Existing law makes it unlawful for any person doing business in California and advertising to consumers in California to make any false or misleading advertising claim. Existing law makes various unfair competition practices unlawful, including any unlawful, unfair, or fraudulent business act or practice and unfair, deceptive, untrue, or misleading advertising.
Existing law regulates how a contract may be extinguished, and prescribes requirements for the formation and cancellation of certain contracts, including dating service contracts, weight loss contracts, and home equity sales contracts.
This bill would, for contracts entered into or modified on or after January 1, 2026, prohibit a fixed term installment contract, as defined, from charging a fee to a consumer who terminates the fixed term installment contract unless, at the time of entering the initial contract, the initial contract includes an explanation of the total cost of the cancellation fee or the method by which the fee is calculated, as provided. The bill would also prohibit a fixed term installment contract from charging a cancellation fee, termination fee, or any similar fee in an amount greater than 20% of the total cost of the contract.