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 provide clear written disclosure of fee amounts and capping charges at 30 percent of the total contract value.

The legislation creates disclosure standards for contracts entered into or modified after August 1, 2026. Sellers must specify either the exact early termination fee or provide the calculation formula and maximum possible charge in plain view, without requiring consumers to access additional links or tooltips. The 30 percent fee limit applies to most contracts, though home improvement agreements may charge up to the total cost of installed or custom-ordered materials and services at termination.

The measure includes targeted provisions for specific sectors and scenarios. Broadband internet providers that comply with federal consumer labeling requirements receive automatic compliance status for their services. The bill preserves consumers' ability to pay off contracts early and permits sellers to require the return of goods upon early termination. Contracts already subject to stricter state or federal consumer protections remain governed by those existing regulations.