29 June 2024
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Understanding California’s Landmark Junk Fee Law
Revisions to the Consumer Legal Remedies Act (CLRA)
Transparent pricing bans hidden fees and drip pricing
by
Jim Butler
Partner & Chair, JMBM’s Global Hospitality Group®
Mark S. Adams
Hotel Dispute Lawyer, Partner & Senior Member
JMBM’s Global Hospitality Group®
First, the nomenclature of the forbidden practices, then the names for the law, a summary of the latest events, and details of the final California Junk Fee Law. In this article, we will focus on the changes to the California Civil Code (CC), and particularly CC Section 1770) of the Consumer Legal Remedies Act (CC 1750, et eq.).
The bottom line: As of July 1, 2024, California’s new Junk Fee Law is a comprehensive transparency pricing law that eliminates hidden mandatory fees. It applies to all businesses in all industries, except for a few specific exceptions. Restaurants are exempted if they meet certain conditions. Restaurants may find compliance trickier than apparent at first glance, and even a modest consumer backlash for this special exemption may be harmful.
CA Governor signs SB 1524’s new Junk Fee Law with “Restaurant Exemption” (if certain tests are met). SB 478, SB 1524, and AB 537 all go effective July 1, 2024. Unfair business practices redefined in CC 1770.
California bans fees and practices known by many names — junk fees, hidden fees, mandatory fees, drip pricing, surcharges, resort fees, unfair and deceptive practices, bait and switch, and consumer fraud.
Names for the new 2024 California Junk Fee Law
There are so many names for the California law that is making big changes, primarily to Civil Code Section 1770. It may be helpful to list the most common names, which include:
- Consumer Legal Remedies Act (CLRA)
- California Junk Fee Law
- California Honest Pricing Law
- California Hidden Fees Statute
- California Transparency Law
- California SB 478
- California SB 1524
- California CC 1770
- California Unfair Business Practices
- California Unfair Competition Act
- The price you see is the price you pay
Don’t forget AB 537 and its $10,000 civil penalties.
In addition to the amendments to California CC 1770, another Junk Fee law effective July 1, 2024, was introduced by Assemblyman Berman. He had a bad experience with a hotel “resort fee” he encountered in his private life. It led him to introduce the new law which adds a new Section 17586.6 to the California Business and Professions Code (B&P Code).
It is nicknamed the California Resort Fee Bill. It requires upfront price disclosure on first contact with consumers of all mandatory fees for all hotels, motels, and other short-term lodging rentals for less than 30 days. It carries a civil penalty of not more than $10,000 per violation. It extends to any advertisement, display, or offer of either from or into California.
It is also referred to as B&P Code Section 17586.6, and the Transparency in Short-Term Lodging Prices Act. CONTINUE READING →