New Law Caps Early Termination Fees
A new rule has been signed into law by Governor Newsom, capping early termination fees in fixed-term installment contracts starting August 2026.
The law, AB 483, authored by Assemblymember Jacqui Irwin, limits early termination fees to 30% of the total sum consumers are obligated to pay under the contract.
- Installment contracts must provide clear and conspicuous written disclosure of the total termination-related fee.
- The formula used to calculate those fees must be disclosed.
- The highest possible termination fee the contract can levy must be disclosed.
"Too many Californians have been shocked by outrageous early termination fees when they try to end an installment subscription early," explained Assemblymember Irwin.
Author's summary: New law limits early termination fees in California.