California’s AB 483 Introduces New Transparency Standards for Consumer Contracts
On October 14, 2025, California Governor Gavin Newsom signed Assembly Bill 483 into law, establishing new transparency requirements and capping fees associated with early termination of fixed-term contracts, reports 24brussels.
This legislation targets practices where consumers encounter substantial fees when attempting to cancel installment contracts, which allow for staggered payments for goods and services. Under the new law, companies are prohibited from obscuring early termination fee disclosures with fine print or hyperlinks, and the maximum fee has been limited to 30 percent of the total contract cost.
The bill aims to improve clarity for Californians, ensuring that they can compare services without being blindsided by hidden charges. This legislative move is particularly relevant for contracts that entice consumers with installment payment options while imposing significant cancellation fees for not committing to a full term.
California Assembly member Jacqui Irwin stated, “Too many Californians have been shocked by outrageous early termination fees when they try to end an installment subscription early. With AB 483, Californians will know exactly what type of termination fees they may have to pay – and those fees will never exceed a fair limit. Keeping these agreements transparent and predictable is a win for consumers across the state.”
The announcement comes amidst a backdrop of increasing scrutiny on consumer protection. Federal Communications Commission chair Brendan Carr has faced criticism for proposals that could reintroduce hidden fees for internet service providers, raising concerns over the erosion of consumer rights. Additionally, the ongoing lawsuit against Adobe, which has been accused of concealing costly cancellation fees and locking consumers into expensive annual subscriptions, underscores the relevance of California’s new law. As this measure potentially sets a national benchmark, it could compel Adobe and similar companies to reevaluate their contract termination policies.
This legislative development in California represents a significant step towards enhancing consumer rights across the United States, aiming to foster a fairer marketplace where transparency prevails.
