No More Hidden Fees: D.C. Takes Aim at Drip Pricing and Strengthens Consumer Protection Act

The Enhancing Consumer Protection Procedures Amendment Act of 2026 (B26-0174) is an enrolled act that fundamentally shifts the consumer protection enforcement landscape in Washington, D.C. For companies transacting with D.C. consumers through e-commerce, hospitality, financial services, telecommunications or subscription models, this legislation creates significant compliance obligations and litigation exposure.

The act bans "drip pricing" – artificially low advertised prices to which fees, surcharges or taxes are added at checkout – along with hidden fees. It also incorporates Federal Trade Commission (FTC) and Consumer Financial Protection Bureau (CFPB) "abusiveness" standards with a pro-consumer interpretive mandate, establishes aiding-and-abetting liability for vendors and service providers, imposes mandatory minimum penalties and enhances private rights of action with treble damages, fee-shifting and broad representational standing.

B26-0174 passed unanimously (13-0) and awaits mayoral action and a 60-day congressional review. The drip-pricing ban, FTC/CFPB alignment provision and attorney general enforcement enhancements (including mandatory minimum civil penalties and costs/fees recovery) take effect upon enactment. The private right of action, private-action remedies (including treble damages) and certain administrative enforcement provisions (specifically the provisions in Section 4(c), (d), (e), (g), and (h)) are subject to the act's applicability provision. However, the act was fully funded through the Council's fiscal year (FY) 2027 budget, which passed through first vote on June 9, 2026, with a second budget vote scheduled on June 23, 2026, before final approval and certification.¹

D.C. is poised to become one of the most aggressive consumer-protection jurisdictions in the country, with enforcement tools rivaling or exceeding federal law. This alert highlights the key provisions of the act and explains why companies should begin compliance assessments.

Redefinition and Expansion of Prohibited Trade Practices

The Drip-Pricing and Hidden-Fee Ban

New Section 28-3904(a)(12) makes it an unfair, deceptive or abusive trade practice to advertise, display or offer a price for a good or service "that does not include all mandatory fees or charges" other than 1) government-imposed taxes and 2) actual shipping costs for physical goods. This is a per se prohibition requiring no showing of consumer confusion or actual harm. Any mandatory surcharge, convenience fee, service fee or resort fee that is not a government tax or actual shipping cost must be incorporated into the headline price. The exceptions are narrow, and businesses relying on fee disaggregation face immediate compliance exposure.

FTC and CFPB Interpretive Alignment

Revised Section 28-3901(d) instructs courts to give "due consideration and weight" to 1) FTC and federal-court interpretations of "unfair or deceptive act or practice" under FTC Act Section 5(a), 2) FTC guidance, including the Green Guides, and 3) CFPB interpretations of "abusive act or practice" under Dodd-Frank Section 1031(d). The act's preamble states that FTC precedents should be "interpreted in a manner most favorable to consumers," creating a pro-consumer framework that integrates federal unfairness and abusiveness doctrine (including the CFPB's broader "abusiveness" standard) into D.C. law. Even if federal enforcement contracts, D.C. courts remain bound by this directive.

Codification of the "Abusiveness" Standard

New Section 28-3904(a)(29) prohibits "materially interfer[ing] with the ability of a consumer to review or understand a term or condition" of a consumer contract, agreement or transaction. Section 28-3904(a)(30) prohibits "tak[ing] unreasonable advantage of" a consumer's 1) lack of understanding of material risks, costs or conditions, 2) inability to protect their interests in selecting or using a consumer financial product or service, or 3) reasonable reliance on a merchant acting in their interest. These provisions track Dodd-Frank's abusiveness standard and extend it to all consumer goods and services. For subscription services, financial technology, insurance and telecommunications providers, this creates new liability for complex or opaque terms.

Aiding-and-Abetting Liability

The act extends liability to any person who "aid[s] and knowingly or recklessly abet[s]" an unfair, deceptive, abusive or unlawful trade practice, regardless of whether the manner of aiding is itself a trade practice. This could reach technology vendors building drip-pricing checkout flows, payment processors facilitating overcharges, marketing agencies designing deceptive advertising and pricing consultants that advise on fee structures. The "recklessly" threshold is significantly lower than the typical federal "knowingly" standard, broadening potential liability.

Penalties and Remedies

The act fundamentally restructures penalty authority. For Office of Attorney General (OAG) enforcement, penalties shift from discretionary to mandatory, with floors of $500 (first offense) and $1,000 (subsequent or aggravated); these OAG penalty enhancements take effect upon enactment. Courts may issue asset freezes, place entities in receivership or order dissolution – no bond is required for injunctive relief.² For private plaintiffs, Section 28-3905(m)(2)(A) provides treble damages or $3,000 per violation (whichever is greater), plus attorneys' fees, punitive damages and injunctions; these private-action remedies are subject to Section 6's applicability provision, but the Council's FY 2027 budget, approved on first vote on June 9, funds the act, pending final budget approval and certification. Private damages adjust annually using the greater of 3 percent or D.C.-area Consumer Price Index (CPI). Each noncompliant transaction constitutes a separate violation, so companies with high D.C. volumes face aggregate exposure scaling into millions without proof of actual harm. The Department of Licensing and Consumer Protection (DLCP)-imposed fines adjust by CPI only beginning on January 1, 2027.³ Violations are Class 1 infractions under 16 DCMR § 3200.1(a) – the district's most severe civil infraction category.

Class Action and Private Litigation Implications

Expanded Standing for Representative Suits

The act establishes a multilayered private enforcement scheme. These provisions are subject to Section 6's applicability provision, but the Council's FY 2027 budget, approved on first vote on June 9, funds the act, pending final budget approval and certification. Individuals may sue for personal relief or on behalf of themselves and the general public. Nonprofits may sue on behalf of themselves, their members or the general public. Public interest organizations may sue on behalf of consumers, subject to a "sufficient nexus" requirement. This framework creates functional class-action exposure without Rule 23 procedural requirements, dramatically lowering barriers to aggregate litigation.

The OAG Stay Mechanism

When the AG commences enforcement under Section 28-3909, any civil action (including claims by a public interest organization or on behalf of the general public) is automatically stayed until resolution, provided the claims are "based in whole or in part on any matter complained of" in the OAG's case. Plaintiffs bringing representative claims must notify the OAG within 10 business days. The stay does not apply to individual consumer claims, creating two-front exposure: The OAG may proceed while individual consumers simultaneously pursue treble-damage claims.

Fee-Shifting and Litigation Incentives

Prevailing consumers recover reasonable attorneys' fees and costs. Punitive damages atop treble damages create powerful litigation incentives. Conversely, if a court finds a consumer's action "groundless and brought in bad faith or for harassment," it shall award fees to the defendant. This asymmetric fee-shifting (mandatory for prevailing plaintiffs, discretionary for defendants only in bad-faith cases) strongly favors consumers and will attract plaintiffs' bar attention to D.C.-nexus claims.

Preponderance Standard and No-Harm Requirement

New Section 28-3901(f) codifies the preponderance standard for all actions. Combined with the provision that violations occur "whether or not any consumer is in fact misled, deceived, or damaged," this creates near-strict liability for per se violations like the drip-pricing ban. Plaintiffs need to prove only that conduct occurred.

Key Takeaways

Companies transacting with D.C. consumers should treat this as a high-priority compliance event. The drip-pricing ban demands immediate audit of all consumer-facing pricing to ensure advertised amounts include every mandatory fee other than government taxes and actual shipping. The aiding-and-abetting provision requires vendors and service providers to evaluate whether their products facilitate deceptive pricing. The CFPB-aligned abusiveness standard creates new risk for business models relying on consumer confusion or information asymmetry. Per-violation damages with broad representational standing make D.C. an attractive forum for aggregate litigation; companies should model exposure based on D.C. transaction volumes. The OAG's enhanced investigatory tools (including interrogatories demanding sworn answers) mean enforcement investigations will be quicker and harder to resist.⁴

For more information or questions on this matter, please contact the authors.

Notes

¹ DLCP may summarily suspend licenses for failure to comply with cease-and-desist orders and close businesses presenting imminent danger, both without prior hearing. Affected businesses can appeal the decision to the Office of Administrative Hearings after the closure takes effect. These provisions, along with the complaint procedures and private right of action under Section 28-3905, are listed in Section 6's applicability provision. The Council's FY 2027 budget, approved on first vote on June 9, funds the bill. A second budget vote will take place on June 23, and final budget approval and certification remain pending.

² The OAG's request for costs and fees is presumptively reasonable unless the defendant did not spend substantially less. The OAG may recover pre-suit investigation costs pertinent to the enforcement action.

³ Section 28-3904(a)(28) makes it actionable to retaliate against any person filing a consumer complaint or participating in an investigation. Tolling: Filing a DLCP complaint tolls the limitations period until resolution. Burden: Preponderance standard applies unless otherwise specified.

⁴ The bill authorizes the OAG to issue interrogatories requiring sworn answers, subpoena witnesses and documents, and petition Superior Court for compliance orders, with fines calibrated to the respondent's income. Service may be by any method reasonably calculated to give actual notice. Sworn statements are not admissible in criminal proceedings against the witness but may support perjury prosecutions.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.