States Step Into the Void as Federal ‘Junk Fee’ Efforts Stall

For companies selling across multiple jurisdictions, the inconsistency poses significant operational, legal, and financial risks, according to a client alert by Wiley.

The FTC’s 2022 “junk fees” rulemaking signaled federal ambition for wide-ranging, economy-wide reforms. The agency’s Advance Notice of Proposed Rulemaking initially contemplated regulating fees in sectors as varied as telecommunications, financial services, higher education, and automobile sales. But industry pushback and political constraints ultimately yielded a much narrower final rule in 2024. The FTC opted to regulate only two industries—live-event ticketing and short-term lodging—requiring advertised prices to include all mandatory fees except government-imposed taxes and shipping, and mandating clear explanations for optional add-ons.

That limited scope, combined with Congress’s failure to pass any national pricing transparency legislation, has opened the door for states to assert themselves. Attorneys general (AGs) have flagged junk-fee enforcement as a priority, according to Wiley, and state legislatures have responded with laws that reach far beyond the narrow contours of the federal rule. The result is a regulatory landscape that is not only more active than Washington’s but also more expansive and inconsistent.

Some states have hewed to the FTC’s industry-focused approach. Maryland and New York, for instance, have enacted ticketing-specific laws requiring disclosure of all fees upfront. But others have gone considerably broader in enacing junk fee laws. California, Minnesota, and Virginia already enforce cross-industry price-disclosure statutes, while similar laws in Colorado and Connecticut will take effect in 2026.

Massachusetts has adopted sweeping attorney general regulations requiring disclosure of a product’s “maximum price,” including both mandatory and optional charges.

These divergences matter. States vary not only in what fees must be disclosed but also in which industries qualify for exemptions. Virginia’s law, for instance, exempts broadband, cable, and satellite providers that comply with Federal Communications Commission (FCC) regulations, while Minnesota exempts any entity overseen by its public utilities commission. California extends exemptions only to broadband providers.

Hotels and short-term lodging are treated differently across states, ranging from explicit compliance safe harbors to no special treatment at all. Connecticut may even require inclusion of certain shipping charges that most other states exclude.

The enforcement risks are as varied and significant as the compliance challenges. Minnesota authorizes penalties of up to $25,000 per violation. Massachusetts provides for $5,000 per offense. The Connecticut AG is seeking $39 million in one pending case. Even industries exempted from state “junk fee” statutes remain vulnerable under broad unfair and deceptive acts and practices (UDAP) laws.

For multi-state sellers, compliance is a moving target. Companies must assess which state and federal rules apply to specific industries, determine whether each fee is mandatory or avoidable under each jurisdiction’s framework, and adjust digital and physical point-of-sale systems to ensure that advertised prices meet each state’s definition of “total price.” Moreover, legislative activity remains intense, meaning today’s compliance regime may change with little notice.

With Washington unlikely to revisit a broader federal rule in the near term that would preempt state laws, businesses face a regulatory environment in which pricing transparency is both more important and more complex than ever. The expanding state patchwork reflects a familiar dynamic in consumer protection policy: federal gridlock prompting aggressive state-level innovation, leaving companies to confront the compliance burdens of regulatory fragmentation.