Attorney General Bonta’s Sponsored Bill to Compensate Victims of Consumer Protection Violations Signed Into Law

OAKLAND — California Attorney General Rob Bonta issued a statement in response to Assembly Bill 1366 (AB 1366), a bill that he sponsored, being signed into law by Governor Gavin Newsom. Authored by Assemblymember Brian Maienschein (D-San Diego), the legislation will establish a new Victims of Consumer Fraud Restitution Fund in the state Treasury that will be funded through payments made by businesses that violate consumer protection laws. The Fund will be used to help make victims whole in consumer protection lawsuits brought by the Attorney General. AB 1366 takes effect on January 1, 2024.

“With the signing of AB 1366, California is putting consumers first,” said Attorney General Rob Bonta. “When a predatory business collapses or becomes insolvent after we have successfully prosecuted, it can be hard or impossible for consumers to get restitution. AB 1366 is a game changer — it will allow my office to compensate those victims using proceeds that predatory businesses receive from their misconduct. I’m grateful to Assemblymember Maienschein for spearheading AB 1366.”

“When a predatory business takes advantage of a consumer, it’s only right that the proceeds gained from illegal conduct should go towards compensating victims rather than remaining in the bank accounts of bad actors,” said Assemblymember Brian Maienschein. “AB 1366 ensures that victims can and will receive restitution for the wrongdoings they endure by crooked businesses on the brink of collapse.” 

In order to ensure that there is a source of funding to help make whole victims in actions brought by the Attorney General who otherwise might go uncompensated because of the inability of the defendant to pay restitution, AB 1366 would establish a new Victims of Consumer Fraud Restitution Fund in the state Treasury. This new Restitution Fund will be funded from the ill-gotten gains of businesses that violate California’s consumer protection laws, rather than through taxes or fees charged to law-abiding businesses. Specifically, AB 1366 will authorize the court to award disgorgement in actions brought by the Attorney General under the Unfair Competition Law and False Advertising Law. Disgorgement will require companies that have violated the law to give up the money they made through their illegal conduct.

The text of the legislation can be found here.