AB 483 establishes new consumer protections related to fixed term installment contracts for the sale of goods or services that are entered into or modified on or after August 1, 2026. Specifically, AB 483 prohibits sellers from charging a consumer a fee to terminate a fixed term installment contract, unless the contract includes a clear and conspicuous written disclosure of either: (1) the total cost of the early termination fee; or (2) the formula used to calculate the early termination fee, along with the maximum possible amount for the fee. This disclosure must be visible without additional consumer interaction, such as clicking through a hyperlink. Additionally, AB 483 caps any early termination fee at 30% of the total sum the consumer is obligated to pay under the fixed-term installment contract, excluding the fee itself.
AB 483 does not affect a consumer’s right to pay off the balance of a fixed term installment contract early or the seller’s right to require the return of goods upon early termination. AB 483 also does not apply to any of the following: (1) providers of broadband internet access service that comply with federal broadband consumer requirements; (2) home improvement contracts; or (3) fixed term installment contracts regulated by a state or federal law that provides greater protection to consumers.
(AB 483 adds Chapter 4, commencing with Section 17800, to Part 3 of Division 7 of the Business and Professions Code.)