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Financial Services Law Insights and Observations

California enacts amendments to the Consumers Legal Remedies Act: Advertisements

State Issues State Legislation Advertisement Unfair California Consumer Protection

State Issues

On October 7, the California governor approved SB 478 (the “Act”), enacting amendments to the Consumers Legal Remedies Act designed to prohibit “drip pricing,” which involves advertising a price that is lower than the actual price a consumer will have to pay for a good or service. The Act, with specified exceptions, will make advertising the price of a good or service excluding additional fees or charges other than taxes, unlawful. The California Legislature declared that the Act is not intended to prohibit any particular method of determining prices for goods or services, including algorithmic or dynamic pricing. Instead, it is intended to regulate how prices are advertised, displayed, and/or offered.

The Act is effective July 1, 2024.