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

New York City will implement a new consumer protection policy to ban businesses from using 'subscription traps' and require them to provide a simple, online cancellation method. City officials said Friday that the new rules, which also target hidden 'junk' fees, are set to take effect on October 1.

New Consumer Protection Rules

The policy, described by the offices of Mayor Zohran Mamdani and Department of Consumer and Worker Protection (DCWP) Commissioner Samuel Levine as the first of its kind for a U.S. city, introduces two main requirements for businesses operating in New York City:

• 'Click to Cancel' Rule: Businesses offering automatic renewal or continuous service subscriptions must clearly disclose their terms and provide a cancellation process that is straightforward and transparent.
• 'Junk' Fees Rule: Companies must advertise the full price of goods and services upfront, which includes all mandatory charges and fees. There can be no hidden costs added later in the transaction.

City officials stated that these measures are designed to increase transparency and make it easier for consumers to manage their recurring payments.

Financial Impact and Enforcement

Ad

According to a statement from city officials citing consumer reports, hidden fees cost the average family of four an estimated $3,200 each year. The new policy aims to curb this financial burden on consumers.

Businesses found in violation of the new rules will face significant penalties. The city will require non-compliant firms to provide restitution to affected consumers and will impose civil penalties starting at $525 per violation.

National Context

New York City's initiative follows a similar effort at the federal level that was ultimately unsuccessful. A national 'Click to Cancel' rule proposed by the Biden administration was struck down by a federal appeals court last year before it could be implemented.

The new municipal policy aligns with Mayor Mamdani's campaign promises to improve affordability in the city. The mayor, a democratic socialist, took office in January.