On July 1, 2024, the “junk fee” amendment to the California Consumers Legal Remedies Act (CLRA) took effect. Under this new provision, it is a violation of the CLRA if a company advertises, displays, or offers goods or services at a price, but does not disclose all mandatory fees or charges when displaying the price. Businesses failing to abide by this requirement may face regulatory enforcement and consumer class actions seeking statutory damages, punitive damages, and attorney fees. Companies should closely review all advertising and marketing materials, including websites and in-store materials, to ensure that all necessary fees and charges are disclosed.
Of note, the amendment does not require taxes and reasonable shipping charges to be disclosed prior to checkout. Likewise, it does not require food delivery platforms to disclose fees for delivery services. Certain industries such as car rental, automobile manufacturers, and some financial industries are also exempted, because their advertising and marketing are regulated by different laws.
