Hidden fees are fees in which a seller uses an artificially low headline price to attract a customer and usually either discloses additional required fees in smaller print, or reveals additional unavoidable charges later in the buying process.
Californians will know up front how much they’re being asked to pay, and no longer be surprised by hidden junk fees when buying a concert or sports ticket or booking hotel rooms for their family vacation.”
If I am a small business and I advertise one price and sell it for another. It’s called bait and switch and it’s illegal. If you’re a big company, they have to write special rules for you I guess.
Edit: I misremembered the text, “This practice, like other forms of bait and switch advertising, is prohibited by existing statutes” This law will probably make enforcement easier because the law is now more specific.
Under California law it’s not a bait and switch to advertise a base price before fees. That’s why they passed this law. The text of the bill mentions the fact that this sort of pricing did not violate California’s bait and switch laws prior to its introduction.
I’m guessing it might be because tax rates vary so wildly in the US. Every state has their own percentage of state taxes, and then many counties and cities have their own specific tax rate on top of that.
A company might sell a product nationwide, and it’s easier for them to do national advertising that their product is $100 + local taxes than it is for them to make hundreds upon hundreds of different local ads with a precise dollar amount.
I’ve no doubt it’s easier for companies, but I don’t really care about making advertising easier for them. I prefer to make life easier for consumers. Regional taxes and fees and levies aren’t unique to America. How they handle this in other countries is either regional advertising or normalising the price nationally and potentially eating a loss in some high tax areas. The price can also settle a little higher in some regions if the product has low elasticity of demand. Either way, it gives consumers much more information up front.
All the vacation rental places are appalling. Cleaning few. Pool few. Resort fee. Service fee. Processing fee.
Restaurants are starting on the cash grab a few years back, mostly the ones owned by private equity firms. Mandatory service fee couched as a gratuity, which it most often isn’t, so the guest and the servers get fucked.
This law does not ban hidden fees. There are plenty of hidden fees that this law does nothing about.
This law makes it illegal to advertise a price that doesn’t account for included fees. If a concert ticket is $40 with a $20 “service” fee, this law would require the tickets to be listed as $60 tickets. This law does not require taxes to be included in advertised prices, sales tax is added after the advertised price.
This law only prohibits misleading advertising of pricing, it however does not require disclosure of pricing.
The biggest source of hidden fees is the medical billing. Healthcare costs are nearly all hidden fees because healthcare providers rarely disclose prices in advance. This bill does nothing about that, because if a price is not advertised, this bill does not effect it, and this bill does not require disclosure of pricing in advance.
This bill is an improvement. This bill will reduce misrepresentation of pricing, but it does not actually ban hidden fees outright.
What about pricing like at my local Kroger store where in the list 99 cents with digital coupon and a QR code and then teeny teeny tiny text that says $3.99 regular price.
I hope this will make it clear how much people actually pay on their retirement accounts. Far too many people I talk to don’t realize that they are paying an “expense ratio” on their investment funds.
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