California Governor Signs Law Banning Hidden Fees
California Governor Gavin Newsom has signed into law SB 478, a bill that prohibits the use of hidden fees in purchases. The legislation, proposed by California state Sen. Bill Dodds, aims to combat deceptive business practices by ensuring that all charges are upfront and transparent to consumers. The new regulations will go into effect on July 1, 2024.
This move comes as a response to the prevalence of hidden fees in various sectors, such as ticket sales and hotel bookings. According to a survey conducted by Consumer Reports, an estimated 85% of Americans have encountered these hidden charges.
The Consumer Financial Protection Bureau has also reported that Americans collectively spend at least $29 billion annually on junk fees. These additional charges take advantage of consumers’ psychological biases and often lead them to pay more without exploring cheaper alternatives.
President Joe Biden has been focused on addressing this issue since 2022, recognizing the frustration of consumers who feel taken advantage of by these fees. In July, Biden unveiled measures targeted at tackling junk fees in the rental housing market, emphasizing the need to protect individuals from unfair charges.
Source: California says goodbye to junk fees — no more hidden charges that aren’t advertised up-front
