California’s advertised price law requires businesses to show consumers the real price up front, with every mandatory fee included, and to back up any “sale” or “discount” claim with a genuine reference price. Violations can trigger criminal misdemeanor charges under the False Advertising Law, civil penalties of up to $2,500 per violation under the Unfair Competition Law, and private lawsuits from the consumers who paid the inflated tab. The Attorney General, local district attorneys, city attorneys in large cities, industry regulators, and individual buyers all have standing to act.
What the Advertised Price Must Include
Since July 1, 2024, California has banned “drip pricing,” where a business advertises a low base price and then loads on mandatory fees at checkout. Civil Code Section 1770(a)(29) makes it unlawful to advertise, display, or offer a price for any good or service that does not include all mandatory fees or charges.1California Department of Justice. SB 478 – Hidden Fees The only charges a business may leave out of the advertised number are government-imposed taxes and fees, plus reasonable shipping costs for physical goods.2California Legislative Information. California Code Civil Code 1770
The rule hit hardest in industries built around low headline rates plus unavoidable add-ons: hotel “resort fees,” ticketing “service charges,” online retailer “processing fees.” If a charge is unavoidable, it belongs in the first price the customer sees. Labeling a fee “optional” does not cure the problem when the customer cannot actually decline it. The Attorney General’s office has flagged this as a priority enforcement area.
Sale Prices, Discounts, and Former-Price Claims
Advertising a “sale” or “discount” price requires a legitimate reference point. Business and Professions Code Section 17501 provides that any price advertised as a “former price” must have been the prevailing market price within the three months immediately before the advertisement ran.3California Legislative Information. California Code BPC 17501 If the former price is older than three months, the ad must clearly and conspicuously state the exact date it was in effect.
“Prevailing market price” means the actual retail price at which the item was offered in that locality. It is not the manufacturer’s suggested retail price, and it is not an internal reference number a business writes down and never charges. A price the seller never actually asked for is a fictitious discount.
In People v. Overstock.com, Inc. (2017), a court found that Overstock displayed inflated “List Price” and “Compare at” figures next to its selling prices to create the impression of steep discounts, and imposed $6.8 million in civil penalties for violations of both the False Advertising Law and the Unfair Competition Law.4Justia Law. People v. Overstock.Com, Inc. Swapping the label from “former price” to “list price” or “compare at” does not save the comparison if the number is still misleading.
Federal rules reinforce the state standard. The FTC’s Guides Against Deceptive Pricing require any former price used in a comparison to have been a bona fide price at which the article was offered to the public on a regular basis for a reasonably substantial period.5eCFR. 16 CFR 233.1 – Former Price Comparisons A California retailer has to clear both bars.
Bait-and-Switch
Business and Professions Code Section 17500 makes it unlawful to advertise goods or services “as part of a plan or scheme with the intent not to sell” them at the advertised price.6California Legislative Information. California Code BPC 17500 The Consumers Legal Remedies Act adds a parallel prohibition on advertising goods with intent not to sell them as advertised, or with intent not to meet reasonably expectable demand unless the ad discloses a quantity limitation.2California Legislative Information. California Code Civil Code 1770
Two patterns draw enforcement attention. The first is the classic switch: advertise a low price on a specific item, then tell arriving customers it is unavailable and steer them to something pricier. Deliberately understocking a sale item while training staff to upsell fits this pattern. The second shows up in auto repair and home improvement, where a business advertises a cheap inspection or diagnostic fee and then insists on extensive additional work before releasing the vehicle or finishing the job.
Intent is the pivotal element. Running out of a genuinely popular sale item on day one is not automatic liability. Advertising deals the business never had inventory to fulfill is. Disclosing quantity limits or “while supplies last” helps, but only if the underlying stock was reasonable.
Subscription and Automatic Renewal Pricing
California’s Automatic Renewal Law, at Business and Professions Code Sections 17600 through 17606, governs any business that charges consumers on a recurring basis. It covers gym memberships, streaming services, subscription boxes, and anything else that keeps billing until the customer stops it.
Before the consumer completes the purchase, the business has to clearly and conspicuously disclose:
- That the subscription continues until the consumer cancels.
- How to cancel, and what the process involves.
- The recurring charge amount, and whether it may change.
- Any minimum purchase obligation.
“Clear and conspicuous” is defined in the statute as larger type than the surrounding text, contrasting type or color, or set off by symbols that draw attention.7California Legislative Information. California Code BPC 17600-17606 – Automatic Renewal Law Burying the renewal terms in fine print fails the standard. The business also has to obtain the consumer’s affirmative consent to those terms before charging, and keep proof of that consent for at least three years, or one year after the contract ends, whichever is longer.
Cancellation is where most companies stumble. California requires a toll-free number, an email address, or another mechanism that lets the consumer cancel without unnecessary friction. A one-click signup paired with a multi-step phone maze to cancel is exactly the asymmetry regulators target.
Criminal and Civil Penalties
Pricing violations run on two tracks, and a business can face both at once.
Criminal Under the False Advertising Law
A violation of Business and Professions Code Section 17500 is a misdemeanor punishable by up to six months in county jail, a fine of up to $2,500, or both.6California Legislative Information. California Code BPC 17500 Criminal prosecution requires proof that the business knew, or should have known with reasonable care, that its advertising was untrue or misleading. Charges more often land on individual bad actors and repeat offenders; regulators typically prefer the civil route against larger companies.
Civil Under the Unfair Competition Law
The Unfair Competition Law allows civil penalties of up to $2,500 per violation, and each deceptive advertisement or transaction can count separately.8California Legislative Information. California Code Business and Professions Code 17206 For a retailer running a misleading promotion across many locations or online, violations pile into the thousands. Courts weigh the seriousness of the misconduct, the number of violations, how long the conduct lasted, and willfulness. That per-violation math is where the real exposure lives for businesses operating at scale.
Injunctions
Under Section 17535, courts can issue whatever relief is necessary to prevent continued violations, including receivership in extreme cases.9California Legislative Information. California Code Business and Professions Code 17535 Injunctions frequently require revised advertising practices and compliance monitoring. Violating one triggers contempt consequences that are worse than the original penalty.
Who Can Bring an Action
The Attorney General
Under Business and Professions Code Section 17535, the Attorney General can seek injunctions and restitution against any business violating the False Advertising Law.9California Legislative Information. California Code Business and Professions Code 17535 Under Section 17508, the AG can demand substantiation for factual advertising claims and seek relief if the business fails to respond adequately.10Justia Law. California Code Business and Professions Code 17500-17509
District Attorneys and City Attorneys
Local prosecutors have independent authority. District attorneys, county counsel, and city attorneys in cities over 750,000 can file civil actions and pursue the same $2,500-per-violation penalties as the AG.8California Legislative Information. California Code Business and Professions Code 17206 Many county DA offices run consumer protection units that monitor advertising practices. A single county prosecutor can obtain statewide relief.
Industry Regulators
The California Department of Consumer Affairs oversees licensing boards whose Division of Investigation handles Business and Professions Code violations.11Department of Consumer Affairs. Enforcement – Department of Consumer Affairs For advertised pricing, the Bureau of Automotive Repair and the Contractors State License Board are the most active. Administrative sanctions can include license suspension or revocation on top of civil or criminal penalties.
Individual Consumers
The Unfair Competition Law allows a consumer who suffered “injury in fact” and lost money or property because of deceptive pricing to sue for restitution. Courts can order the business to return money obtained through unfair or unlawful practices without individualized proof from every affected consumer.12California State Legislature. A Primer on Business and Professions Code Section 17200 The typical measure for a misleading discount is the gap between what the consumer paid and what they would have paid without the deception.
The Consumers Legal Remedies Act, at Civil Code Section 1750 and following, goes further. It specifically prohibits false statements about price reductions, advertising with intent not to sell as advertised, and advertising a price that does not include all mandatory fees.2California Legislative Information. California Code Civil Code 1770 The CLRA allows recovery of actual damages, and punitive damages where the violation was willful. Class actions under the CLRA are common and can produce refunds, vouchers, and court-supervised changes to advertising.
Voluntary refunds or store credits before litigation can limit exposure but do not immunize a company from enforcement if the underlying practice was systematic. Regulators care whether the root cause got fixed.
Federal Rules That Stack On Top
California businesses also answer to federal law. Section 5 of the Federal Trade Commission Act prohibits unfair or deceptive acts or practices, which covers misleading price representations, and the FTC’s Guides Against Deceptive Pricing set national standards for former-price and comparison claims that largely parallel California’s rules.5eCFR. 16 CFR 233.1 – Former Price Comparisons
For subscription businesses, the federal Restore Online Shoppers’ Confidence Act (ROSCA) prohibits charging consumers through negative-option features without clearly disclosing all material terms and getting informed consent. The FTC finalized a broader “Click-to-Cancel” rule in 2024, but the Eighth Circuit vacated it on procedural grounds. As of early 2026, the FTC has issued an advance notice of proposed rulemaking to revisit subscription and negative-option practices.13Federal Trade Commission. Federal Trade Commission Announces Final Click-to-Cancel Rule For now, California’s Automatic Renewal Law remains the more demanding standard for anyone billing California consumers on a recurring basis.