California cracks down on ‘predatory’ early cancellation fees

California has enacted new legislation, Assembly Bill 483, to limit companies from charging consumers "exorbitant" fees to cancel fixed-term contracts. The bill aims to provide transparency and fee limits on early terminations for installment contracts, which include services that lure consumers into signing annual contracts with the option to pay in installments, but with hefty cancellation fees. The bill bans companies from hiding early termination fee disclosures within fine print or obscured hyperlinks, and limits the total fee amount to a maximum of 30 percent of the total contract cost. The goal is to make it easier for Californians to compare services and reduce the financial burden if they need to end their contract early. The announcement also criticizes the Federal Communications Commission chair Brendan Carr for weakening consumer protections, and highlights the ongoing lawsuit against Adobe for allegedly hiding expensive early cancellation fees and trapping consumers in pricey annual subscriptions. California's new law could set a national standard and force companies to overhaul their contract termination practices.