Junk Fees’
