On Monday, Massachusetts Attorney General Andrea Campbell finalized new regulations under the Massachusetts Consumer Protection Act, Chapter 93A, restricting the use of hidden or surprise fees at the end of a transaction that increase a product's total price beyond its advertised price. While existing regulations create certain requirements during the sale and advertisement of products with supplemental costs and fees, the new regulations go further. In her press release, AG Campbell describes these charges as "junk fees."
The Massachusetts regulations, which take effect on September 2, 2025, require sellers to clearly and conspicuously communicate the total price of any good or service offered or presented to a consumer, including any additional fees or expenses, from the first time the offer is made and at any time the price is presented again. Where a fee is mandatory, businesses must explain its nature and purpose. Where a fee is not mandatory, sellers must clearly note its optional nature and provide instructions on how to avoid it. The regulation also imposes new obligations for businesses that extend trial offers or use "negative option features": contractual terms like automatic renewal that treat a customer's silence or inaction as acceptance of a renewing or continuing agreement. Not only must businesses clearly and conspicuously disclose all the terms of such offers; they must also provide "simple mechanisms" for cancellation, instructions on how to cancel, and—in some cases—timely reminders before an option triggers or renews.
The Commonwealth's new regulations come in the wake of the FTC's effort at the end of the Biden Administration to limit "junk fees." The Massachusetts regulations, however, have a much broader scope than the recent FTC Rule on Unfair or Deceptive Fees scheduled to become effective in May. While the federal regulation is limited to sales in the live-event ticketing and short-term lodging industries, the Massachusetts counterpart will reach all advertising, solicitation, and offers designed to reach Massachusetts consumers.
Companies with Massachusetts customers should keep several features of the regulations in mind.
- First, because the scope of the Attorney General's regulation is anchored on consumers—rather than only businesses—located in Massachusetts, its reach extends to noncompliant out-of-state sellers advertising to, soliciting, or offering products for sale to Massachusetts buyers, including via online transactions.
- Second, the regulations carve out certain industries already covered by Massachusetts law: motor vehicles, healthcare, credit, and securities. Sellers in these industries can ensure general compliance with the new regulations by complying with the special regulatory and statutory schemes applicable to them. However, for motor vehicle sellers, the carve-out does not apply to the new regulation on trial offers and "negative option features."
- Third, the regulations specify that they apply to all conduct except where preempted by federal law, but the Office of the Attorney General has provided only limited guidance as to circumstances or industries where application may be preempted, noting only that the regulations are preempted with respect to air travel provided by air carriers. Businesses in other industries subject to federal disclosure requirements may have arguments that enforcement with respect to their business is also preempted.
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