Consumer Federation of California

For Immediate Release || Friday, September 15, 2023

Sacramento, CA September 15, 2023 – As the California State Legislature finalized its legislative actions for the year, final actions included a number of potential big wins for California consumers thanks to the Consumer Federation of California (CFC). Bills requiring the licensure of crypto companies, cracking down on hidden/junk fees both generally and specifically in the lodging industry, and enhancing consumer privacy from the prying eyes of cameras pointing inside their cars all are part of the CFC consumer package sent to the Governor.

“Consumer protection could have a strong year in California if Governor Newsom signs this package of pro-consumer bills, which he should,” said Robert Herrell, Executive Director of CFC. “Fighting for consumer rights requires a nimble response to rapidly changing marketplaces. When a new industry emerges, like crypto, or when an old industry changes, like the lodging industry, we must create or update protections that keep consumers safe from scams, rip-offs, and hidden fees and charges. That’s what these bills do.” Briefly here are key components of the bills:

LICENSING CRYPTOCURRENCY COMPANIES AND PROTECTING CONSUMERS AGAINST CRYPTO SCAMS – Digital financial assets, including cryptocurrencies and crypto exchanges, have exponentially grown over the past few years without proper regulation or consumer protections. This has directly led to massive scams where asset prices are manipulated, investment-related frauds, and substantial losses in low-and-moderate income communities of color. The crypto market went from approximately $3 trillion to less than $1 trillion in value in less than a year. CFC-sponsored AB 39 by Assemblymember Timothy Grayson (D – Concord) will license and regulate crypto companies under California’s Department of Financial Protection and Innovation (DFPI), providing key consumer protections while giving industry clarity on how to operate safely. 

The crypto licensing bill is paired up with CFC-sponsored SB 401 by Senator Monique Limón (D – Santa Barbara) and Senate President Pro Tempore Toni Atkins (D – San Diego), which provides some basic consumer protection rules and capping fees for so-called crypto kiosks. Crypto kiosks are commonly associated with criminal activity and fraud, law enforcement agencies continue to warn consumers about the emerging risks associated with crypto kiosks. The number of crypto kiosks has also grown considerably in recent years with 3,400 kiosks in California alone. 

In 2022 Governor Newsom vetoed legislation licensing and regulating crypto. Since then the crypto industry collapsed, FTX founder Sam Bankman-Fried is in jail awaiting trial, celebrities are being sued for pushing crypto, and top crypto executives admitted to massive wrongdoing in the industry. California is behind other states like New York in protecting consumers against crypto scams. AB 39 and SB 401 would allow California to retake a leading position on protecting consumers while encouraging responsible innovation. 

CRACKING DOWN ON HIDDEN AND JUNK FEES, ESPECIALLY IN THE LODGING INDUSTRY – Deceptive advertising in the lodging industry has increased over the last few years, with many hotels, motels, and short-term rentals not disclosing hidden fees such as resort fees, “destination” fees, massive cleaning fees and other junk fees up front to consumers. The practice of deceptively advertising low prices only to add large mandatory fees later, also known as “drip pricing”, causes consumers to underestimate the total price and spend more than they planned. U.S. hotels alone generated approximately $3 billion from mandatory fees in 2018. CFC-sponsored Assembly Bill 537 by Assemblymember Marc Berman (D – Menlo Park) would make it illegal for lodging establishments to advertise or offer a room rate that does not include all fees and taxes required. This bill enhances California’s False Advertising law and will apply to lodging establishments, so-called “consolidator” sites such as Expedia or Priceline, and alternatives such as Airbnb or VRBO. AB 537 increases transparency and helps the more than 80% of travelers who do their travel research and comparison shopping online.

CFC also supports Attorney General Rob Bonta’s sponsored bill cracking down on drip pricing, SB 478 by Senators Bill Dodd (D – Napa) and Nancy Skinner (D – Berkeley), which adds a prohibition against drip pricing in California’s Consumer Legal Remedies Act.

ENHANCING CONSUMER PRIVACY PROTECTIONS IN THEIR VEHICLES  – One of the growing trends in vehicle technology is that more vehicles are equipped with in-vehicle cameras that look inside your car. Consumers spend a lot of time in their vehicles, and the increase of in-vehicle cameras potentially puts consumer privacy at risk. CFC-sponsored SB 296 by Senator Bill Dodd (D – Napa) would enhance consumer protections by requiring that consumers be informed at the time of purchase if an in-cabin camera is in a car, and prohibit video recordings from that camera from being used for advertising or sold to third parties. This is a common sense policy that makes it clear that consumers should not have to take extraordinary action to prevent their in-vehicle video recordings from being taken or used without their permission or knowledge. 

Governor Newsom has until October 14th to sign or veto these bills.

About Consumer Federation of California The Consumer Federation of California is a nonprofit advocacy organization that, since 1960, has been a powerful voice for consumer rights. CFC campaigns for laws and regulations that place consumer protection ahead of corporate profit, either in front of the California Legislature or before state agencies in support of consumer regulations. 

Find CFC on the web at www.consumercal.org, on Facebook at facebook.com/consumercal, and on Twitter/X at twitter.com/consumercal.

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