New Jersey puts businesses on notice: hidden ‘junk fees’ may violate consumer fraud law

New Jersey is launching a broad attack on “junk fees,” putting businesses on notice that hidden, misleading or worthless charges may violate one of the nation’s strongest consumer protection laws.

Gov. Mikie Sherrill and Attorney General Jennifer Davenport announced the initiative June 15, saying the state will use both agency review and enforcement powers to crack down on fees that make advertised prices look lower than what consumers actually pay.

The action includes an executive order requiring state agencies to identify junk fees in their areas, recommend rulemaking where needed and propose ways to make “all-in” pricing and clear fee disclosure standard across New Jersey by September 14.

At the same time, the Attorney General’s Office and the Division of Consumer Affairs issued an enforcement statement warning that certain fee practices may already be illegal under the New Jersey Consumer Fraud Act. The statement does not create a new law, but it tells businesses how state regulators intend to interpret and enforce existing law.

A legal analysis by Consumer Finance Monitor called the statement one of the most comprehensive state-level pronouncements so far on junk fees, especially because it reaches beyond simple disclosure issues into questions of whether a fee is excessive, abusive or provides little value.

What New Jersey is targeting

The enforcement statement identifies several common practices that may trigger scrutiny:

• Advertising a low price and adding mandatory fees later in the transaction.
• Hiding costs in fine print.
• Using websites or apps designed to make fees hard to notice.
• Misrepresenting what a fee is for or whether it is required.
• Using vague language to tack on overpriced or useless fees that provide little or no benefit to consumers.

That means the target is not just the classic “resort fee” added at checkout. New Jersey officials say junk fees may show up in housing, auto sales, lending, travel, delivery services and other everyday transactions. Consumer Finance Monitor noted that the statement is especially significant for banks, nonbank lenders, fintech companies, auto finance companies, mortgage lenders and servicers because many of the examples resemble past consumer-finance enforcement theories.

Attorney General Davenport framed the issue as an affordability problem.

“Hidden and worthless junk fees are increasing costs for families, and we are putting New Jersey businesses on notice that we won’t hesitate to act when we see them,” Davenport said in the state announcement.

A broader theory of junk fees

Many junk-fee laws focus on price transparency: tell the consumer the real price up front and do not wait until checkout to reveal mandatory charges.

New Jersey appears to be going further. According to Consumer Finance Monitor’s review, the enforcement statement suggests that even disclosed fees may be challenged if they are misleadingly described, inadequately explained, disproportionate to the value provided or structured in a way that undermines real consumer consent.

That could matter in industries where consumers are sold add-on products, optional services or bundled charges at the end of a transaction. Examples include auto-finance add-ons, duplicative insurance products, optional products embedded in monthly payments, and electronic-signature practices that may make it hard for consumers to understand what they are buying.

The enforcement statement also flags “dark patterns” — website or app designs that steer consumers toward choices they might not otherwise make. Regulators may look at buried disclosures, confusing pop-ups, manipulated font sizes, complex click-through steps or layouts that make fees hard to identify, Consumer Finance Monitor, a legal blog, said.

Rental housing is a major focus

Housing costs are a central part of the New Jersey initiative. State officials specifically cited hidden rental costs, application fees and mandatory charges that can make the advertised rent far lower than the real monthly cost.

The state said the junk-fee push follows several recent actions, including April guidance on New Jersey’s new $50 cap on rental application fees and a bipartisan effort led by Davenport urging the FTC to regulate hidden and deceptive rental housing fees.

The timing also reflects New Jersey’s preparations for the 2026 FIFA World Cup, when the state expects a surge of visitors. In May, the Division of Consumer Affairs warned hotels and short-term rental providers against hidden fees and deceptive pricing tactics.

Federal action is narrower

The Federal Trade Commission’s junk-fee rule took effect May 12, 2025, and applies to live-event tickets and short-term lodging. It prohibits bait-and-switch pricing and tactics that obscure total prices and fees in those sectors.

New Jersey’s move is broader because it relies on the state Consumer Fraud Act, which can reach deceptive, abusive or unconscionable commercial practices across many types of consumer transactions. The state says businesses may face enforcement if they use hidden fees, surprise charges or manipulative designs that prevent consumers from knowing the real cost.

Consumer Finance Monitor noted that the state approach arrives as the CFPB has retreated from the aggressive junk-fee agenda it pursued under former Director Rohit Chopra, leaving state attorneys general and the FTC to play a larger role.

Why it matters

Junk fees have become a major consumer-policy issue because they make comparison shopping harder. A consumer may choose an apartment, hotel room, delivery order, loan or ticket based on an advertised price, only to find that mandatory fees raise the true cost later.

Consumer advocates say the practice rewards companies that hide costs and punishes businesses that advertise honest prices. Industry lawyers, meanwhile, are warning businesses that New Jersey’s enforcement statement may expose them to scrutiny even when fees are technically disclosed.

That is the key shift: New Jersey is not just saying “disclose the fee.” It is saying that regulators may ask whether the fee was explained clearly, whether the consumer truly consented, whether the charge was buried in a confusing transaction and whether the fee provided meaningful value.

What consumers can do

New Jersey is encouraging consumers to report junk fees to the Division of Consumer Affairs through its new “Fight the Fees” materials and complaint process. (NJ.gov)

Consumers should watch for:

• Advertised prices that rise sharply at checkout.
• Mandatory “service,” “processing,” “convenience,” “administrative” or “technology” fees.
• Rental listings that leave out monthly add-on charges.
• Loan or auto-sale documents with bundled products inside the payment.
• Pre-checked boxes or electronic forms that add optional services automatically.
• Fees described in vague terms without a clear explanation of who gets the money or what the consumer receives.

The bottom line

New Jersey’s message to businesses is blunt: the real price should not be a surprise, and a fee that adds little value may be more than just annoying — it may be unlawful.

For consumers, the enforcement statement gives new weight to a familiar complaint: the price advertised at the beginning of a transaction should be the price they can actually compare, understand and rely on.