• Under California Senate Bill 478 ("SB 478"), all mandatory fees must be included in the listed price for a good or service, excluding certain government taxes and shipping costs.
• Mandatory fees do not include late fees or optional costs.
• If a business is found in violation of the new law, a consumer can seek $1,000 per violation penalty, restitution, attorney’s fees, punitive damages, and any other relief the court deems proper.

Beginning July 1, 2024, a new amendment through SB 478 to the California consumer protection statute (the California Legal Remedies Act) will go into effect. The “Honest Pricing Law” also known as the “Hidden Fees Statute,” will make it unlawful for businesses to advertise or list a price for a good or service that does not include all required fees or charges, excluding certain government taxes and shipping costs. The goal of SB 478 is to promote price transparency and protect consumers from deceptive business practices such as “drip pricing,” and “junk” fees. To put it simply, California is now requiring that the price a Californian sees, is the price a Californian pays.

Businesses are still free to charge however much they want, as long as they provide the total cost of the good or service in the breakdown of the various fees included in the listed price. However, the listed price must include the full amount that a customer pays for the good or service. This law applies to the sale or lease of goods and services that are for a consumer’s personal use. It does not apply to the purchase or lease of goods or services for commercial use.

SB 478 is a price transparency bill. The statute does not change what price a business can charge or what may be included in that cost. It simply requires that the price listed includes all mandatory charges. These mandatory charges, such as a handling fee, must be in one, single price. A business is unable to advertise or post the price of the good or service separate from the additional fees the consumer would be required to pay. Mandatory charges do not include additional shipping costs, late fees, additional charges if equipment is broken during the time of a rental, a fee for smoking in a non-smoking hotel room—as one example that has been given by the California Attorney General, or optional services or features. These costs and fees can be listed separately. Discounts or discount coupons are permitted. The law only prohibits advertising a price less than what the customer will pay.

Under SB 478, gratuity payments that are not voluntary must also be included in the listed price. However, restaurants that offer delivery do not need to include the price of the delivery fee because it is a separate service the consumer has agreed to pay in addition to the cost of food.

There are significant remedies available for consumers who bring claims for violation of SB 478. These remedies include $1,000 per violation penalty, restitution, attorney’s fees, punitive damages, and any other relief the court deems proper.

Read the California Attorney General's “SB 478 Frequently Asked Questions” for more details.

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Nicolas Pierce, of Hanson Bridgett's 2024 1L LCLD Scholar program, contributed to this article.