SAY GOODBYE TO HIDDEN JUNK FEES – What California’s New Honest Pricing Law (SB 478) Means for You
Starting July 1, 2024, California's new "Honest Pricing Law" or "Hidden Fees Statute" (technically named SB 478) will protect California consumers from deceptive pricing practices. This law mandates that businesses include all mandatory fees and charges in their advertised prices, ensuring transparency and fairness.
In the words of the California Attorney General:
“THE PRICE A CALIFORNIAN SEES SHOULD BE THE PRICE THEY PAY.”
What the Law Entails
The "Hidden Fees Statute" amends the California Consumers Legal Remedies Act (CLRA), a powerful tool designed to protect consumers against unfair and deceptive business practices. SB 478 aims to end the practice of "drip pricing," where the final cost ends up being much higher than the advertised price due to additional fees. Under SB 478, the price you see should be the price you pay.
This law covers a broad range of goods and services, including event tickets, short-term rentals, hotels, food delivery, and restaurants… sort of (more on that below).
Why This Matters to You
Transparent Pricing: No more surprises at checkout. The price you see upfront will be the total price you pay, excluding only government-imposed taxes and reasonable shipping costs.
Informed Decisions: Clear pricing helps you compare options more effectively, allowing you to choose the best value without hidden costs skewing your decision.
Fair Competition: By eliminating hidden fees, businesses must compete honestly, leading to better deals and services for consumers.
Spotlight – How this applies to Hotels, Event Ticket Sellers, and yes, Restaurants
Hotels - no more surprise Nonsense fees
If you've ever booked a hotel room, you know how frustrating it can be to see an attractive nightly rate, only to be hit with unexpected fees at checkout. Resort fees, service charges, and parking fees can significantly increase your final bill. Under SB 478, hotels must include all mandatory fees in their advertised room rates.
Imagine booking a room at a major hotel chain like Marriott or Hilton. They show you an advertised rate of $200 per night. But at checkout, you find that’s not the total at all! There’s now an additional resort fees of $30 per night, parking fees of $25, and service charges of $10, bringing your total to $265 per night. Under SB 478, the hotel must advertise the room at $265 per night upfront, making it clear from the start what you will be paying.
Transparent Pricing: Hotels must now show all mandatory charges in their advertised rates, giving you a clear picture of the total cost upfront.
Fair Competition: With hidden fees out of the way, hotels will compete more honestly, helping you make better choices.
Increased Trust: Knowing the full cost from the start builds trust and ensures no unpleasant surprises.
Event Ticket Sellers - It will cost what it costs
Buying tickets to your favorite concert or sports event often comes with hidden fees that inflate the cost. Service fees, convenience fees, and other charges are usually added at the final checkout stage. SB 478 requires all these mandatory fees to be included in the advertised ticket price.
Imagine you are excited to buy tickets for the Taylor Swift concert through Ticketmaster, or that Christmas Laker’s game. The ticket price is listed as $100, but by the time you check out, you've added $20 in service fees and $10 in processing fees, making the final cost $130. With SB 478, Ticketmaster must advertise the ticket at $130 upfront.
All-Inclusive Pricing: The price listed for event tickets will now reflect the total cost, free of hidden charges.
Better Budgeting: With clear pricing, you can better plan your entertainment expenses.
Fair Marketplace: Transparent pricing allows you to compare ticket prices easily and choose the best deal.
Restaurants - No more Surprises after the dessert (at least)
Dining out should be a delightful experience, but hidden fees can leave a sour taste. Restaurants sometimes add unexpected charges such as service fees, automatic gratuities, or other mandatory fees to your bill. With SB 478, restaurants must include all mandatory fees in the prices listed on their menus.
However, there are specific exemptions under the newly passed SB 1524 for hidden restaurant fees. SB 1524, signed into law on June 29, 2024, provides certain exemptions and requirements for restaurants, bars, grocery stores, and other food service businesses. Conspiracy theories on how this arose aside, restaurants must still clearly and conspicuously display the fees, along with an explanation of what the fees are.
Say you go to The Cheesecake Factory. The menu lists an entrée for $25, but your final bill includes a $3 service charge and a $2 automatic gratuity, bringing the total to $30. Under the new laws, the menu can show the entrée price as $25, but they must clearly and conspicuously show the extra $5, along with an explanation of what the fees are.
Exemptions: Mandatory fees or charges for individual food or beverage items sold directly to customers by a restaurant, bar, food concession, grocery store, or grocery delivery service are exempt from the provisions of SB 478. This means that these specific charges do not have to be included in the advertised price, provided they are clearly and conspicuously displayed with an explanation of their purpose.
Clarity and Disclosure: Any mandatory fees that are exempt must still be clearly and conspicuously displayed, with an explanation of their purpose, on any advertisement, menu, or other display that contains the price of the food or beverage item.
Extra Protection for Elderly and Disabled Consumers
Fortunately, these new laws are simply amendments to the already existing Consumer Legal Remedies Act, or the CLRA.
Indeed, the CLRA provides additional protections for elderly and disabled consumers, recognizing their increased vulnerability to deceptive practices. At R23 Law, we place a special focus on safeguarding the rights of these groups, ensuring they are not taken advantage of by unfair business practices.
Enhanced Protections: The CLRA includes provisions that specifically protect elderly and disabled consumers from deceptive practices, recognizing their unique vulnerabilities. Notably, elderly and disabled consumers can obtain an additional statutory civil penalty of up to $5,000 if specific statutory requirements are met.
Focused Advocacy: At R23 Law, we are dedicated to advocating for the rights of elderly and disabled consumers, ensuring they receive fair treatment and are protected from hidden fees and deceptive pricing.
How California’s Law Compares with Other States
California’s approach to eliminating hidden fees sets a high standard for transparency in pricing. But there are certain similarities with other states.
New York:
New York has also taken steps to address hidden fees, particularly in the ticketing industry. In 2021, New York passed a law requiring ticket sellers to display the total price of tickets upfront, including all mandatory fees. However, unlike California’s SB 478, New York’s law is more limited in scope and primarily focuses on ticket sales, not covering a broad range of industries like hotels, restaurants, or other services
Scope: While New York targets transparency in ticket pricing, California’s law covers a wider array of goods and services.
Enforcement: Both states emphasize enforcement through their respective attorney general offices, ensuring compliance and protecting consumers from deceptive pricing practices.
Other states have enacted similar measures to enhance pricing transparency, focusing on specific sectors:
• Massachusetts: Requires clear disclosure of resort fees in hotel pricing.
• Nevada: Mandates all-inclusive pricing for car rentals and hotel stays.
These efforts reflect a growing trend towards greater pricing transparency, but California’s SB 478 stands out for its comprehensive coverage across multiple industries.
R23 Law – Your California Junk Fee Experts
At R23 Law, we specialize in cases involving the Consumers Legal Remedies Act (CLRA), and the new junk fee laws. Our deep understanding of this vital piece of legislation allows us to effectively protect consumers from unfair and deceptive business practices. If you've been affected by hidden fees, we can help you navigate your legal options and seek justice.
What to Do If You Encounter Violations
Even with this new law, some businesses might try to skirt the rules. If you find a hotel, event ticket seller, or restaurant not complying with SB 478, you have several options:
Document Everything: Keep records of the advertised price and the final price you were charged. Screenshots, emails, and receipts are valuable evidence.
Report the Violation: File a complaint with the California Attorney General's Office. They are committed to enforcing SB 478 and protecting consumers from deceptive pricing practices.
Seek Legal Help: If you've been significantly harmed by hidden fees, consider reaching out to a law firm specializing in consumer protection. At R23 Law, we’re dedicated to helping consumers fight back against unfair business practices.
A step in the right direction
California's SB 478 is a significant win for consumers, aiming to create a fairer and more transparent marketplace. By eliminating hidden fees, you can enjoy peace of mind knowing the price you see is the price you'll pay. Stay vigilant, report violations, and know that you have legal options to protect your rights as a consumer.
For more information on your rights and how we can help, contact us directly. Together, we can ensure businesses play fair and consumers get the transparency they deserve.
