Junk Fees are Disappearing in Massachusetts, Except When Purchasing a Car | Carscoops

      Massachusetts has implemented new transparency regulations targeting junk fees for hotels and ticketing, while car dealerships remain largely unaffected by existing regulations.

      The state's junk fee transparency rules officially came into effect on September 2. Car dealerships are primarily exempt due to established provisions in state advertising laws. However, dealers are still required to avoid misrepresenting fees and must follow rules regarding subscription services.

      Purchasing a vehicle from a dealership is among the least favored retail experiences in the U.S., partly due to the common practice of adding junk fees. With the recent introduction of transparency rules in Massachusetts, aimed at clarifying these fees, it appears that dealers may not have to make significant changes.

      Under pressure from dealer lobbying groups, the state removed provisions that would have altered the way dealerships operate.

      These new regulations, led by Attorney General Andrea Campbell, focus on hidden or incremental fees across various industries, including hotels, concert ticketing, and online shopping. Businesses are now required to display a product's full price, incorporating all mandatory fees except for government taxes and shipping costs. Additionally, they must clearly indicate which charges are optional.

      Dealers were not in favor of these changes. For years, they have been subjected to state motor vehicle regulations that disallow price advertisements excluding fees related to freight, handling, preparation, or documentation. In many respects, most dealerships are already in line with these new requirements. However, they do not receive an overall exemption.

      The updated regulations prevent businesses, including dealerships, from unlawfully misrepresenting fees. They also introduce new stipulations regarding trial offers and 'negative option' billing, which involves recurring charges that activate unless canceled by the customer. Legal experts in the industry maintain that the exemption for dealers is reasonable.

      Thomas Quinn, a partner at Hudson Cook, remarked to AutoNews that it’s straightforward, highlighting that compliance for bundled satellite radio subscriptions falls to the provider rather than the dealer. Moreover, finance and insurance products, typically included as part of a loan, do not qualify as negative options.

      Robert O’Koniewski, executive vice president and general counsel of the Massachusetts State Automobile Dealers Association, expressed his satisfaction that the initial plan was “very burdensome for dealers.” He believes that the state has done “a very good job” considering the lobby’s feedback.

      For now, it remains to be seen whether the customer experience will improve, decline, or largely remain the same in Massachusetts.