On Saturday, Gov. Gavin Newsom signed into law Senate Bill 478, which bans “offering a price for a good or service that does not include all mandatory fees or charges other than taxes or fees imposed by a government on the transaction.” Also known as hidden fees or surprise fees, junk fees obscure the total cost of a transaction until it’s often too late, or too frustrating, to back out. The new law, which will go into effect July 1, 2024, won’t necessarily make things cheaper. Businesses are allowed to set prices as they wish, but the final total must be disclosed upfront.
President Joe Biden speaks in the South Court Auditorium on the White House complex in Washington, Thursday, June 15, 2023, to highlight his administration's push to end so-called junk fees that surprise customers. Lael Brainard, Assistant to the President and Director of the National Economic Council, listens at right. (AP Photo/Susan Walsh). The bill, introduced by state Sens. Bill Dodd (D-Napa) and Nancy Skinner (D-Berkeley), categorizes junk fees as a form of “bait and switch advertising” and a “deceptive” business practice.
“With the signing of SB 478, California now has the most effective piece of legislation in the nation to tackle this problem. The price Californians see will be the price they pay,” California Atty. Gen. Rob Bonta, who has backed the bill since it was introduced earlier this year, said in a statement. He added that junk fees are “bad for consumers and bad for competition.”
The use of junk fees stifles fair market competition, the bill says. Tacking on charges only at the final point of sale makes it harder for consumers to know the true price of what they’re buying, limiting their awareness when comparison shopping for the lowest price.
Ticketing companies in particular have come under fire for tacking on high junk fees that appear at the end of a transaction. A face-value “Platinum” ticket for Blink-182’s June 16 show at BMO Stadium was listed on Ticketmaster at $290, The Times reported. But that was before an additional $47.90 in “service” and “processing” fees, which brought the total to $337.90. SeatGeek and LiveNation, which owns Ticketmaster, in June pledged they would disclose fees at the beginning of each sale.