NAD reviewed a variety of claims about the platform, including claims about fall detection accuracy, response times, false alarms, reductions in falls and emergency room visits, and cost savings. NAD found that many of the claims—including claims that staff are alerted in seconds, that the system generates very few false alarms, and that communities using the product experienced significant reductions in falls—were supported.

The more interesting issue involved the claim that the product was “proven to reduce falls, risk, and costs while elevating care.” SafelyYou submitted extensive evidence to support the claim and NAD agreed that the evidence showed an association between use of the system and improved outcomes. However, the evidence did not establish that the AI technology itself independently produced those results. Caregivers used information generated by the system to adjust care plans and interventions, and the studies did not isolate the AI from those human actions. Because the record did not establish causation, NAD recommended that the claim be modified or discontinued. 

The decision also demonstrates NAD’s continued focus on disclosures for AI performance claims. Although NAD found support for the claim that falls are detected with more than 99% accuracy, NAD recommended that SafelyYou disclose that the claim was based on a single study.

Advertisers can often establish that their products are associated with positive outcomes, but proving that a product independently causes those outcomes is a higher bar. Before describing AI as “proven” to deliver a result, advertisers should consider whether they can isolate the technology's contribution from human actions and other variables. If they can’t, they will likely need to modify the claim so that it more accurately reflects their substantiation. 

Rather than attempt to promulgate new trade regulation rules, which are subject to a host of substantive and procedural requirements, the FTC relies on existing Section 5 unfairness and deception principles to lay out potential UDAP issues with personalized pricing practices. Specifically, the Policy Statement suggests that consumers may be harmed when they are unaware that prices are personalized because they are unable to take steps to avoid potentially higher prices, such as shopping elsewhere or altering their browsing behavior. Although the statement signals heightened enforcement scrutiny in this area, it provides limited guidance on how the FTC intends to apply these principles in practice. 

As we previously discussed here, lawmakers and regulators at the state level have also taken an interest in regulating personalized pricing, sometimes referred to as “surveillance pricing.” States such as Maryland, Connecticut, New Jersey, and New York have all recently enacted prohibitions on and/or prescriptive requirements related to personalized pricing.  Other states have similarly expressed an intent to rely on existing state consumer protection authority to enforce conduct related to “surveillance pricing.”

The FTC’s Proposed Enforcement Policy Statement identifies several circumstances where FTC believes personalized pricing practices may raise concerns under Section 5: 

• Misrepresented static prices: where companies “represent, expressly or by implication, that price is static or widely offered when… it is personalized.”
• Inadequate disclosures: where companies fail to adequately disclose that a price is personalized.
• Misleading basis for price: where companies “mislead consumers as to the basis for the personalization of a price or the effect of that personalization,” for example, by leading consumers to believe “that a personalized price is a discount based on their purchase history with that retailer when it is in fact a higher price based on information about their disposable income or their shopping habits with other firms.”
• Lack of informed consent: where “businesses that base personalized prices on personal data of consumers without sufficiently verifying that consumers consented to the collection of those data for that purpose.” 

Interested parties will have 30 days following the Policy Statement’s publication in the Federal Register (which should occur shortly) to submit comments on the proposed enforcement policy statement.  Businesses that use personalized pricing should assess both their disclosure practices and the data inputs used to generate personalized prices to evaluate risk under the FTC’s Proposed Enforcement Policy Statement and related emerging state laws.  

Dreame disagreed that consumers would interpret the ads as Dyson suggested. Among other things, the company argued that its ads disclosed that the claim applied to shoulder-length-hair and that the disclosure appeared in a clear and conspicuous manner. NAD determined that many disclosures were not clear and conspicuous, however, noting that consumers would have to scroll to find them.

NAD noted that even in the examples where the claim explicitly mentioned shoulder-length hair, “nothing in the proximate text limits that claim to shoulder-length hair.” Thus, consumers looking at the models could reasonably believe that similar results are possible for longer hair. To avoid confusion, NAD held “the images and the text should match” or the ad should disclose “the claim does not apply to the length of hair depicted in the image.” 

Advertisers should take a close look at visuals that accompany performance claims. If the image suggests results that go beyond the substantiation, a disclosure may not be enough to untangle the problem. As NAD put it, the images and claims should generally match.

Notable amendments include a revised definition of “telephone solicitation” to expressly include ringless voicemail and text messages. The bill also replaces a previous carveout for instances when a call was made based on an “express request” by the called party, and instead implements a more prescriptive “prior express written consent” (PEWC) standard. The definition of PEWC adopted in the bill largely aligns with the federal TCPA rules. It retains, however, a separate existing carveout for calls or texts based on an established business relationship within the past 12 months.

In addition, the bill sets forth a new definition for “robocalls” characterized broadly as “a telephone solicitation that uses an automated dialing system to deliver prerecorded or artificial voice calls or messages,” and prohibits such calls to residential, business or wireless telephone lines without PEWC of the called party, unless the call is initiated for emergency purposes or is otherwise exempt under the statute.  

Other key provisions in the bill include: 

• New call time restrictions that will permit “telephone solicitations” only between the hours of 9:00 AM – 7:00 PM, with no such calls/texts permitted on Sundays. (PA already prohibited solicitations on holidays.)
• Reorganization of the telemarketer registration provisions, largely preserving existing exemptions, but also creating a new exemption for “[a] person or business that is not engaged in telemarketing because the calls or messages initiated by the person or business do not meet the requirements of telephone solicitation.” 
• Prohibition against unfair or deceptive acts or practices to obtain consent.
• Prohibition against the use of “any technology or any synthetic or computer-generated messaging to defraud, deceive or mislead” a subscriber.

Monetary penalties for violations (up to $1,000 per call, or up to $3,000 if the called party is 60 or older) remain unchanged. However, the bill deletes a separate provision that previously authorized the Office of the Attorney General to revoke a telemarketer’s registration or right to conduct telemarketing in Pennsylvania based on multiple violations of the statute.  

The changes to Pennsylvania’s law will become effective on October 18, 2026. In the interim, businesses that place outbound calls to recipients in Pennsylvania should examine current practices and consult with counsel about whether any changes will be needed to ensure compliance with Pennsylvania’s amended law.

 The rule raises several questions that are likely to be debated extensively in the public comment period that runs through December 9, 2026, including those related to FDA’s legal authority to require GRAS notifications, the agency’s capacity to administer and oversee the program, and the practical impact on industry.   As part of the announcement of the GRAS Rule, HHS also announced that it has submitted for final review, along with the USDA, a long-awaited proposed definition of ultra-processed foods (UPFs) and, presumably, related requirements and restrictions on UPFs. 

What the Proposed Rule Would Do

At its core, the proposed rule would require any person introducing a substance into interstate commerce based on a GRAS conclusion under Section 201(s) of the FD&C Act to notify FDA of that conclusion. Companies that choose not to do so would not be prohibited from marketing the substance, but they could face increased post-market scrutiny. Key aspects of the proposal include:

• Companies would no longer be able to rely solely on self-affirmed GRAS determinations without any disclosure to FDA. In this regard, the longstanding practice of independently concluding that a substance is GRAS and marketing it without notifying the agency would effectively come to an end.
• Importantly, however, the proposal would not convert GRAS determinations into a premarket approval system. Companies could continue to market substances without any FDA review or approval. However, failure to submit a required notification would become a factor in FDA’s risk-based prioritization for post-market review and enforcement of food and pet food products.
• Not every substance would require a new GRAS notice. The proposal exempts, among other things, substances that have already received an FDA “no questions” letter, are affirmatively listed in FDA regulations as GRAS, are covered by an effective Food Contact Notification, or have been reviewed through certain existing FDA programs, such as biotechnology consultations.
• Recognizing that many substances have been marketed for years based on independent GRAS conclusions, the proposal provides a one-year transition period during which companies may submit abbreviated information rather than a full GRAS notice. FDA estimates that more than 1,000 substances currently on the market may fall into this category.
• The proposal would extend and modify the Threshold of Regulation (TOR) process, historically limited to food contact substances, to a broader range of food substances that meet updated safety criteria. FDA would also revise exposure calculations to better account for differences among subpopulations.
• To accommodate the anticipated increase in submissions, FDA proposes extending its review period from 180 days to as much as 360 days, including up to two 90-day extensions. 

The Catalyst and the Proposed Rule’s Expanded Scope 

• The political momentum for the proposed rule stems both from the Make America Healthy Again or “MAHA” movement and a series of high-profile safety concerns involving substances that entered the food supply without FDA review. In the preamble, FDA points to several examples of recalls, import alerts, or warning letters involving certain ingredients, including tara flour, which was associated with hundreds of adverse event reports and hospitalizations in 2022; Delta-8 THC products, which raised neurodevelopmental and cardiopulmonary concerns; caffeinated alcoholic beverages that prompted FDA warning letters; ashwagandha, which FDA placed on import alert after concluding it was an unsafe food additive; and stevia leaf crude extracts, which remained on the market for decades despite longstanding FDA concerns.
• These examples helped fuel calls for greater transparency, culminating in Secretary Kennedy’s March 2025 directive to explore rulemaking and the Administration’s broader “Make America Healthy Again” initiative. Although much of the public discussion has focused on food ingredients that consumers intentionally ingest, FDA framed the proposal more broadly. The rule would apply not only to ingredients added directly to food, but also to substances that enter food indirectly through packaging, processing equipment, containers, and other food-contact applications.

If finalized, companies would have 18 months from the rule’s effective date to comply with what would be one of the most significant changes to the GRAS framework in decades.  Mandatory GRAS reporting would create additional compliance burdens for industry stakeholders, despite FDA’s apparent intention to preserve the industry’s ability to make independent GRAS conclusions.

Questions Worth Asking 

Does FDA Have the Legal Authority?

FDA states that it is issuing the proposed rule “consistent with our authority in sections 201, 402, 409, and 701 of the FD&C Act,” arguing that mandatory notifications help the agency fulfill its post-market review authority under § 409(a) and (d) to determine whether substances constitute unapproved food additive uses. 

But this argument has potential vulnerabilities. Congress in 1958 specifically exempted GRAS substances from premarket approval requirements. The GRAS provision was designed to allow the food supply to function without FDA having to pre-clear every safe substance. Does a mandatory notification requirement conflict with that Congressional intent? The rule carefully insists it is “not a premarket review program,” but the practical effect of heightened enforcement priority for non-notifiers blurs that line. Whether FDA can impose a notification requirement without congressional action remains an open question and is likely to be a central issue in any legal challenge to the rule.

Can FDA Actually Handle the Volume?

FDA acknowledges that the rule will significantly increase submissions. As of January 2011, an estimated 1,000+ substances were on the market under independent GRAS conclusions, and the streamlined submission window alone could produce 155 filings in a single year (by FDA’s own estimate). Add ongoing mandatory notices for new substances, and the pipeline could grow substantially.

The two additional 90-day extension periods (potentially stretching review to 360 days) are a tacit acknowledgment that resources may not keep pace. If FDA cannot timely evaluate notices, the practical effect may be a growing backlog of filed-but-unreviewed GRAS notices—technically satisfying the “notification requirement” while providing little actual safety oversight. This raises the question of whether mandatory notification without corresponding review capacity actually achieves the stated safety goals, or merely creates an administrative burden for industry without corresponding benefits to the public.

What Companies Should Do Now

Companies that rely on self-GRAS determinations should consider the requirements of the Rule and consider submitting comments on particular requirements or issues with particular relevance.  Additionally, in evaluating potential compliance burdens of the rule, companies should:

• Identify products containing substances that rely on self-GRAS conclusions.
• Evaluate the strength and completeness of existing GRAS documentation and request any documentation from suppliers where applicable. 
• Identify any gaps between the initial self-GRAS conclusion and current uses.
• Determine which affected products were introduced into interstate commerce before the effective date of any final rule and assess potential eligibility for the proposed streamlined notification pathway. 

• Evaluate how the proposed rule will impact business operations and consider whether alternative regulatory pathways or reformulation strategies could reduce future compliance burdens.

The proposed rule raises hard questions about statutory authority and administrative capacity. Comments are due December 9, 2026, and stakeholders in both the ingredient and food contact spaces should be paying close attention.

FDA’s Highly Anticipated UPF Definition Remains Under Wraps

Separately, FDA Acting Commissioner Kyle Diamantas announced that a white paper outlining the agency’s proposed definition of ultra-processed foods (UPFs) is currently under White House review.  Additional details are expected in the near future.  We will continue to follow this issue. 

As we discussed in our recent post on puffery, whether a claim is puffery often depends on context. This case provides a good example.

When the “World’s Highest Quality” claim appeared on packages and point-of-sale displays without references to specific product attributes or competitors, NAD concluded that consumers were unlikely to interpret the claim as “conveying an objective message that Howies’ products are superior to competing products.” In that context, the claim was puffery.

But when the same claim appeared near references to measurable product attributes, including strong adhesive, high tensile strength, ease of tearing, durability, and consistency, NAD reached a different conclusion. In those contexts, NAD found that the claim “becomes an objective representation regarding the performance or other tangible attributes of a product that is sufficiently specific and material enough that substantiation is required.”

Puffery often works best when you leave it alone. Once you start taping specific, measurable claims to it, those claims may stick. Advertisers should consider how claims appear in context because what starts as a boast can quickly become something that requires substantiation.

Originating Providers as Gatekeepers. The State AGs emphasize that the most effective way to stop illegal robocalls is to prevent them from entering the network in the first place. They echo the FCC’s statement from the KYC Further Notice that some originating providers “do not do enough” to vet their customers, and that this lack of diligence not only enables illegal robocalls but also hampers law enforcement’s ability to trace bad actors. 

KYC “Model Standards.” Throughout their comments, the State AGs refer to the public-facing KYC protocols for one particular company which they call “model standards,” and suggest that the FCC use them as “a reasonable starting place for this discussion.” As described in the comments, these protocols include robust customer identification measures, lists of behaviors and categories of businesses that would warrant a higher standard of KYC review, and an emphasis on approaching KYC as a continuing obligation through post-activation monitoring and audits.  

KYC Requirements Should Go Beyond the Proposed Rule. While the KYC Further Notice proposed that originating providers obtain at minimum a customer’s name, physical address, government-issued ID number, and alternate phone number, the State AGs argue this baseline is insufficient. They recommend that providers also obtain and verify information related to business formation and ownership, taxpayer identification numbers, articles of incorporation, good standing certificates, lists of DBAs and trade names, verified email domains, and the identity of business owners (including indirect owners holding a 10% or greater stake). The State AGs further suggest that providers be required to examine a customer’s business practices, consent procedures, sample call scripts, and any prior enforcement actions or provider terminations. 

Ongoing Monitoring and Re-Verification. The State AGs endorse the concept of KYC as an ongoing inquiry rather than a one-time checklist. They support required annual re-verification at minimum, with more frequent re-verification triggered by “red flags” or “changes in traffic patterns.”  

No Exemption for Smaller Providers. The KYC Further Notice asked whether enhanced requirements would unduly burden smaller providers. While acknowledging the potential burden, the State AGs say no exemption should apply, noting that illegal traffic “has often been facilitated by smaller providers,” citing multiple state enforcement actions as examples. They also suggest that any exemption for smaller providers would make them “more attractive to bad actors seeking a less rigorous entry ramp for illegal traffic.” 

High-Risk Customers and Red Flags. The State AGs support a universal baseline KYC standard applicable to all customers regardless of size or volume, with enhanced monitoring and more frequent re-verification for high-risk customers. They cite numerous red flags and high-risk indicators identified in the KYC Further Notice and industry KYC “model standards” that they say would “appear in any basic KYC screening” and would warrant heightened scrutiny, including: use of registered agents or virtual offices as physical addresses, residential addresses for corporate registration, no commercial web presence, suspicious or newly created email domains, non-registration in the state claimed, payment via cryptocurrency or other non-traceable means, vague or incomplete information, and aggressive or hostile behavior. 

Implementation, Recordkeeping, and Enforcement. The State AGs support applying enhanced KYC to both new and renewing customers. They support downstream blocking requirements—i.e., requiring downstream providers to block traffic from an originating provider found non-compliant with KYC rules—as well as the proposed per-call forfeiture structure to correlate penalties with the volume and harm of illegal calls. On recordkeeping, the AGs support the FCC’s proposal to require “originating providers to ‘retain KYC information and supporting records for the entirety of any potential statute of limitation period relating to misuse of their services to make illegal calls.’” 

MVNOs and SIM-Based Fraud. Separately, the State AGs note that the Multistate Anti-Robocall Litigation Task Force has been engaging with industry to learn more about the role of Mobile Virtual Network Operators (MVNOs) in the mobile ecosystem and “about the proliferation of SIM-based fraud” (such as bulk SIM purchases and activations). They support further FCC inquiry into KYC practices for prepaid and postpaid mobile service sold through third-party retailers. They acknowledge, though, that this is a distinct issue from the current rulemaking’s focus on business customers of originating voice providers, to be addressed at another time.

***

The State AGs’ unified comments underscore the depth of bipartisan state-level focus on rooting out illegal robocall traffic from voice service networks. Companies that originate voice traffic, as well as their customers and downstream partners, should evaluate their KYC and due diligence practices now to identify potential improvements that could ward off unwanted attention from State AGs and other regulators. We expect the KYC rulemaking, as well as the ongoing work of the Multistate Anti-Robocall Litigation Task Force, to be among the topics discussed at the Robocall Summit organized by the National Association of Attorneys General that will take place later in August. Kelley Drye will also be holding a webinar on September 23 with representatives from several State AGs’ offices to discuss robocall issues and enforcement priorities. Additional details about the webinar and a link to register will be made available here. 

In Tempest v. Safeway, the plaintiffs accuse Safeway of creating illusions about prices that induce some shoppers to make purchases they otherwise would not have. Wine again serves as a central catalyst, this time in a dispute over whether price advertisements misled consumers about the duration of discounts.

The plaintiffs allege that Safeway advertised discounted “Member Prices” for wines that were available “thru” a specified date. According to the complaint, consumers understand those dates to mean that the discounts would disappear after the specified date. The problem, plaintiffs say, is that the discounts didn’t really end in any meaningful way. Instead, Safeway allegedly renewed or replaced the promotions, allowing Rewards members to continue receiving substantially similar discounted prices month after month. 

Safeway argued that no reasonable consumer would be misled because the tags never expressly promised what would happen after the “thru” date. The court wasn’t persuaded. At the pleading stage, the court held that a reasonable consumer could plausibly interpret a sale advertised as lasting “thru” a particular date to mean that the sale would not continue beyond that date. Whether consumers were actually deceived remains a question for later stages of the case.

What makes the decision interesting is that the plaintiffs’ theory doesn’t focus primarily on the reference price itself. Many pricing cases challenge whether a higher “regular” or “compare at” price is genuine. Here, by contrast, the court focused on the allegedly temporary nature of the promotion. Put differently, the case is less about whether the discount was real and more about whether the expiration date was real.

We’re just watching the first few scenes of this play, and it’s too early to tell how it will turn out. For now, remember that plaintiffs across the country are focused on how retailers advertise discounts, and many lawsuits accuse retailers of creating an illusion that shoppers are getting a bargain. As for Gonzalo, Shakespeare’s clear-eyed counselor, remember what Antonio said in The Tempest, Act 2, Scene 1, Line 186.

A plaintiff purchased a dress from Abercrombie & Fitch’s website and paid a bundled $7 shipping and handling fee because her order did not qualify for free shipping. She argued that the retailer violated the Honest Pricing Law by not including the bundled fee in the price at the outset. Instead, the bundled fee was only displayed at checkout.

Abercrombie & Fitch argued that it didn’t violate the law because the fee was optional—consumers were presented with an option to pick up items in store without paying any fee. (Interestingly, the retailer didn’t argue that the fee fell under the law’s exception.) The District Court for the Northern District of California agreed that the fee wasn’t mandatory.

Since the statute doesn't define the term “mandatory,” the court looked to dictionary definitions and legislative history. The opinion noted that lawmakers repeatedly described the law as targeting “unavoidable” or “required” charges that consumers cannot reasonably avoid. Optional add-ons, by contrast, were not the focus of the legislation. 

The plaintiff alleged a separate “bait-and-switch” claim under California Civil Code § 1770(a)(9). That claim didn’t fare any better. Because the “bait-and-switch” argument was based on the same theory that Abercrombie & Fitch should have included the shipping charge in the advertised price, the court dismissed it as well.

Because the dismissal was without prejudice, giving the plaintiff an opportunity to amend, the case may not be over yet. Nevertheless, it gives an indication of how courts may differentiate fees that are mandatory from those that are optional.

In the latest episode of Privacy Perspectives, Alex Schneider is joined by Aaron Burstein and Céline Guillou to discuss the growing patchwork of state registration laws, California’s DROP deletion mechanism, and the questions businesses should be asking regarding when they are subject to data broker registration obligations. 

The conversation begins with New Jersey’s recently enacted data broker law, which moved from introduction to enactment in only two days. The law includes annual registration fees that could reach $1.5 million for some businesses, as well as a ban on the sale of sensitive data that took effect immediately. The law also bans all sales of New Jersey residents' sensitive data; this ban applies to all controllers, not just data brokers, and went into effect immediately on June 30. 

Although data broker registration is not expected to begin until spring 2027, and the law could be amended before then, companies have already begun to assess whether their activities fall within the law’s scope. 

That analysis may not be straightforward. Data broker status often depends on specific data flows rather than a company’s overall relationship with consumers. A retailer, for example, may collect information directly from its customers while also obtaining additional information from a third-party source. If the retailer later sells or licenses that enriched data, it may be engaging in activity covered by a data broker registration laws despite having a direct relationship with the consumer.

The group also discusses how these requirements may apply to advertising technology. Definitions of “sale,” “sharing,” and “direct relationship” vary across states, and regulators have not always provided clear guidance on how those terms apply to particular technologies.

California’s Delete Request and Opt-out Platform, known as DROP, adds another operational challenge. The system allows California residents to submit one deletion request that is transmitted to registered data brokers. Compliance requires businesses to identify relevant records, process requests, communicate deletions, and address data held by service providers and other recipients. Companies that do not have a detailed understanding of their data flows may find those requirements difficult to implement.

The episode also examines New Jersey’s new “data collector” category, which could require certain businesses that obtain information directly from consumers and provide it to data brokers to register with the state. This approach could bring retailers and other first-party businesses into the fold even when data brokerage is not their primary business.

The discussion concludes with practical guidance for companies assessing these laws. Businesses should review their data sources and destinations, evaluate registration requirements consistently across jurisdictions, and avoid assuming that a first-party customer relationship places every data flow outside the definition of data brokerage.

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Although several FDA-approved GLP-1 therapies are peptide-based, many popular peptides are neither FDA-approved nor included on FDA’s list of bulk drug substances that can be used in compounding (the “503A Bulks List”).  As a result, these peptides cannot be lawfully compounded under Section 503A of the Federal Food, Drug, and Cosmetic Act (FD&C Act).

Against this background, the FDA’s Pharmacy Compounding Advisory Committee (PCAC) met last week to evaluate whether seven highly sought after peptides should be recommended for inclusion on the 503A Bulks List. The uses evaluated varied significantly and include obesity, wound healing, and insomnia. The Committee recommended adding six out of seven of the peptides under review for inclusion on the 503A Bulks List, with votes as follows:

Importantly, a favorable PCAC recommendation does not immediately authorize compounding. Before any peptide is added to the 503A Bulks List, FDA must initiate a formal notice-and-comment rulemaking—a process that may take over a year to complete. And while these outcomes could significantly affect compounding pharmacies, wellness providers, manufacturers, telehealth platforms, and investors operating in the peptide space, companies who consider this development a green light to compound or market the above (and other) peptide substances face enforcement risk until FDA formally places them on the 503A Bulks list.

Further—and notwithstanding the Committee’s votes—FDA staff recommended against adding any of the peptides under review to the 503A Bulks List, repeatedly citing:

• Insufficient evidence of safety and effectiveness; 
• Insufficient or nonexistent human clinical trial data; 
• Inadequate characterization and quality information; 
• Uncertainty regarding substance identity and composition; and 
• Potential safety concerns, including immunogenicity risks.

Given that FDA staff remain skeptical of the available evidence underlying many of these peptides, and the agency is under no obligation to follow the Committee’s recommendations, it is unclear whether these substances will end up on the 503A Bulks List. For now, companies operating in the peptide space should continue to approach peptide compounding and marketing with caution, as enforcement risk persists until the evaluated substances are formally added to the 503A Bulks List. 

*Ben Winck, a Summer Associate at Kelley Drye & Warren LLP, contributed to this post.

New Jersey “Junk Fees” Enforcement Statement

New Jersey Attorney General Jennifer Davenport joined forces in June with the state’s governor in an announcement “cracking down” on junk fees. While Governor Mikie Sherrill signed an executive order for agencies to recommend junk fee legislation, AG Davenport drafted an “Enforcement Statement” and provided new educational materials on her office’s interpretation of current law. The Statement “explains how some widespread practices surrounding junk fees may violate” New Jersey’s UDAP law, the Consumer Fraud Act (CFA). The office describes “junk fees” as hidden, surprise, or excessively overpriced fees providing little to no benefit to the consumer. According to the statement, these practices harm consumers by making it difficult to compare prices and causing them to pay higher prices because businesses exclude fees from the advertised price, hide them in fine print or deceptive designs, misrepresent the nature of the fee, and charge “completely worthless” fees. The guidance does not provide additional context on how to differentiate between “worthwhile” and “worthless” fees.

The AG further cites arbitration provisions in contracts as an additional hurdle to private litigation necessitating AG involvement.  The AG explains that certain practices have already been illegal under the CFA, and the CFA is adaptable to combat new forms of fee practices, including:

• “Drip pricing” which they define as, “luring the consumer in with a low advertised price . . . and then tacking on fees later” 
• “Dark patterns” with examples including hiding pricing information in “dense fine print,” terms, pop-ups, “manipulated font sizing,” text placement, and “complex clickthroughs.” 
• Misrepresentations regarding the purpose, recipient, value, and optional nature of the fee, including a failure to disclose the existence or qualities of a fee that would be material to a purchase decision. The office highlights “focusing a buyer on a monthly payment amount without disclosing…an optional fee” if it would be material to the buyer as a potential violation of the CFA. 
• Unbundling prices where the consumer would reasonably believe the unbundled goods or services would be included or itemization is not required by law.
• Excessively high fees applying unconscionability factors under the CFA. For example, the AG says it may be unconscionable to take a significant price markup on a fee that provides little or no value to the customer.
• “Manipulated consent” such as using prechecked boxes, violating the federal E-Sign Act’s electronic consent requirements, or high-pressure sales. In this regard, the AG cited its recent Mariner Finance lawsuit as an example where company representatives allegedly quickly scrolled through contract terms on a screen in a way that made it hard for consumers to read and comprehend the terms. 

Many states likely interpret their UDAP laws in a similar manner to New Jersey even in the absence of specific guidance. 

Massachusetts and California AG Announcements on Industry-Specific Focuses

Also in June, both the Massachusetts and California AG offices made announcements on industry-specific enforcement efforts related to fee disclosure practices. Specifically, Massachusetts Attorney General Andrea Joy Campbell advised car dealerships that state motor vehicle regulations require document preparation fees and any other necessary dealership charges to be included in the total advertised price, and explained that such disclosure may require an additional Total Price label adjacent to the US “Monroney label.” The advisory further noted a failure to comply with the specific motor vehicle regulations may also violate the more general Massachusetts Unfair and Deceptive Fees regulation, which requires generally the inclusion of all mandatory fees in advertised prices. The AG advised dealers that “it is not enough …to separately list the existence or amount of a doc fee elsewhere in an advertisement, even if it is prominently disclosed.”

Separately, California Attorney General Rob Bonta announced a cross-sectional “Affordability Response Team” within his DOJ. The team is intended to “work to investigate and go after practices that are unlawfully raising costs . . .to tackle affordability from all angles” including “corporations, landlords, scammers, or policies that are driving up prices.” He described the team as addressing a complex issue that “requires creative thinking.” The specified “focus areas” of the team (with prior enforcement efforts highlighted in each category) include:

• Grocery, Gas, and Utility Costs 
• Housing and Insurance Costs
• Healthcare Costs
• Childcare, Education, and Retirement
• “The High Cost of Enjoying Life” (described as “hiking up prices for entertainment, tech, and trips”)
• Financial Protection
• Labor and Wages 
• Scams

***

AGs continue to demonstrate interest in fee transparency by bringing enforcement and issuing statements and guidance interpreting their UDAP or fee laws and increasing resources devoted to pricing or fees. However, even without issuing specific statements, AGs may be taking actions behind the scenes that mirror these interpretations. Combined with the increase in legislative activity discussed in our last installment, we expect this area to continue to be a hot topic for enforcer attention. 

The law was scheduled to become enforceable on October 4, 2026, but that has changed. On July 14, 2026, the US District Court for the Southern District of California issued a preliminary injunction in California League of Food Producers v. Bonta, preventing California Attorney General Rob Bonta and those acting in concert with him from enforcing the law while the litigation proceeds.

The lawsuit centers on two constitutional arguments. First, the plaintiffs contend that portions of the law are so unclear that companies can’t reasonably determine what the law requires, raising concerns under the Fourteenth Amendment’s Due Process Clause. Second, they argue that the law restricts truthful commercial speech in violation of the First Amendment by limiting the ability to communicate recyclability information to consumers. The court concluded that the plaintiffs were likely to succeed on both theories, which was enough to justify preliminary relief. 

The court also found problems with the law’s restrictions on recyclability claims. While California argued that the law would reduce consumer confusion and improve recycling outcomes, the court was not persuaded that the record showed the law would materially advance those objectives. Instead, the court noted evidence suggesting that manufacturers might simply remove recyclability claims altogether to avoid enforcement risk, potentially resulting in consumers receiving less information rather than more. The court further concluded that less restrictive approaches may be available to achieve the state’s goals. 

Importantly, the decision does not strike down the law. The court found that the challenged provisions may be severable from the remainder of the statute, meaning portions of the law—particularly the “60/60” framework for collection and sorting we discussed—could survive further litigation. The case will continue, and California may seek appellate review or otherwise continue defending the law on the merits. For now, however, enforcement is on hold. 

The injunction may also have implications that extend beyond labeling compliance and into California’s broader extended producer responsibility scheme. SB 54, the Plastic Pollution Prevention and Packaging Producer Responsibility Act, leans on SB 343’s definition of “recyclable” to determine which packaging materials count as recyclable for purposes of source reduction targets, recycling rate calculations, and producer fee obligations under that program. If the litigation over SB 343 results in the recyclability criteria being narrowed, enjoined on a broader basis, or ultimately struck down as unconstitutionally vague or an impermissible restriction on speech, producers and CalRecycle may be left without a stable definition of “recyclable” to anchor SB 54 compliance. That uncertainty could complicate the development of SB 54’s implementing regulations and reporting obligations, and it would not be surprising to see CalRecycle or affected producers raise similar due process or First Amendment arguments in that context down the road.

Although companies no longer face the immediate prospect of Attorney General enforcement on October 4, 2026, it would be premature to assume that the “Truth in Recycling” law will be thrown in the trash. Instead, it’s likely that it will be recycled in another form. 

Later that month, we posted about a lawsuit against Polymarket, its CEO, and its CMO over that company’s influencer campaigns. Among other things, the complaint alleges that the influencers didn’t clearly disclose their connections to the company and that some of the experiences in their posts were fabricated. That lawsuit is still ongoing.

Last week, NAD announced that it had also launched an inquiry into Polymarket’s influencer practices in March. Because the lawsuit—which focuses on similar issues as the NAD inquiry—was filed while the inquiry was ongoing, Polymarket requested that NAD administratively close the proceeding. NAD agreed to do that.

We won’t see a decision from the NAD in this case, but the inquiry serves as a reminder that NAD is actively looking at influencer campaigns to determine, among other things, whether influencers are clearly disclosing the relationships they have to the companies they promote.  

Illinois Law on “Hidden and Misleading Fees”

In addition to newly enacted laws addressing ticket reselling practices and “buy now pay later” offers, Illinois in June passed HB 228, which will become effective in January 2027. In signing the legislation, Governor JB Pritzker praised it as “put[ting] an end to deceptive junk fees” by making “it unlawful for any business to advertise, display, or offer a price for products or services that does not include all mandatory fees or surcharges before taxes.” 

Like many other fee laws, Illinois prohibits offering a price that does not include all mandatory fees. “Mandatory fees” are defined to include fees that must be paid in order to complete the purchase when such fees are not reasonably avoidable. Illinois’ definition includes a somewhat unique wrinkle also found in Minnesota’s law that further provides that a mandatory fee is one “a person would reasonably expect to be included in the purchase of the goods or services being advertised.” As with other federal and state fee laws, the total price need not include taxes or fees imposed by the government required by law to be collected from the consumer. 

Where total cost is determined by consumer selections or preferences, or total cost is related to distance or time, disclosure is compliant if the business clearly and conspicuously discloses: (1) the factors determining the total price, (2) any mandatory fees, and (3) that total cost may vary. This could be interpreted to suggest that shipping must be included in the total price if it is not variable by distance or time, unlike most other fee disclosure laws, although it remains to be seen whether the Illinois AG will take this position. 

The law provides separate specific compliance requirements for food delivery platforms, “food or beverage service establishments,” and auctions. The law is broadly applicable to all “persons,” but has a long list of other specific carveouts primarily in already regulated industries. 

New York City Proposed Rule

New York City’s Department of Consumer and Worker Protection (DCWP) announced along with its passing of the final “Click to Cancel” Rule the initiation of a Proposed Rule addressing “junk fees.” Comments to the Rule are due on or before August 7, 2026, when DCWP will hold a public hearing on the proposal. The DCWP explains in the Proposed Rule’s Statement of Basis and Purpose that consumers are surprised by a total price higher than expected through “bait and switch” tactics, including in industries such as third-party delivery, rentals, hotels, and live event tickets. This Rule is described as “industry neutral” and builds on the existing Rule in place specifically for hotels. The DCWP points to analogous existing fee laws in CA, MA, and MN as adopting similar approaches. 

Proposed requirements include: 

• The total price, including all mandatory fees, must be disclosed in a clear and conspicuous manner in all offers at least as prominently as any other pricing information. 
• “Mandatory fees” is defined as fees that are not reasonably avoidable and a reasonable person would expect to be included, excluding taxes and fees imposed by the government and actual shipping charges incurred. This mirrors the definition adopted by Illinois discussed above.
• Periodic charges must include the total price for the relevant time period and the total amount of non-recurring fees (such as one-time or sign-up fees). 
• The offeror must also clearly and conspicuously disclose the nature, purpose and amount of any fees not included in the advertised total price, and the final amount of payment at least as prominent as the total price.These disclosures must occur before the consumer consents to the transaction. 
• The offeror cannot misrepresent the nature, purpose, amount or refundability of any fees or charges or the identity of the good or service where the fee is being charged in any offer or disclosure. 
• The offeror must maintain records sufficient to establish the nature, purpose, amount, and refundability aspects of the fee – and the absence of such record is a presumption that the alleged fact is true. 

Notably, the law would establish new requirements for businesses operating exclusively in New York City as New York State does not yet have a specific fee law, although the New York AG could arguably use its UDAP authority to address similar issues.

DC Housing Amendment 

DC enacted a Fair Housing Practices Amendment on July 2, with an effective date forthcoming after the legislative review period. The law amends the prior Act to require certain notifications and a dispute process for assessment and collection of unpaid amounts after vacating a property, prohibit charging a fee for services required by the implied warranty of habitability, and prohibit a separate charge for common utility charges. The common utilities provision is effective January 2027.

***

Stay tuned for part two in our fee transparency roundup, which will cover recent developments in New Jersey, Massachusetts, and California. 

Beiersdorf, makers of competing sunscreen products, didn’t think that claim smelled right. It filed a challenge before the NAD arguing that the claim required substantiation. Beiersdorf argued that there are ASTM standards for measuring smell and hedonic scales for preference that are used for claim support. Vacation countered that the claim was puffery and didn’t require substantiation.

NAD acknowledged that smell can be measured. “But the fact that a test methodology exists to measure smell does not necessarily mean that consumers would expect a claim of ‘World’s Best-Smelling Sunscreen’ to be substantiated.” Thus, the key question in the eyes of the NAD is whether consumers would expect Vacation to have substantiation based on the context of the claim.

In most contexts in which the claim appeared—such as the product labels, retail displays, and social media posts—NAD determined that consumers would not expect substantiation. “Given the inherent subjective nature of the claim and the grossly exaggerated characterization of the product’s smell, NAD found that reasonable consumers are unlikely to take the claim, when presented by itself, seriously.”

The analysis was different on Vacation’s website, though. There, the claim appeared in quotation marks directly above a star rating, a 4.8/5.0 score, and more than 13,000 reviews. That changed the context. NAD wrote that a quote that appears above ratings may suggest that the quote is taken from the reviews or is a summary of the reviews.

“By tying the claim to the reviews in this manner, consumers may take away the message that the claim is more than puffery and relies on the reviews as substantiation for a claim of preference.” NAD therefore recommended that Vacation modify the claim in this context to avoid conveying the message that the “World’s Best-Smelling Sunscreen” is substantiated by the reviews.

Many marketers will rejoice when reading about this decision. They will likely tell their in-house legal teams that the world’s best-written legal blog has a post suggesting they can say that they are the world’s best at something without having to prove it. That’s half true, but the other half is the more important part.

It’s important to remember that the difference between a claim that is puffery and one that requires substantiation can sometimes be as subtle as a hint of coconut on the breeze on a summer afternoon.

On July 14, 2026, the Seventh Circuit affirmed and held that Section 227(c)(5) does not permit plaintiffs to sue for unwanted text messages. The Seventh Circuit reasoned that text messages would not constitute ​“calls” under the ordinary meaning of the word because text messaging did not exist when the TCPA was enacted in 1991. The Seventh Circuit acknowledged that Section 227(c)(5) likely covered more than just telephone calls as they existed in 1991 but declined to express too much ​“liberality” in interpreting terms.

The Seventh Circuit also relied on the context of provisions surrounding Section 227(c)(5), noting that use of the term ​“telephone solicitations” in other parts of the statute indicated that Congress intended a different meaning for ​“calls.” The court rejected Plaintiff’s attempt to rely on the FCC’s interpretation of the statute, finding it is no longer bound by the FCC’s guidance post-McLaughlin. The Seventh Circuit also rejected Plaintiff’s policy arguments, finding that the TCPA’s remedial nature was insufficient to overcome the plain language of the statute. It also found that cases interpreting text messages under different provisions of the TCPA and case law from other circuits were similarly unpersuasive.

Accordingly, the Seventh Circuit affirmed the district court’s ruling that text messages are not ​“calls” under 47 U.S.C. § 227(c). We will continue to monitor these developments, as this issue appears ripe for the Supreme Court to review.

Seth Steidinger, et al. v. Blackstone Medical Services, No. 25-2398 (7th Cir. July 14, 2026). 

New York City

Earlier this year, we covered the New York City Department of Consumer and Worker Protection’s (“DCWP”) proposed rule governing the cancellation of automatic renewal and continuous service subscriptions. That proposal has now been finalized and will take effect on October 1, 2026.

Followers of this blog and the FTC will recognize familiar names in Mayor Mamdani’s press release on the rule, with current DCWP Commissioner and former FTC BCP Director Sam Levine and former FTC Chair Lina Khan touting the final NYC “Click to Cancel” Rule and a newly proposed “Junk Fees” Rule. Notably, NYC already proposed and finalized a rule prohibiting a “hotel junk fees” rule earlier this year that prohibits advertising a price for a hotel without clearly and conspicuously disclosing the total price of the stay, including all mandatory fees. (Stay tuned for our coverage of the newly proposed, more broadly applicable NYC fees rule announced last week.)

Here’s a summary of the NYC “Click to Cancel” Rule:

• Scope and Definitions, Disclosure, Consent, and Notice: With a few exceptions, the rule applies broadly to most businesses that offer an “automatic renewal”—a plan in which a paid subscription or purchasing agreement is automatically renewed at the end of a definite term—or a “continuous service”—a plan that continues until the consumer cancels. Before requesting consent or billing information, businesses must present all material terms, including specific disclosures related to the nature of the product, frequency of charges, and cancellation deadline, “clearly and conspicuously” and in “visual proximity” (or “temporal proximity” for voice offers) to the consent request. Reminders are required for certain longer-term subscriptions, material changes, and free trials longer than one month at specified time intervals. These provisions mirror the New York state law. 
• Cancellation Mechanism Requirements: Like the state law, businesses must provide consumers a “simple cancellation mechanism” that is “as easy to use as” and “through all mediums by which the business allows a consumer to provide affirmative consent.” The rule also prohibits imposing “unreasonable or unlawful conditions” on cancellation. In a slight variation, if consent was obtained in person, the business must additionally offer an online cancellation option, where practical (whereas the state law allows for telephone cancellation).
• Enforcement and Remedies: What gives this rule extra teeth is that it provides the City with additional remedies, so it can go on its own to pursue violations of what was essentially a state law. It provides for restitution: a business found in violation is liable for the amount charged after the consumer’s first attempt at cancellation. Civil penalties follow an escalating schedule: $525 for a first violation or default, $1,050 for a second, and $3,500 for a third and subsequent violation. These amounts can accumulate quickly for businesses with large subscriber bases, especially as a violation of this Rule could come under separate enforcement by both the City and the State.

Louisiana

Louisiana passed its own “Click to Cancel Act,” which will take effect on January 1, 2027. As with other automatic renewal laws, the Act requires clear and conspicuous disclosure of terms in visual proximity to the request for acceptance of the offer before the purchasing agreement is fulfilled . Affirmative consent is required “to an agreement that clearly and conspicuously displays the automatic renewal terms.” The law requires an acknowledgment containing the terms. A notice of material changes is required, as is a renewal notice for annual or longer contracts or any trial period conversion, at least three days prior to the renewal/conversion.

Here are some other notable provisions:

• The Act prohibits businesses from presenting consumers with information that contradicts or undermines the ability to provide express affirmative acceptance to the automatic renewal offer. 
• The Act requires businesses to maintain “reasonable business records” demonstrating that a consumer provided consent for at least one year from the formation of the contract.
• Despite being called “Click to Cancel,” the Act does not specifically require online cancellation. It permits “a cost-effective, timely, and easy-to-use mechanism” for cancellation that is not “unreasonably burdensome or designed to deter cancellation.” The mechanism can include online, email, phone, “or another commonly used communication method.”
• The Act broadly exempts any businesses with less than 50 employees or annual gross revenue of less than $5 million (though other provisions in the statute conflict on this point).

Violations will be subject to penalty of up to $500 per violation. However, prior to initiating any enforcement action, the Louisiana Attorney General must provide a  business written notice of the alleged violation. If a business cures the violation within 30 days and provides written confirmation of that cure, the AG may not impose a penalty for that violation.

Getting Ready for Compliance

With October 1, 2026 approaching, businesses with subscribers or recurring-charge customers in New York City should assess their practices in light of the new rule. Prior to the new year, companies doing business in Louisiana should also update their renewal notice regimes and business record practices. Both new enforcement mechanisms share a lot in common with the growing patchwork of state laws, but there are various nuances within that patchwork that businesses need to pay attention to. We expect to see a lot of continued enforcement on automatic renewal issues at the federal, state, and now, local levels.

• Marketing misled consumers that the app had safety and security similar to banks, when the app did not have consistent fraud detection practices.
• Ads misrepresented FDIC insurance coverage of balances. 
• The app did not provide inbound phone support, despite being aware that this “created opportunities for fraud” through fake phone numbers. 
• A promotion encouraging users to post their username publicly generated account takeover fraud. 
• Responses to fraud were inadequate and inconsistent with the statements made on the website regarding support and protections. 
• Despite promises of quick cash access, frequent account freezes with limited customer support left consumers without the means to pay for necessities.

This is not the first time states have alleged that payment transfer services violated UDAP laws through their marketing of safety or security, or permitting fraud on the platform. For example, last year AG James sued the parent company of Zelle on a similar theory, and Texas previously settled with PayPal regarding the Venmo app’s practices.   

The Agreed Final Judgment requires Block to:

• Comply with the federal EFTA Regulation E, including by conducting investigations of notices of error and providing any provisional credits required by the regulation, without requiring the customer to take certain additional steps such as filing a police report. 
• Create a governance process for compliance including a committee reporting to the board.
• Prohibit misrepresentations regarding customer service, fraud protections, and banking (including where applicable making specific disclosures that the app is not a bank). 
• Provide education to consumers about common fraud on the platform, and create procedures designed to reduce fraud.
• Implement procedures to respond to account takeovers and establish procedures pertaining to account suspensions and deactivations.
• Appropriately staff customer service to resolve customer complaints, including live 24-hour support with “human” support available during specified hours. 
• Comply with the CFPB’s prior 2025 settlement pertaining to Block’s conduct in providing customer redress, and make a $45 million payment to the states.  

Key takeaways for all companies: 

• Make sure your customer support practices and staffing aligns with marketing promises.
• If you become aware of customer complaints regarding an issue, don’t ignore them. This could become a basis for a “failure to disclose” allegation for a known issue. 
• Don’t assume that once a federal enforcement agency acts, state AGs will back down. They may take the action into account but continue with their own independent authority and avenues for relief. 
• This settlement serves as another example that despite political differences, states are still working together on key consumer protection initiatives.

Mammoth compared the price of a Harry’s Original 8-count refill ($17) and a Harry’s Plus 8-count refill ($25) to a Gillette Fusion5 ProGlide 8-count refill ($39). Mammoth told consumers that Gillette was “straight up taking advantage of you” for “a couple pieces of metal and some plastic” and urged them to “stop getting ripped off by your razor company.”

Gillette took issue with the prices Mammoth quoted, noting that consumers could receive a one-time discount from Gillette other retailers. NAD noted that “price comparisons should reflect prices that are charged on a regular basis and for a reasonably substantial period of time.” Isolated sales prices shouldn’t be used. Accordingly, NAD found that Mammoth’s numbers were appropriate.

Gillette also objected to the suggestion that it was taking advantage of customers and ripping them off. Although NAD has often taken a strong position on disparaging claims, here NAD noted that “disparagement alone does not warrant discontinuance of a claim that is not false or misleading.” Although the language in the ads was “somewhat hyperbolic,” NAD didn’t seem to be too bothered by it. 

This decision provides helpful guidance to advertisers looking to make price comparisons. It’s important to ensure you focus on the regular prices at which products—both yours and your competitor’s—are sold for a reasonably substantial period of time. And while aggressive language can draw scrutiny, truthful claims supported by fair comparisons won’t automatically be shut down just because they’re sharp.