New Jersey Attorney General Issues Sweeping Enforcement Statement Targeting "Junk Fees”

The New Jersey Attorney General and Division of Consumer Affairs recently issued a comprehensive Enforcement Statement signaling an aggressive enforcement posture toward so-called “junk fees” under the New Jersey Consumer Fraud Act (CFA). The Enforcement Statement was issued in conjunction with Governor Mikie Sherrill’s Executive Order No. 19, which directs state agencies to review and recommend measures to eliminate or reduce junk fees across a broad range of industries. Although the Enforcement Statement does not create any new legal obligations, it provides important insight into how New Jersey regulators intend to interpret and enforce existing law and serves as a warning to businesses operating in the state.

The Statement arrives amid a broader national movement targeting hidden, surprise, and allegedly excessive fees. Over the past several years, the Federal Trade Commission (FTC), the Consumer Financial Protection Bureau (CFPB), state attorneys general, and state legislatures have all pursued initiatives designed to curb what they characterize as junk fees. While the CFPB’s efforts have stalled under the Trump Administration, the FTC continues to pursue enforcement and implementation of its junk-fee rule, and states increasingly are filling the enforcement vacuum created by the CFPB.

Against that backdrop, New Jersey’s Enforcement Statement is particularly noteworthy because it applies junk-fee theories to a broad range of industries, including consumer financial services, and advances an expansive interpretation of the CFA that goes beyond traditional disclosure issues.

The Growing National Campaign Against Junk Fees

The campaign against junk fees gained significant momentum during the Biden Administration.

At the federal level, the CFPB under former Director Rohit Chopra made junk fees a centerpiece of its regulatory and enforcement agenda. The Bureau targeted overdraft fees, nonsufficient funds fees, credit card late fees, mortgage-related fees, auto finance add-on products, force-placed insurance charges, loan servicing fees, and other ancillary products and services that it believed provided little value to consumers or were inadequately disclosed.

The CFPB’s enforcement actions frequently focused on products that consumers allegedly did not understand they were purchasing, products that duplicated existing benefits, or fees embedded in loan payments without meaningful consumer consent. Many of the concepts discussed in the New Jersey Enforcement Statement (including loan packing, add-on products, manipulation of electronic consent, and fees that provide little or no value) closely mirror theories advanced by the CFPB during the Chopra era.

Since Acting Director Russ Vought assumed leadership of the CFPB, however, the Bureau has sharply curtailed both rulemaking and enforcement activity. The CFPB’s highly publicized campaign against junk fees has receded, leaving states and other regulators to take the lead.

The FTC, by contrast, continues to pursue junk-fee initiatives. In December 2024, the FTC adopted its Rule on Unfair or Deceptive Fees, commonly known as the Junk Fees Rule. The rule, which became effective in May 2025, requires hotels, short-term lodging providers, and live-event ticket sellers to disclose the total price (including mandatory fees) up front. The rule is directed primarily at “drip pricing,” the practice of advertising a low initial price and adding mandatory fees later in the purchasing process.

Although the FTC rule applies only to limited industries, the Commission has made clear that it intends to continue challenging hidden fees and deceptive pricing practices in other industries through enforcement actions under Section 5 of the FTC Act.

States have likewise become increasingly active. California, Minnesota, Connecticut, Colorado, Oregon, Virginia, and Massachusetts have all adopted laws or regulations requiring some form of all-in pricing or enhanced fee disclosure. Illinois recently enacted the Junk Fee Ban Act, which will impose additional pricing-transparency requirements and authorize significant penalties. Many state attorneys general have also launched investigations and enforcement actions involving rental housing fees, ticketing fees, hotel resort fees, cable and internet fees, and consumer finance products. Even New York City has entered the field. In 2024, the New York City Department of Consumer and Worker Protection DCWP adopted rules implementing the city’s “junk fee” law, which generally prohibits businesses from advertising or displaying prices that exclude mandatory fees or surcharges. The rules require businesses to disclose the total price consumers will be required to pay, with limited exceptions for taxes and certain government-imposed charges, and are intended to combat drip pricing and improve price transparency across a broad range of consumer transactions. Violations may expose businesses to civil penalties and enforcement actions by the DCWP. 

Against this national backdrop, New Jersey’s Enforcement Statement reflects a broader trend toward heightened scrutiny of fees and pricing practices.

The State’s View of Junk Fees

According to the Attorney General, junk fees include hidden, surprise, or excessively priced charges that provide little or no value to consumers or that are not transparently disclosed. The Statement asserts that such fees contribute to affordability concerns, distort competition, and make it difficult for consumers to compare products and services.

The Attorney General emphasizes that junk fees can arise in virtually any consumer transaction and can appear in industries ranging from housing and automobile sales to lending, travel, and consumer services. Significantly, the Statement suggests that fees need not be entirely undisclosed to attract scrutiny. Fees that are inadequately explained, misleadingly described, or disproportionate to the value provided may also be considered problematic.

The Consumer Fraud Act as the Primary Enforcement Tool

The Statement relies heavily on the broad language of the Consumer Fraud Act, one of the nation’s most expansive consumer protection statutes.

The CFA prohibits:

• Unconscionable commercial practices;
• Abusive commercial practices;
• Deception and misrepresentation;
• Fraud and false pretenses;
• Material omissions and concealment of facts; and
• Violations of other state or federal laws.

Violations can expose businesses to civil penalties of up to $10,000 per violation for a first offense and up to $20,000 per violation for subsequent violations, in addition to other remedies.

The Attorney General emphasizes that the CFA is sufficiently flexible to address evolving forms of consumer harm, including those facilitated by technology and artificial intelligence.

“Drip Pricing” and Hidden Fees

One of the most significant aspects of the Statement is its focus on drip pricing.

The Attorney General describes drip pricing as the practice of advertising a low price and then adding mandatory fees later in the transaction process. According to the Statement, this practice may constitute a deceptive practice because it prevents consumers from accurately comparing products and services and obscures the true cost of a transaction.

This position closely parallels the FTC’s Junk Fees Rule and reflects a growing consensus among regulators that mandatory fees should generally be included in the advertised price.

The Statement specifically highlights rental housing as an area of concern, noting that advertised rents may not reflect mandatory fees that significantly increase the consumer’s actual monthly cost.

“Dark Patterns” and Digital Manipulation

The Statement also focuses heavily on so-called “dark patterns”—website and mobile application designs that allegedly manipulate consumer decision-making or conceal material information.

Examples include:

• Dense fine print;
• Buried disclosures;
• Pop-up screens;
• Manipulated font sizes;
• Strategic placement of disclosures;
• Complex click-through processes; and
• Website designs that make fees difficult to identify.

These concerns mirror recent FTC enforcement actions and demonstrate regulators’ growing willingness to scrutinize not only the substance of disclosures but also the manner in which disclosures are presented.

Misrepresentations About Fees

The Statement identifies several categories of representations that may be considered deceptive, including representations concerning:

• The purpose of a fee;
• Whether a fee is mandatory or optional;
• Who receives the fee; and
• The value provided by the fee.

The Attorney General also warns that omissions may be actionable. For example, regulators may challenge circumstances in which a seller highlights a monthly payment amount while failing to disclose optional products or services included within that payment.

This aspect of the Statement has particular relevance for lenders, automobile dealers, fintech companies, and other businesses that offer ancillary products and services in connection with financing transactions.

Unconscionable and Abusive Fees

Perhaps the most significant aspect of the Statement is its discussion of unconscionability.

The Attorney General takes the position that a fee need not be deceptive to violate the CFA. Rather, a fee may be unlawful if it is unconscionable or abusive.

According to the Statement, regulators may consider factors such as:

• The seller’s cost;
• The value received by the consumer;
• The practical utility of the product or service; and
• The magnitude of any markup.

The Statement cites litigation against a major lender alleging that consumers paid substantial amounts for ancillary products that rarely provided meaningful benefits. It also references studies showing substantial markups on optional products sold in automobile transactions.

By emphasizing the relationship between price and value, the Statement signals a willingness to scrutinize not merely how fees are disclosed but whether regulators believe the fee itself is justified.

That approach goes considerably further than many state all-in pricing laws, which generally focus on disclosure and transparency rather than substantive assessments of value.

Add-On Products and Consumer Financial Services

The Enforcement Statement may be especially important for consumer financial services companies because many of its examples are drawn directly from financial-services enforcement actions.

The Statement discusses:

• Auto-finance add-on products;
• Loan-packing allegations;
• Duplicative insurance products;
• Optional products embedded in monthly payments;
• Electronic-signature practices;
• Consumer-consent procedures; and
• Products that allegedly provide little or no value.

These examples closely resemble theories advanced by the CFPB (under former Director Rohit Chopra) and state attorneys general in enforcement actions involving auto finance companies, installment lenders, and other providers of consumer financial products.

As a result, the Statement arguably represents one of the clearest examples to date of a state attorney general incorporating the CFPB’s former junk-fee framework into a state UDAP statute.

Electronic Consent and E-SIGN Issues

The Statement also signals increased scrutiny of electronic contracting practices.

The Attorney General identifies several practices that may undermine meaningful consumer consent, including:

• Pre-checked boxes;
• Pre-loaded optional products;
• Rapid scrolling through disclosures;
• Sales representatives maintaining exclusive control of electronic devices during the contracting process; and
• Potential violations of the federal E-SIGN Act.

These concerns reflect broader regulatory efforts to ensure that consumers have a genuine opportunity to review and understand contract terms before agreeing to fees or ancillary products.

Arbitration Clauses

An unusual aspect of the Statement is its discussion of arbitration provisions and class-action waivers.

The Attorney General notes that many consumers lack practical means to challenge allegedly improper fees because arbitration agreements frequently require individual dispute resolution and prohibit class actions. The Statement suggests that this reality makes government enforcement particularly important.

Although the Statement does not challenge arbitration agreements directly, the discussion provides additional context for the Attorney General’s stated commitment to active enforcement.

Takeaways

The New Jersey Attorney General’s Enforcement Statement represents one of the most comprehensive state pronouncements to date regarding junk fees.

Unlike many recent state laws that focus primarily on all-in pricing and disclosure requirements, the New Jersey Statement advances a far broader theory of liability. It addresses hidden fees, drip pricing, dark patterns, ancillary products, electronic consent practices, fees that allegedly provide little value, and pricing that regulators may view as excessive or unconscionable.

The Statement also arrives at a time when the CFPB has retreated from its aggressive junk-fee agenda. As a result, state attorneys general increasingly appear poised to become the primary regulators advancing junk-fee theories. New Jersey’s Enforcement Statement may therefore serve as a roadmap for future state enforcement efforts, particularly in the consumer financial services industry.

Banks, nonbank lenders, fintech companies, auto finance companies, mortgage lenders, servicers, and other consumer financial services providers should carefully review their fee structures, disclosures, ancillary product offerings, electronic contracting procedures, and consent practices in light of the Attorney General’s guidance. The message from New Jersey regulators is clear: scrutiny of fee practices is likely to intensify, and the concept of a “junk fee” may extend well beyond traditional disclosure issues.