Hidden Fees Class Actions Surge as Retailers Face New Legal Risks Over Drip Pricing

by Matthew P. Suzor and Laura Twizere

On February 26, 2026, a class action lawsuit was filed in the United States District Court for the Southern District of New York against Premium Brands Opco LLC (“Premium Brands”), the parent company for retail brands Ann Taylor and Loft, alleging that the retailer failed to clearly disclose a mandatory processing or handling fee in the advertised price or early stage of the transaction.  According to the allegations, Premium Brands’ websites, anntaylor.com and loft.com, display artificially low prices that exclude required processing and handling fees, which are not revealed until the final confirmation page, after customers have already signed in, input shipping and payment information.  Plaintiffs argue that this practice of “drip pricing” is intended to mislead consumers in order to increase corporate profits.

The complaint asserts claims under California’s Consumer Legal Remedies Act (“CLRA”), also known as Honest Pricing Act, and the Virginia’s Mandatory Fee and Surcharge Disclosure Law (“MFSD”).  The CLRA, amended in July 2024, requires that advertised prices include all mandatory fees, other than government-imposed taxes and shipping costs.  Similarly, the MFSD, which took effect in July 2025, prohibits retailers from advertising prices that exclude compulsory fees.  Based on these statutes, the lawsuit seeks to represent a class of consumers in California and Virginia who paid the challenged fees on Ann Taylor and/or Loft websites.  The class covers all such purchases made during the two years before the action was filed, with two subclasses focused on transactions occurring on or after the effective dates of the respective state laws.

What is Drip Pricing?

Drip pricing, also referred to as bait-and-switch, is a practice in which, in an effort to lure customers in, companies only advertise part of a price upfront and mandatory charges are revealed later in the checkout process.  This is a common tactic across online commerce, from travel to clothing.  Drip pricing can harm consumers by leading to unexpected total costs and complicating consumers’ ability to compare prices across sellers.

Regulatory Crackdown on Hidden Fees

In recent years, hidden fees have drawn increased scrutiny from state and federal regulators across various sectors.  As discussed above, both California and Virginia have enacted state laws targeting hidden fees.  Similarly, last year, Massachusetts Attorney General Andrea Campbell announced a final rule regulating hidden fees.  Key provisions include requiring ads and offers to disclose the total price more prominently than any other pricing information, mandating a total price disclosure prior to requiring consumers to provide any personal information, and requiring clear disclosure of the nature, purpose, and amount of any charges imposed on a transaction.

At the federal level, the Federal Trade Commission (“FTC”) released a rule on unfair or deceptive fees (the “Rule”) in May 2025.  The Rule prohibits bait-and-switch pricing and other tactics used to hide total prices and mislead consumers about fees in the live-event ticketing and short-term lodging industries.  The FTC has since signaled its intent to expand its scope on the matter.  Last month, it issued an Advance Notice of Proposed Rulemaking (“ANPRM”) targeting fee practices in the rental housing market.  These efforts comes after a series of wins against major housing companies: Invitation Homes in 2024 agreed to pay $47.2 million to settle FTC allegations that it concealed mandatory monthly fees from advertised rent prices and Greystar Real Estate Partners in 2025 agreed to pay $24 million and reform its fee disclosure practices following allegations it misrepresented the true cost of renting.

Examples of Recent Drip Pricing Cases

Hidden fees have become a major focus of consumer protection litigation.  Drip pricing, in particular, has been subject to many class action lawsuits across various sectors.

• In January 2026, a hidden fees class action lawsuit in federal court in California was filed against San Francisco Baseball Associates LLC, which owns and operates Major League Baseball’s San Francisco Giants (“Giants”). The plaintiff, Juan Flores, alleged that the Giants have been systematically deceiving fans by falsely advertising ticket prices for their baseball games that excluded convenience, handling and order processing fees, which could increase the total cost by more than $50 per transaction.  The complaint claims that these practices are illegal based on the CLRA.  Although the Giants stopped charging these fees when the CLRA took effect on July 1, 2024, Flores argues that fans were never refunded the millions of dollars they were previously charged.
• In March 2026, another hidden fees class action lawsuit was filed against U-Haul in federal court in New York, alleging violations of state and federal consumer protection laws. The plaintiff, Melanie Griffiths, claims U-Haul lures customers in with the promise of a low advertised rental rate, only to add a mandatory “environmental fee” at the final stage of the transaction.  According to the complaint, the environmental fee does not reflect any separable service and artificially inflates the advertised price.  A materially similar lawsuit was filed against U-Haul in California in November 2025.

Why are Class Actions Useful?

Class actions play a critical role in cases involving consumer welfare.  As the Supreme Court has recognized, one of the primary purposes of class actions is to promote the “efficiency and economy of litigation.”  When numerous individuals have suffered similar injury at the hands of the same alleged misconduct, aggregating the claims saves time and expenses and helps avoid inconsistent judgment that may come with litigating large numbers of identical individual lawsuits.

While individually the injury might be too small to compensate for the large cost of litigation, class actions serve as an important mechanism for compensating harmed consumers and enforcing legal rights that might otherwise go unaddressed.

Considering heightened regulatory enforcement and increasing class action exposure, businesses should carefully evaluate their fee structures.  Recommended best practices include:

• Clearly disclosing all mandatory fees upfront and early in the transaction process.
• Ensuring all fees are appropriate, justified, and comply with applicable state and federal laws.

The attorneys of Miller Shah LLP have decades of experience representing consumers, employees, investors, and businesses in complex class action litigation across the country.  Consumers who believe they were charged hidden or misleading fees may contact Miller Shah LLP to learn more about their legal options.