Massachusetts businesses must comply starting today with sweeping new regulations on price advertising and subscription services.  

Attorney General Andrea Campbell issued final regulations earlier this spring that restrict so called “Junk Fees” – commonly assessed fees and charges that regularly occur in consumer transactions.  

These new regulations take effect on September 2. Enforcement with penalties will begin immediately.  

The Office of the Attorney General (AGO) confirmed that there will be no additional delays in enforcement despite requests by AIM for additional time to develop compliance. 

The rules apply to the purchase, lease, or rental of almost all products and services purchased by Massachusetts consumers. Only a few industries are exempt. Because the scope of the regulation is anchored by consumers—rather than businesses—located in Massachusetts, its reach extends to non-compliant out-of-state companies advertising to, soliciting, or offering products for sale to Massachusetts buyers, including via online transactions.    

Companies are now required to disclose the “total price” of any products offered at the start of a transaction. That total must include all fees, charges or other expenses. Those additional charges may not be revealed to the consumer later on. The regulations also impose new rules on subscription-based services and automatic renewals.  

The Attorney General issued updated guidance in late July granting limited exemptions to certain industries and clarifying additional responsibilities. For example, restaurants can still impose a mandatory service charge for larger parties, but the money from that charge must go exclusively to staff. That guidance can be found here.  

“We support the goal of targeting specific bad actors in the so-called junk-fees space, but these regulations will prohibit many legitimate business practices and companies will have to spend significant amounts money adjusting their advertising practices,” said Sam Larson, VP of Government Affairs at AIM.  

“The regulations on pricing and advertising are by far the broadest in the country and have no carve-out for small businesses. Our members already manage daily policy uncertainty out of Washington D.C. and we do not think it is appropriate for our own Attorney General implement sweeping new regulations at this time.” 

Here are details: 

Total Price 

Businesses selling to Massachusetts consumers must now disclose the “total price” of their products in a clear and conspicuous manner. The total price must cover any additional costs associated with a purchase and must be shown to the consumer up front during any advertising or presentations. The total price must also be shown more prominently than any other pricing information. All additional charges must also be displayed with descriptions of the nature, purpose and amount of any charges that may be imposed on a transaction. Shipping costs and local taxes are not required until the final transaction.  

Recurring Charges and Subscriptions 

Businesses must implement simple processes for consumers to cancel subscriptions and other recurring charges, including ensuring that consumers may cancel subscriptions through the same method that they enrolled. For example, if a consumer enrolls in a subscription through a website, the consumer must be able to cancel the subscription through the same website. If a consumer enters a subscription via the phone the company must set up a phone line dedicated to cancelations. 

Automatic Renewals and Trial Offers 

Businesses operating in Massachusetts must also clearly disclose any charges that a consumer may incur when accepting a trial offer. Companies must provide the calendar date by which a consumer must reject or cancel a trial offer to avoid being charged.  In addition, there must be clear instructions to reject or cancel trial offers. 

Violations of these regulations will be considered an “unfair and deceptive” business practice under the state’s consumer-protection laws. The Attorney General will lead enforcement, but private attorneys can bring cases that can result in double damages.  

If your business may be impacted by the new rules and restrictions and you would like to learn more, please contact Sam Larson, Vice President of Government Affairs at  slarson@aimnet.org. The text of the regulations can be found here the office has issued additional guidance with very limited exemptions which can be found here.