OAKLAND — California Attorney General Rob Bonta today, with Senator Bill Dodd and Senator Nancy Skinner, introduced Senate Bill 478 (SB 478), landmark legislation seeking to prohibit in California the practice of hiding mandatory fees. The use of hidden fees and junk fees is a deceptive advertising practice in which a seller uses an artificially low headline price to attract a customer before revealing additional charges later in the buying process. Sellers often hide these additional, mandatory charges by using small type, vague descriptions or misleading wording such as “service fees,” by bundling them with legitimate charges like taxes, or revealing them clearly only after the consumer has invested time in the transaction. The legislation — the first bill of its type across the state — would prohibit advertising a price for a good or service that does not include all required charges other than taxes and fees imposed by a government.
“Transparency and full disclosure in pricing are crucial for fair competition and consumer protection,” said Attorney General Rob Bonta. “Unfortunately, from car rental and hotel fees to concert ticket service charges, these hidden costs have been normalized in the purchasing process. Today’s legislation seeks to hold businesses accountable for their deceptive and misleading practices at the expense of the financial security of millions of Californians. My office will continue to work tirelessly to ensure an equal, level playing field and demand transparency across the board for the protection of California consumers.”
“Californians are sick and tired of dishonest fees being tacked on to seemingly everything,” said state Senator Bill Dodd. “It’s an underhanded trick to boost corporate profits at the expense of those who can least afford it. Working with Attorney General Bonta and Senator Skinner, we’re going to put an end to these unfair practices that President Biden has so righteously shined a bright light on. It is time we put the consumer first and create a level playing field for those businesses who are good actors and advertise the real price upfront.”
“Californians are fed up with being bombarded by junk fees that, more and more, are making it unaffordable to attend a concert, go to a sporting event, take a vacation, or stay at a hotel,” said state Senator Nancy Skinner. “I’m proud to join with Attorney General Bonta and Senator Dodd in heeding President Biden’s call to end the scourge of hidden junk fees. Our legislation will bring transparency to the true cost of goods and services in our state so that Californians know upfront exactly how much they’re being asked to pay.”
Although hidden fees historically have been more common in specific industries such as the travel and lodging industry, the practice is spreading. Deceptive mandatory fees can now be found in a variety of other contexts, such as lodging websites, rental car companies, airport parking, the ticketing industry, restaurant service fees and food-delivery charges, telecom and internet service providers, and the automobile industry. These fees, when mandatory, are nothing more than a deceptive way of hiding the true cost of a good or service.
California Attorney General Rob Bonta is committed to maintaining a fair and transparent marketplace for all Californians. In December 2022, Attorney General Bonta joined a bipartisan coalition in urging the U.S. Department of Transportation to strengthen proposed regulations to increase transparency in the airline industry, address hidden fees, reduce the rate of airline cancellations, and provide meaningful relief to airline consumers whose flights have been canceled or significantly delayed.
A draft of the proposed legislation is available here.
