A new law signed by California Gov. Gavin Newsom Oct. 7 will eliminate “junk fees” added to the cost of tickets, hotels, or other purchases.
“Today, California is eliminating hidden fees,” Mr. Bonta said in a statement following the governor’s decision to sign the legislation. “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.”
Mr. Bonta estimated junk fees cost Americans tens of billions of dollars each year.
“They hit families who are just trying to make ends meet the hardest,” he said.
A growing list of websites, apps, and businesses are using the fees, he added.
The bill passed the Assembly Sept. 11 on a party-line vote of 60–14, with some members of both parties electing not to vote on the measure. It similarly passed the Senate May 31 with a vote of 31–3, with three senators abstaining.
The hidden fees, sometimes called “drip fees,” grabbed national attention when President Joe Biden mentioned them at his State of the Union address in February. The pricing schemes are seen as unfair and unlawful business practices.
The extra fees have historically been used in the travel and lodging industries, but the practice is spreading.
The fees can now be found in various areas of the market, ranging from car rentals, airport parking, event ticketing, restaurant service fees, and food delivery charges.
Internet service providers and the automobile industry are also using hidden fees more often, according to the bill’s sponsors.
The new law specifically targets price transparency by making it illegal for anyone to advertise, display, or offer a price for a good or service that does not include all mandatory fees or charges, other than government taxes or fees and specified shipping costs.
