While the federal government’s campaign against hidden “junk” fees intensifies, state attorneys general (AGs) have long been contesting concealed costs as unfair or deceptive — especially in the absence of sufficient disclosures. Energized by a surge in enforcement activity targeting junk fees, Massachusetts AG Andrea Campbell proposed new regulations aimed at prohibiting “junk fees” in Massachusetts. The term “junk fees” generally refers to additional charges imposed on consumers that are often unrelated to the actual cost of goods or services such as processing fees, convenience charges, or mandatory resort fees. Sometimes “junk fees” can also refer to a practice called “drip pricing” where a company advertises an initial low price to attract consumers but gradually reveals additional mandatory fees during the booking or purchasing process, providing the consumer with a false impression of the true cost.

During the 2023 State of the Union Address, President Joe Biden urged regulators to address “junk” and “hidden” fees. In response, the federal government has taken steps to strengthen regulations and enforcement efforts. By way of example, the Federal Trade Commission (FTC) proposed a new rule on junk and hidden fees in November 2023. Likewise, the Federal Communications Commission (FCC) proposed a rule in June 2023 that would require cable and satellite TV providers to give consumers the “all-in” price up front.

Following suit, Massachusetts’ proposed regulations mandate that businesses disclose the “all-in” or total price of a product in a clear, conspicuous, and prominent manner at the time of communicating the price to consumers. This “all-in” price includes all associated costs, including but not limited to fees, interest, convenience charges, or any other required expenses. Moreover, sellers must clearly articulate the nature and purpose of any fees and distinguish between mandatory and optional charges. Notably, the proposed rules prohibit businesses from requesting personal data, such as billing and credit card details, before revealing the price of a product.

Massachusetts’ initiative comes on the heels of California’s amendment to the California Consumer Legal Remedies Act (CLRA) in October 2023 (effective July 1, 2024), which prohibits companies from excluding certain expenses from the advertised or disclosed price. The CLRA makes any “advertising, displaying, or offering a price for a good or service that does not include all mandatory fees or charges” unlawful, subject to certain exceptions.

The enforcement activity of state AGs in this domain is also noteworthy. State AGs regularly target deceptive trade practices across various industries, including hospitality, food delivery, event ticketing, car rental, cable television, and internet. For example, the Texas AG sued Hyatt Hotels in May 2023 for deceptive trade practices related to Hyatt’s advertised price of hotel rooms. In his complaint, the Texas AG alleged that Hyatt charged consumers mandatory and unavoidable fees — such as resort fees, destination fees, or amenity fees — in addition to daily room rates that were not disclosed at the point of sale. Additionally, Colorado, Oregon, and Pennsylvania AGs reached a settlement under similar allegations with Choice Hotels in September 2023.

Why It Matters

These recent actions emphasize the significant amount of regulatory attention into perceived hidden or “junk” fees. Regulators are attempting to promote transparency, foster consumer trust, and protect consumers from what they perceive as misleading pricing tactics. As these actions gain attention at both the federal and state levels, they begin to develop momentum to spread nationwide. Companies should evaluate their pricing practices, and specifically whether consumers are charged mandatory fees, which do not appear in marketing/advertising materials or at the point of sale, to mitigate the risk of regulatory scrutiny.

Troutman Pepper State Attorneys General Team

Ashley Taylor – Co-leader and Firm Vice Chair
Ashley is co-leader of the firm’s nationally ranked State Attorneys General practice, vice chair of the firm, and a partner in its Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. He helps his clients navigate the complexities involved with multistate attorneys general investigations and enforcement actions, federal agency actions, and accompanying litigation.
Clay Friedman – Co-leader
Clayton is a partner in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group and co-leader of the State Attorneys General practice, multidisciplinary teams with decades of experience crafting effective strategies to help deter or mitigate the risk of enforcement actions and litigation.
Judy Jagdmann
Judy is a partner in the firm’s Regulatory Investigations, Strategy and Enforcement (RISE) practice, based in the Richmond office. She brings experience serving as chair and commissioner of the Virginia State Corporate Commission (VSCC) from 2006 through 2022, which includes regulating the utilities, insurance, banking, and securities industries. She also served as Virginia’s attorney general from 2005-2006.
Stephen Piepgrass
Stephen leads the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. He focuses his practice on enforcement actions, investigations, and litigation. Stephen primarily represents clients engaging with, or being investigated by, state attorneys general and other state or local governmental enforcement bodies, including the CFPB and FTC, as well as clients involved with litigation, with a particular focus on heavily regulated industries.
Avi Schick
A former deputy attorney general of New York, Avi applies his experience in bet-the-company matters, representing clients in criminal and civil investigations and enforcement actions before state and federal regulators, prosecutors and enforcement agencies.
Michael Yaghi
Michael is a partner in the firm’s State Attorneys General and Regulatory Investigations, Strategy + Enforcement (RISE) Practice Groups, nationwide teams that advise clients on consumer protection enforcement matters and other regulatory issues.
Samuel E. “Gene” Fishel
Gene is a member of the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) practice, based in the Richmond office. He brings extensive regulatory experience, having most recently served as senior assistant attorney general and chief of the Computer Crime Section in the Office of the Attorney General of Virginia, and as special assistant U.S. attorney in the Eastern District of Virginia for 20 years.
Tim Bado
Tim is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, where he represents corporations and individuals facing potential civil and criminal exposure. Tim’s experience in government investigations, enforcement actions, and white-collar litigation spans a number of industries, including financial services, pharmaceutical, health care, and government contracting, among others.
Chris Carlson
Chris Carlson represents clients in regulatory, civil and criminal investigations and litigation. In his practice, Chris regularly employs his prior regulatory experience to benefit clients who are interacting with and being investigated by state attorneys general.
Natalia Jacobo
Natalia is an associate in the firm’s Regulatory Investigations, Strategy and Enforcement (RISE) practice. She focuses her practice on two primary areas: government contracting and state attorney general work.
Namrata Kang
Namrata (Nam) is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, based in the Washington, D.C. office. She routinely advises clients on a wide variety of state and federal regulatory matters, with a particular emphasis on state consumer protection laws relating to consumer financial services and marketing and advertising.
Michael Lafleur
Michael is an associate in the firm’s Regulatory Investigations, Strategy, and Enforcement Practice Group. Based out of the firm’s Boston office, Mike has deep experience in litigation, investigations, and other regulatory matters involving state-level regulators and state attorneys general.
Susan Nikdel
Susan is an associate in the firm’s Consumer Financial Services Practice Group, and focuses her practice on consumer financial services matters. She has defended several of the nation’s largest and most influential financial institutions in individual and class action litigation involving the Telephone Consumer Protection Act (TCPA), Fair Credit Reporting Act (FCRA), Fair Debt Collection Practices Act (FDCPA), and other consumer privacy statutes.
John Sample
John is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. He focuses his practice on a wide range of general and complex litigation matters, including shareholder disputes, fraud, products liability, breach of contract, and Biometric Information Privacy Act claims.
Whitney Shephard
Whitney is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. She represents clients facing state and federal regulatory investigations and enforcement actions, as well as related civil litigation.
Trey Smith
Trey is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice. He focuses his practice on helping financial institutions and consumer facing companies navigate regulatory investigations and resulting litigation.
Daniel Waltz
Daniel is a member of the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group and State Attorneys General team. He counsels clients in connection with navigating complex government investigations, regulatory compliance, and transactions, involving state and federal government contracting obligations. Drawing on his broad experience as a former assistant attorney general for the state of Illinois, Daniel is a problem solver both inside and outside the courtroom.
Stephanie Kozol
Stephanie is Troutman Pepper’s senior government relations manager in the state attorneys general department.