New York City to Enforce 'Click to Cancel' Rule, Ban Hidden Fees

New York City will require businesses to offer a simple “Click to Cancel” option for subscriptions and to disclose all mandatory fees upfront, according to a statement from city officials. The new policy, which aims to eliminate so-called subscription traps and junk fees, is set to take effect on October 1.

New Consumer Protection Rules

The policy introduces two primary rules for businesses operating in the city. Officials described the initiative as the first of its kind for a municipal government in the United States.

• The "Click to Cancel" rule applies to all automatic renewal and continuous service subscriptions. It mandates that companies clearly disclose their subscription terms and provide a transparent, straightforward cancellation process.
• The "junk fees" rule requires businesses to advertise the full price of goods and services, including all mandatory charges and fees, from the outset. This is intended to prevent consumers from being surprised by hidden costs at the point of sale.

Financial Impact and Enforcement

City officials, citing consumer reports, stated that hidden fees cost an average family of four an estimated $3,200 each year. The new regulations are designed to curb this financial burden on consumers.

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Businesses found in violation of the new rules will face significant penalties. According to the announcement, penalties will begin at $525 per violation and will include restitution for affected consumers.

National and Local Context

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

The policy aligns with the campaign promises of New York City Mayor Zohran Mamdani, who took office in January with a platform focused on making the city more affordable. The new rules were announced jointly by the offices of the Mayor and the Department of Consumer and Worker Protection Commissioner, Samuel Levine.