CLIENT ALERT
By Attorney Amy Crafts
March 12, 2025
While the new administration is stepping away from consumer protection by, among other things, halting operations at the Consumer Financial Protection Bureau, the Massachusetts Attorney General’s Office (“AGO”) has announced new regulations aimed at protecting consumers from “junk fees” and similar billing practices. Promulgated through the AGO’s rule-making authority under the Massachusetts Consumer Protection Act, the new regulations prohibit “junk fees” – hidden or surprise costs that increase the price of a product beyond what is advertised. In addition, the new regulations enable consumers to understand the total price of a product as well as how to cancel unwanted trials or subscriptions.
While not effective until September 2, 2025, it is important to prepare over the coming months if you or your business sell goods or services to Massachusetts consumers. Failure to comply with the new regulations will be considered a violation of the Massachusetts Consumer Protection Act, which prohibits “unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.”
Which Transactions are Covered by the Regulations?
The new regulations, found at 940 CMR 38.00, protect individual consumers seeking to purchase, rent, lease or barter certain products. As described below, the regulations require disclosure of the total price of a product, where “product” is defined as goods and services for personal, family or household use including memberships, subscriptions and housing units available for rent or lease. In addition, the regulations contain specific rules for trial offers and recurring fees.
Unfair and Deceptive Acts in Marketing and Selling Products
The regulations identify several prohibited unfair and deceptive acts related to marketing, solicitation and sale of products. Many relate to misrepresenting or failing to disclose a product’s total price, including “all fees, interest, charges, or other expenses”, at certain points during a transaction, including (1) at the time a product’s price is initially presented to the consumer, and (2) prior to requiring the consumer to disclose any personal information, including billing information. In addition, any disclosure of the total price must be made clearly and conspicuously which means, generally, that information is conveyed in a way that is noticeable and understandable to ordinary customers.
Unfair and Deceptive Acts Related to Trial Offers and Recurring Fees
The regulations also identify various unfair and deceptive acts related to trial offers and recurring fees. Most notably, a trial offer must disclose any related financial obligations as well as instructions for and date of cancellation. Similarly, recurring fees, referred to as a “Negative Option Feature” in the regulations, must include information related to future charges and a mechanism for cancellation.
What are Consequences for Non-Compliance?
In its press release announcing the new regulations, the AGO encourages consumers who have experienced unfair and deceptive acts, including those covered by the new regulations, to file a consumer complaint or call the AGO’s consumer hotline. Such reporting would alert the AGO to potential non-compliant conduct and could trigger an investigation, including requests from the AGO for information and testimony.
An entity found to be non-compliant with the new regulations would be liable under the Consumer Protection Act, which authorizes damages – including multiple damages if the conduct was willful or knowing – as well as costs and attorneys’ fees. In addition, any resolution would likely require an immediate stop to the non-compliant conduct, either by court-imposed injunction or agreement in the form of an Assurance of Discontinuance.
With six months until the new regulations take effect, it is important to evaluate current practices and make any necessary adjustments.
This article is intended to serve as a summary of the issues outlined herein. While it may include some general guidance, it is not intended as, nor is it a substitute for, legal advice.