New York City Mandates 'Click to Cancel' and Bans Hidden Fees for Businesses

New York City is set to implement new rules targeting so-called "subscription traps" and hidden "junk fees," requiring businesses to provide a straightforward cancellation process and transparent pricing. The new policies, which city officials described as the first of their kind for a U.S. municipality, will take effect on October 1.

New Consumer Protection Rules

The policy introduces two primary measures aimed at increasing transparency for consumers. The first is a "Click to Cancel" rule that applies to all automatic renewal and continuous service subscriptions.

Under this rule, businesses must:

• Clearly and conspicuously disclose all subscription terms before the consumer agrees.
• Provide a simple and transparent online cancellation method for consumers who signed up online.

The second measure targets "junk fees" by requiring businesses to advertise the full, total price of goods and services upfront, inclusive of all mandatory charges and fees.

Financial Impact and Enforcement

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According to a statement from the offices of New York City Mayor Zohran Mamdani and Department of Consumer and Worker Protection Commissioner Samuel Levine, hidden fees cost the average family of four an estimated $3,200 each year, based on consumer reports.

Businesses found in violation of the new rules will face significant penalties. These include providing restitution to affected consumers and paying civil penalties that begin at $525 per violation, city officials said.

Policy Context

This municipal-level action follows a previous attempt at the national level. A similar "Click to Cancel" rule proposed by the Biden administration was struck down by a federal appeals court last year before it could be implemented.

Mayor Mamdani, who took office in January, had campaigned on a platform focused on making New York City more affordable for its residents. The new rules are presented as a key step in fulfilling that promise by cracking down on deceptive business practices.