Guide to Laws for Consumers in California

This is a guide to consumer rights or “shoppers rights” for Californians. These apply to buying just about any product or service in California, whether you purchase in store or online. There are also several federal rules that apply, which you can find at our Guide to Laws for Consumers in the U.S.

Also see our Guide to Exercising Your Rights and Resolving Disputes.

1. General consumer rights

What are junk fees, and are they illegal in California?

Junk fees are where a business tacks on surcharges or other fees without notifying you about these upfront. These are often added by restaurants at the end of the bill. As of July 1, 2024, these fees are illegal in California.

What are my rights regarding debt collection?

See our page on What Happens if Your Account is Sent to Collections?

Is price gouging illegal in California?

Yes, it is illegal to increase the price of a product or service more than 10% in the 30 days following a declaration of a state of emergency.1California Penal Code Sec 396

What is a contract?

See our Guide to Contracts and Agreements in California.

What can I do if my product doesn’t meet my expectations? 

You may reject (refuse to accept) a product that turns out to be different from what you expected based on a written agreement/contract. (Note: if you have already “accepted” the product, you may still reject it within a reasonable period of time, generally a few days). The seller would then have an opportunity to fix the problem, and if it does so, you must then accept the product. But if the seller doesn’t fix it, you may cancel the purchase.2Cal Commercial Code 26012608, 2711(1)

What if my product is defective? (Lemon Law).

See our Guide to Laws about Defective Products.

What if a construction or renovation project is defective?

You may be able to sue for negligent construction. See Construction Defects.

Are there any rules about shipping time? 

When you buy something on the internet, the seller must ship the goods within the time frame it gives you (or within 30 days), otherwise you have the right to cancel the purchase.3Federal Trade Commission rule found at Code of Federal Regulations, Title 16, Part 435

What can I do about a company that seems to be lying or doing other shady things?

This is generally called “deceptive business practices” or sometimes “unfair competition” or “unfair trade practice.” This can mean many things, but essentially it means that businesses must not do unethical things. In particular, they must be truthful about their products and services. Businesses may not engage in deceptive or unfair marketing, including “false advertising” or other business practices.4California Unfair Competition Law; California Consumers Legal Remedies Act; Section 5 of Federal Trade Commission Act, 15 U.S.C. Sec 45  It can also apply to companies advertising goods without having the expected demand in stock, representing a repair is needed when it is not, representing rebates that have hidden conditions, and misrepresenting the authority of a salesman to close a deal. See here and here for some examples.

Can a chatbot pretend to be a human to sell me something?

No, in California, chatbots must disclose that they are not human.5SB 1001

Can a business require me to agree not to criticize them on Yelp, social media, or other places?

No. Many businesses are starting to put in a “non-disparagement” clause in contracts to prevent consumers who use their products or services from writing negative reviews. But these clauses are illegal and a business cannot prevent a consumer from sharing their “honest opinions” about the business’s products or services.6CA Civil Code 1670.8Consumer Fairness Review Act But that does NOT mean you can post things that are harassing, abusive, or false or misleading, or generally defamatory.

2. Consumer privacy & intrusions

Do I have the right to know what information a business has about me and get it removed?

As of January 2020, Californians have new rights under the California Consumer Privacy Act:

  1. Right to know what “personal information” a business has about you (whether collected online OR offline).
  2. Right to have companies delete that personal information. This is often referred to as the “right to be forgotten.”
  3. Right to opt-out or prohibit companies from selling that information. Children under the age of 16 must provide opt in consent, with a parent or guardian consenting for children under 13.

See much more about this at our guide What Rights do Californians Have in their Personal Information and Data?

What happens if a company gets hacked and my information is stolen?

Under the California Consumer Privacy Act, you will be able to sue companies if a data breach leads to your unencrypted information being exposed or stolen. 7These rights come from the recently passed California Consumer Privacy Act (CCPA). AB 375 (2018)

Is telemarketing legal? 

Companies must check the national “Do Not Call” registry before calling you, and if you and if you are on the list they cannot call you. However, this does not apply to non profits or charities, political calls, debt collectors, or surveys.

What is a robocall and is it illegal?

A robocall or “robo call” (as in, a call from a robot) is a recorded message that plays when you answer the phone or which is left on your voicemail. The calls are made through an autodial device. The rules for robocalls are different for cell phones vs landlines (non cell).

For calls to cell phones:

Robocalls to cell phones are NOT permitted without the recipients’ prior consent. This applies to for profit companies as well as non profits, charities, and political organizations.8Telephone Consumer Protection Act; 47 U.S.C. § 227(b)(1)(A)

For calls to landlines:

California prohibits any robocall unless there is an existing relationship. This applies to for profit companies as well as political campaigns.9California Public Utilities Code §§ 2871 et seq.

See more at the FCC website and the California Public Utilities Commission website.

Are spam texts illegal?

Yes, the same rules for robocalls to cell phones apply to “robotexts” text messages. Companies and organizations may not robotext without your prior consent.

3. Getting out of a contract or service agreement

Help! I signed a contract but now I changed my mind. What are my options?

Cancelling certain types of contracts: In California, you have the right to
cancel
 contracts (no reason necessary) for certain types of sales or transactions, such as dental services or gym memberships, within a specified time period after signing the contract. These are often referred to as cooling off periods. Usually the seller is not allowed to charge you a cancellation fee or termination fee (we will specify when the seller is allowed to do so), but may charge a prorated amount for any time or services used before cancelling. See the list of contract cooling off periods.

And whether or not there is a cooling off period, there is almost always the possibility of cancelling or terminating any agreement or contract you enter into, at any time, but there is often a cost associated with this (sometimes a “termination fee” or “cancellation fee.”) Check your contract for this provision – it’s often called a section called “termination” (but if the contract says nothing about this then you will need to negotiate this with the other parties to the contract).

Cancelling contracts in general: You may also have a right to cancel a contract if:10CA Civ. Code Sec. 1689

  • the seller lied about a substantial aspect of the transaction (and you can prove it),
  • you gave consent by mistake or under extreme pressure,
  • the agreement falls through for some reason not that was not your fault

Invalid contract: You may not even need to cancel a contract if it isn’t valid, which would occur if:

  • Your consent to it was obtained through fraud — for example, if you were not aware that the document you signed was a contract.11See Jones v. Adams Financial Services (1999) 71 Cal.App.4th 831, 839 [84 Cal.Rptr.2d 151, 157]
  • The contract or a clause in a contract is shockingly unfair12Civ. Code Sec. 1670.5(a)

4. Banking, Loans & Credit Cards

Does my bank need to ask me before signing me up for overdraft protection? 

Yes. If you attempt to pay for something but don’t have enough money in your bank account, your bank is not allowed to automatically let the transaction to go through and then charge you an overdraft fee. It MUST ask you whether you want to make the overdraft & pay the fee OR have the bank decline the transaction.13Federal Reserve regulations found in 12 CFR Part 205

When must my bank legally make my deposited funds available?

If you make a deposit to a bank in person, the bank must make the funds available by the next business day. If you make a deposit electronically after business hours, the bank must make the funds available by the second business day.1412 CFR 229.10

Are there any rules about depositing large amounts of money?

Yes. If you deposit in a bank more than $10,000 cash (meaning actual bills, not checks, except cashier’s check) at a time, the bank must report this to the IRS.1531 USC 5313 Also if you make several deposits of less than $10,000 that are “structured” in order to evade reporting requirements, this is a crime.16Bank Secrecy Act at 31 USC 5324

In addition, if you receive more than $10,000 in cash (which can include cashier’s check) for a business transaction or multiple related transactions, you must report this within 15 days to the IRS using Form 8300.

Credit card fees: Is it legal for stores and other merchants in California to charge you a fee for using a credit card to buy something?

Merchants are not allowed to mislead customers by hiding any differences between credit card, debit card, and cash prices. If a merchant fails to clearly and prominently disclose—before you pay or seek to pay for an item—what it will charge for the item, including any additional fees, that may violate California laws prohibiting deceptive or false advertising.

Is there a limit to how much interest a lender can charge for a loan?

Loans at high interest rates are often referred to as “predatory lending,” and many laws are aimed at preventing this practice.

For loan amounts less than $2,500, lenders may not charge more than 1.6% per month (or about 20% per year).17California Financing Law, California Finance Code 22303, 22304

For amounts of $2,500 to $9,999, lenders may not charge more than 36% per year.18AB 539

For amounts $10,000 and above, there is no limit. California has “usury laws” which generally prohibit charging interest on a loan at higher than 10% per year. But this doesn’t apply to banks, credit unions, finance companies, pawn brokers.19California Constitution, Article XV

What are the rules on payday lenders?

The fee cannot be more than 15% of the check, and the check cannot be more than $300. Thus the total amount a consumer can loan from a payday lender is $255 ($300-$45 fee). Payday loans cannot be longer than 31 days. Lenders can give extensions of time for consumers to pay but cannot charge for extensions.

See more at the Department of Business Oversight.

5. Gift Cards

Can a gift certificate or gift card have an expiration date?

Generally, no, except for those that:20California Civil Code Section 1749.5

  • can be used with multiple unaffiliated sellers,
  • are given at no charge as part of a loyalty or rewards program, OR
  • are issued for perishable food items.

Does a retailer have to give me the cash value of a gift card or certificate?

Only if it’s worth less than $10.21California Civil Code section 1749.5(b)(2)

Can a gift card have a service fee?

Generally no, with some exceptions.22Exceptions are those where: (1) The remaining value of the gift card is five dollars ($5) or less each time the fee is assessed. (2) The fee does not exceed one dollar ($1) per month. (3) There has been no activity on the gift card for 24 consecutive months, including, but not limited to, purchases, the adding of value, or balance inquiries. (4) The holder may reload or add value to the gift card. (5) A statement is printed on the gift card in at least 10-point font stating the amount of the fee, how often the fee will occur, that the fee is triggered by inactivity of the gift card, and at what point the fee will be charged. The statement may appear on the front or back of the gift card, but shall appear in a location where it is visible to any purchaser prior to the purchase thereof.

California Civil Code Section 1749.5

See more about gift cards here.

6. Restaurants

What rights do restaurant customers have?

See our Guide to the Law for Restaurants and Their Customers.

7. Other

There are many more consumer rights on the federal level. See our Guide to Laws for Consumers in the U.S.


Exercise Your Rights

To cancel a contract: In order to cancel, you only need to give the seller written notice (send a letter or email) of cancellation within the period allowed. Be sure to keep a record of this letter or email.

To exercise your other consumer rights: If you feel that one or more of the above laws applies to you, you should first talk to the seller/bank about it and tell them you know the law. If they won’t fix the issue, you can do any of the following:

  • If you have a consumer dispute with a company, FairShake can help resolve it easily!
  • Contact a consumer attorney
  • If it’s about a purchase, file a complaint with the California Department of Consumer Affairs
  • If an online seller hasn’t shipped within the timeframe they gave you (or within 30 days), file a complaint here
  • If it’s about banking, credit, or a mortgage, file a complaint with the Consumer Financial Protection Bureau
  • If the amount in question is $12,500 or less, you can sue in small claims court.

Related Pages

Guide to Laws for Consumers in the U.S.

Privacy Laws

Business Law

See all Legal Guides


Photo credit: Photo by charlesdeluvio on Unsplash

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