AG Jennifer Davenport’s Enforcement Statement on Junk Fees doesn’t create new law. It does something more consequential for the industry: it maps exactly how New Jersey’s Consumer Fraud Act applies to every fee theory the CFPB spent several years building enforcement actions around.
Governor Sherrill signed Executive Order No. 19 on June 12, directing state agencies to identify junk fees and recommend measures to reduce them. The Enforcement Statement arrived the same day. Under the CFA, first violations carry civil penalties up to $10,000; subsequent violations reach $20,000 each, per violation.
Since Acting Director Russ Vought took control of the CFPB, the Bureau has curtailed both rulemaking and enforcement on fee practices. The FTC’s Junk Fees Rule, effective May 2025, covers only hotels, short-term lodging providers, and live-event ticket sellers. Consumer financial services: auto lenders, fintechs, installment lenders, mortgage servicers — all sit in an enforcement vacuum that New Jersey intends to fill.
I read the statement this week. The sleeper provision is unconscionability. Davenport’s office argued a fee can violate the CFA even if it’s fully disclosed, so long as regulators believe the price-to-value ratio is excessive. The statement cites pending litigation against a major lender where consumers paid for ancillary products that “rarely provided meaningful benefits,” and references studies on markups in auto add-on sales. That’s a price-control theory wrapped in consumer protection language. It goes considerably further than many state all-in pricing laws. If it survives challenge, it hands every state AG with a broad UDAP statute a fee-control template, not just a disclosure mandate.
Worth auditing your ancillary-product consent flows and add-on pricing before state agencies must deliver their junk-fee recommendations to Trenton.
Rebecca Lauren