Fixed term installment contracts: early termination fees.

Assembly Member Irwin's consumer protection measure establishes new requirements for early termination fees in fixed-term installment contracts, requiring sellers to clearly disclose fee calculations and capping charges at 20% of the total contract cost. The provisions apply to contracts entered into or modified after July 1, 2026.

Under the new requirements, sellers must provide consumers with either the exact early termination fee amount or the formula used to calculate it, including a sample showing the maximum possible charge. This information must be readily visible in the initial contract without requiring additional clicks or interactions. The bill defines fixed-term installment contracts as agreements where consumers make scheduled payments over a set period until the full price is paid for goods or services, including digital products.

The measure creates exemptions for broadband internet providers who comply with federal consumer disclosure requirements and for contracts already subject to stricter state or federal consumer protections regarding early termination fees. While the bill regulates termination charges, it preserves sellers' ability to require the return of goods when consumers end contracts early.