New York City to Mandate 'Click to Cancel' for Subscriptions and Ban Hidden Fees

New York City will implement new consumer protection rules targeting so-called "subscription traps" and hidden "junk" fees, officials announced Friday. The policy, described as the first of its kind for a U.S. municipal government, is slated to take effect on October 1.

New Consumer Protection Rules

The new regulations, detailed in a statement from the offices of Mayor Zohran Mamdani and Department of Consumer and Worker Protection Commissioner Samuel Levine, introduce two key requirements for businesses operating in the city:

• 'Click to Cancel' Rule: This applies to automatic renewal and continuous service subscriptions. Businesses must clearly disclose all subscription terms and provide a simple, transparent cancellation process for consumers.
• Junk Fee Ban: This rule mandates that businesses advertise the total price of goods and services upfront, including all mandatory charges and fees, eliminating hidden costs.

Financial Impact and Enforcement

City officials, citing consumer reports, stated that hidden fees cost an average family of four an estimated $3,200 annually. The new policy aims to curb these costs and provide greater financial transparency for consumers.

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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, according to the city's statement.

Context and Background

The move by New York City follows a failed attempt at the federal level to enact similar legislation. A national "Click to Cancel" rule introduced by the Biden administration was struck down by a federal appeals court last year before it could go into effect.

The policy aligns with a campaign promise from Mayor Mamdani to make New York City more affordable. The city's initiative represents a significant local-level effort to regulate business practices that have faced growing scrutiny from consumer advocates and regulators nationwide.