New York City announced it will ban companies from using subscription traps and junk fees, ensuring customers can easily cancel automatic renewals and continuous service offers.
The “Click to Cancel” rule, first proposed by the Department of Consumer and Worker Protection on April 8, represents one of the strongest municipal consumer protection efforts in the country. It is set to go into effect on Oct. 1.
Because companies often impose time-consuming hurdles to cancel subscriptions, or offer free trials that eventually turn into recurring charges, the click-to-cancel rule requires transparency when customers purchase, enroll in or cancel services.
The Roosevelt Institute, the city notes, estimates that this initiative will save New Yorkers more than $160 million annually.
Customers can enforce this rule by calling 311 and filing a complaint through NYC’s consumer page.
Along with the “Click to Cancel” rule, the city is also proposing a “Junk Fees” rule, which would require businesses to advertise the total price of any good or service upfront, including all mandatory charges and fees.
Hidden fees often appear late in the purchasing process, after consumers have already decided to buy. Those practices apply to a wide range of industries, including third-party delivery apps, hotels and ticketing platforms.
On average, a family in the city loses $3,200 per year to junk fees and hidden costs, Mamdani said during his announcement.
“For years, companies have built their business model around making it harder for working people to hold onto their money,” Mamdani said. “Whether it’s hidden fees that suddenly appear at checkout or subscriptions that take one click to sign up for and a dozen steps to cancel, the result is the same: working people pay more while corporations profit. That ends now. If you can sign up with one click, you can cancel with one click.”
Businesses that violate the rules will a fine of $525 per violation.