Massachusetts AG Issues Final “Junk Fee” and Subscription Regulations

You know that moment when something costs $19.99… until it doesn’t? You click “Checkout,” and suddenly a
mysterious “processing fee,” a “service fee,” a “mandatory convenience fee” (convenience for who?) and a
“we swear this is required by the laws of physics” fee appear like uninvited guests at a cookout.

Massachusetts is officially over it. The Massachusetts Attorney General’s Office has issued final regulations aimed
at stopping hidden “junk fees” and cleaning up the dark arts of subscriptions, free trials, and auto-renew plans.
Translation: if you sell to Massachusetts consumers, you may need to rethink how you display prices, describe fees,
and let people cancel recurring chargeswithout turning cancellation into an escape room.

What the Massachusetts “junk fee” rules actually are

The regulations (known as 940 CMR 38.00) treat certain pricing and subscription practices as
unfair or deceptive under Massachusetts consumer protection law. They apply broadly to advertising,
marketing, solicitation, or offers that are targeted to Massachusetts or that result in a sale
in Massachusettseven if the business is located somewhere else.

This matters because the rules aren’t limited to one industry. They can affect restaurants, gyms, ticketing,
delivery apps, rentals, ecommerce, software subscriptions, and any business where the final price has a habit of
“evolving” between the ad and the checkout page.

Defining “junk fees” without using the phrase “it depends” too much

The rules don’t ban every fee. Instead, they focus on a simple idea: consumers should know the
maximum price they must pay before they get emotionally attached to buying.

Total Price: the number that should have been there from the start

Under the regulations, the Total Price generally means the maximum price a consumer must pay for a
product or service, including all fees, charges, or other expenses. If a mandatory add-on is part
of the same transaction, that has to be included too. (So if the “mandatory protection plan” is basically a cover
charge, it can’t be hiding in the shadows.)

Some items may be handled differently at specific stageslike shipping and certain
government-imposed chargesbut the core theme stays the same: no price “gotchas.”

Optional vs. mandatory: the difference between a choice and a trapdoor

The rules also care about whether a fee is optional or waivable. If a charge can be
avoided (say, a fee that disappears if you pick a different payment method or decline an add-on), businesses should
clearly say so and give straightforward instructions on how to avoid it.

“Clearly and conspicuously” means: don’t whisper the important part

Disclosures need to be easy for ordinary consumers to notice and understand. Online, the idea is that required
disclosures shouldn’t be avoidable (no burying the truth behind extra clicks, tiny type, or “hover here to learn
why we’re charging you $8”).

The new pricing playbook: show the real price early, show it often

If your current pricing flow is “tease them with a low number, then reveal the real number later,” Massachusetts
is basically saying: “Nope. We’re not doing jump scares with money.”

1) At the first price you show, disclose the Total Price

When you initially present a price (and in later price presentations too), you generally must disclose the
Total Price clearly and conspicuously. Not “starting at,” not “from,” not “$29.99*”
where the asterisk leads to a novel. The Total Price is supposed to be part of the main story, not a post-credit scene.

2) Break out what’s includedso people understand what they’re paying for

When you show the Total Price up front, you also need to disclose the nature, purpose, and amount
of fees or charges that apply because of the purchase (with certain treatment for shipping and government charges).
The point isn’t to overwhelm people with a spreadsheet; it’s to prevent vague labels like “fees: yes.”

3) If a fee is avoidable, say thatand explain how

If a charge is optional or can be waived by the seller, the consumer should be told that it’s avoidable, plus given
readily available instructions to avoid it. In practice, this pushes businesses away from “we added it by default,
good luck finding the off switch.”

4) Before the final “Buy” moment, disclose the full final transaction amount

Right before the sale, the rules expect a final presentation that includes the
final transaction amountincluding Total Price for everything purchased, plus applicable shipping
and government charges. This is the moment where the consumer sees the full bottom line and can decide whether
they still love the product once it has its full-price face on.

5) Don’t collect personal or billing information before you reveal the Total Price

Another major theme: disclose Total Price before requiring personal information (including billing information),
with limited exceptions for things like underwriting, checking availability, legality, or certain pricing elements
approved by Massachusetts financial or insurance regulators.

6) Stop pretending your fee is “required by law” (unless it really is)

The rules also target misrepresentationslike claiming a fee is legally required when it’s really a business choice.
If you’re passing through a cost you could absorb (or label differently), don’t dress it up like it was
handed down on a stone tablet.

Subscriptions, free trials, and auto-renew: Massachusetts wants cancellation to be… possible

Hidden fees are only half the story. The other half is the subscription ecosystem: free trials that quietly become
paid plans, memberships that renew forever, and cancellation flows that feel like they were designed by a villain
who hates joy.

Trial offers: “free” should not mean “surprise billing later”

For a Trial Offer, businesses must disclose, in writing and clearly, key information
before the consumer accepts. That includes:

• Any financial obligations that could kick in from accepting the trial
• What products/services could lead to charges
• How to reject or cancel before being charged
• The deadline to cancel to avoid charges
• The date charges will begin if the consumer doesn’t cancel

Negative option features: auto-renew and “silence means yes” arrangements

The regulations define a Negative Option Feature broadlyautomatic renewal plans, continuity plans,
free-to-pay conversions, and other setups where inaction is treated as consent to keep paying.

Before purchase, businesses must disclose in writing and clearly:

• That the consumer will be charged (or charges will increase after any trial ends)
• If applicable, that charges recur unless the consumer cancels
• How to cancel to avoid being charged

Cancellation must be a “simple mechanism,” not a quest

The rules require a simple cancellation mechanism that immediately stops recurring charges and is
at least as easy to access and use as the method used to sign up.

Practically, that pushes businesses toward symmetry:

• If consumers can sign up online, they should be able to cancel online.
• If consumers enroll by phone, there should be a workable phone cancellation path.
• If consumers enroll in person, the rules still expect online or phone cancellation options (and sometimes an in-person option where practical).

Renewal reminders: if it’s longer than 31 days, don’t let the renewal sneak up

For negative option plans exceeding 31 days, the rules require written notice within a specific window before the
consumer’s cancel-by date to avoid another financial obligation. The notice needs to spell out what the consumer
will owe, what products are covered, how to cancel, and key dates.

For shorter-duration arrangements, the rules still push recurring transparencyeither through similar notice or by
providing regular disclosures that remind consumers what they’ve been charged and how to cancel.

Where businesses are most likely to feel friction (and how to reduce it)

Restaurants and service fees

Dining is a classic “fee surprise” zone: kitchen fees, service charges, credit card surcharges, and “wellness fees.”
The Massachusetts rules don’t say you can’t charge feesbut they pressure restaurants to make sure the customer can
understand the true cost before ordering, not after dessert arrives with the bill.

Delivery platforms

Delivery apps often show menu prices set by restaurants and then add platform fees. The regulations include a
specific provision for food and grocery delivery platforms, requiring clear disclosure of the maximum mandatory
charges or fees on the user interface whenever pricing information is displayed. In other words: don’t wait until
checkout to reveal the platform’s “support our servers’ emotional wellbeing” fee.

Rentals and leases

If a dwelling unit is advertised at a periodic rate (like monthly rent), the rules allow that kind of presentation,
but require disclosing the full period covered by the rent. That’s meant to reduce confusion when pricing is shown
in one unit while obligations exist in another.

Financial services and other regulated industries

The regulations recognize that some industries already have disclosure regimes (like Truth in Lending). Certain
compliance pathways can count as compliance with parts of these rules. For businesses in regulated spaces, that
means the “junk fee” effort may be more about mapping overlaps and gaps than reinventing every disclosure from
scratch.

A practical compliance checklist (for people who like sleeping at night)

1. Inventory every place you show a price. Ads, landing pages, product pages, carts, invoices, in-app screens,
   emails, SMSif a consumer can see a number, it counts.
2. Compute a true “Total Price” early. Identify mandatory fees, mandatory add-ons, and common bundles that must
   be included in the up-front figure.
3. Make the Total Price the star of the show. If your UI makes the base price big and the Total Price tiny,
   flip that arrangement.
4. Label fees in plain English. “Service fee” isn’t very informative. “Mandatory venue operations fee” is
   clearer, but even better is a short explanation users can understand without a decoder ring.
5. For avoidable fees, build “how to avoid” into the flow. If a fee can be waived, don’t hide the method in a FAQ
   labyrinth.
6. Don’t ask for billing info before pricing is clear. Check your funnel: price transparency should come before
   the consumer hands over sensitive information.
7. Rebuild subscriptions to be cancellable without drama. If sign-up is two clicks, cancellation shouldn’t be
   twelve steps and a phone call to a number that “mysteriously disconnects.”
8. Add renewal reminders where required. For longer negative option plans, set automated notices in the required
   window with the required dates and cancellation method.
9. Translate disclosures consistently. If you market in multiple languages, key pricing and cancellation
   disclosures should appear in each language used in the offer.

What consumers can do (besides sigh dramatically at checkout)

• Look for the Total Price early. If the first price you see isn’t the real price, treat it like a warning light.
• Screenshot the offer. If a later screen adds mandatory fees that weren’t disclosed, documentation matters.
• Check cancellation before you subscribe. A legit subscription should tell you how to cancel up front, not after you’ve paid three times.
• Watch for renewal notices. If a long-term plan renews, you should be reminded in a way that’s likely to be seen and understood.
• Ask “Is this required by law?” If a business claims it is, they should be able to explain it clearly.

Why this matters beyond Massachusetts

The big story isn’t just “Massachusetts did a thing.” It’s that pricing transparency is becoming a national
expectation. Consumers compare screenshots, share checkout totals, and abandon carts in seconds. Regulations like
940 CMR 38.00 don’t just change legal risk; they change what customers consider normaland what they consider shady.

Businesses that treat price transparency as a trust-building feature (instead of a compliance chore) may find the
rules are less a burden and more an excuse to clean up messy pricing systems that were already costing them sales.
If your cart abandonment rate had a villain origin story, hidden fees were probably involved.

Experiences from the real world: what “junk fee” compliance looks like in practice (and what people learn the hard way)

Even though the regulations read like legal prose, the day-to-day experience is surprisingly human: customers want
clarity, employees want fewer angry conversations, and businesses want predictable revenue without stepping on a
regulatory rake. Here are common real-world scenarios businesses and consumers have run into as “junk fee” and
subscription rules get taken seriously.

1) The restaurant that didn’t think the “kitchen fee” was a big dealuntil it was

A neighborhood restaurant adds a 3% “kitchen appreciation fee” to every bill. Management assumes it’s fine because
the fee is listed at the bottom of the receipt and mentioned somewhere on a social post from last year. But
customers don’t read receipts like mystery novelsthey read menus. The first time a table notices the fee is often
the worst possible moment: after they’ve eaten, when the bill arrives, and nobody’s feeling playful anymore.

The experience forces a change in mindset. Instead of “How do we justify the fee?” the better question becomes
“How do we communicate the real total price before someone orders?” Some restaurants respond by adjusting menu
prices to reflect the fee and shrinking the number of line-item surprises. Others keep the fee but make it
unmistakably visible at the point where pricing is first presented. The surprising result: fewer confrontations,
better tips for staff, and fewer one-star reviews that start with “I was blindsided.”

2) The ecommerce checkout that turned into a price transparency makeover

An online retailer runs ads that say “$49.99 + fees.” But the fees are mandatory, and the real amount most people
pay is $62.17. Customers click in expecting one number, then feel tricked when the cart shows another. The company
sees it in the metrics: healthy click-through rates, terrible conversion rates, and customer service tickets that
read like rage poetry.

When the business shifts to showing the Total Price earlier, something unexpected happens: the conversion rate
improves. Fewer people click, surebut the people who do click are actually prepared to buy. Internally, the team
stops spending time arguing with upset customers and starts spending time improving shipping speed and product
pages. Transparency doesn’t just reduce legal risk; it also acts like a filter that brings in better-qualified
buyers.

3) The subscription that was easy to start and “mysteriously difficult” to stop

A fitness app offers a free trial that converts to a paid annual plan. Users love the workoutsbut when they try to
cancel, the path is confusing: the cancel button is buried, the instructions are vague, and support replies take
days. The company’s short-term numbers look great because lots of people “forget” to cancel. But that growth is
fragile. Chargebacks increase, app store reviews tank, and long-term retention gets worse because customers feel
trapped rather than valued.

When cancellation becomes straightforward and the trial terms are spelled out clearly up front, the company loses a
slice of accidental revenuebut gains something sturdier: fewer refunds, fewer disputes, better reviews, and higher
lifetime value from customers who stick around because they want to, not because they couldn’t find the exit.
Ironically, making it easier to leave can make more people comfortable staying.

4) The “fee required by law” claim that boomeranged

Some businesses have historically labeled pass-through costs as “required” to reduce complaints. The problem is
that consumers have become fee-fluent. They compare notes, search quickly, and call out vague claims. When a fee is
framed as legally required but isn’t, the credibility damage can be worse than the fee itself.

The businesses that handle this well learn to separate mandatory government-imposed charges from
business-imposed charges and label them honestly. Customers may not love fees, but they dislike being misled
even more. In practice, plain language wins: “State filing fee” hits differently than “mandatory compliance fee”
with no explanation.

The big takeaway from these experiences is simple: the regulations push businesses toward the same behavior that
good customer relationships already requireclarity, consistency, and easy exits from recurring charges. In a world
where consumers can screenshot your checkout page faster than you can say “processing fee,” transparency is no
longer a nice-to-have. It’s the price of trust.