New York City is moving aggressively into consumer protection territory that federal regulators have largely vacated, finalizing a Click-to-Cancel rule and proposing a citywide ban on hidden junk fees. Both actions come from the Department of Consumer and Worker Protection, the same agency that licenses and regulates debt collectors operating in the five boroughs.
The moves implement a pair of executive orders signed by Mayor Zohran Mamdani in January directing DCWP to crack down on subscription traps and hidden fees. Commissioner Samuel Levine, who previously led the Federal Trade Commission’s Bureau of Consumer Protection, announced the rules last week, and former FTC Chair Lina Khan publicly endorsed them.
Why it matters: New York City is positioning itself as a lead enforcer on consumer financial issues at a time when federal agencies are pulling back, and DCWP is the regulator that ARM companies doing business in the city answer to. The commissioner made clear the agency intends to pair its rules with restitution for consumers and civil penalties for violators.
The details: The Click-to-Cancel rule takes effect October 1, making New York the first municipality in the country to adopt one. It requires businesses offering automatic renewals or continuous service subscriptions to disclose material terms up front, obtain affirmative consent, and provide a cancellation mechanism as easy to use as the sign-up process, through the same medium. Businesses cannot hang up on consumers trying to cancel, obscure cancellation instructions, or misrepresent the consequences of canceling. Fines start at $525 per violation and climb to $3,500 for third and subsequent violations, and violators owe restitution for any charges made after a consumer’s first cancellation attempt.
Notably for this industry, the rule exempts banks, bank holding companies and their subsidiaries and affiliates, credit unions, other state or federally licensed financial institutions, and any entity regulated by the New York Department of Financial Services.
The proposed junk fee rule, published July 8, would require all-in pricing, meaning businesses must advertise the total price of a good or service including all mandatory fees. Companies charging “service” or “processing” fees would have to document what those fees actually cover. Fines would start at $350 per violation. A public comment period and hearing will follow.
The Roosevelt Institute estimates the Click-to-Cancel rule alone will save New Yorkers between $21.5 million and $162.5 million per year.
Read Executive Order 9. Read Executive Order 10
