New York City Enacts ‘Click-to-Cancel’ Rule to Ban Subscription Traps and Junk Fees

Mayor Zohran Mamdani announced the regulation on Tuesday, which will apply to all businesses operating within the five boroughs. Under the rule, companies must offer a simple online cancellation method if they allow sign-ups online, and must not impose hidden fees or require customers to jump through hoops to end a service.

The measure specifically targets 'subscription traps,' where consumers are lured into recurring charges with confusing opt-out processes, and 'junk fees,' which are unexpected charges added at checkout. Businesses found in violation will face fines starting at $500 per offense, with repeat offenders subject to escalating penalties.

The rule was developed after a year-long review by the city's Department of Consumer and Worker Protection, which collected complaints from residents about gym memberships, streaming services, and meal-kit deliveries. The department will begin enforcement on the effective date, and businesses are expected to update their websites and billing systems to comply.

Consumer advocacy groups have praised the move as a model for other cities, while some business associations have raised concerns about the cost of compliance. The city estimates the rule could save residents up to $100 million annually in unwanted charges.

Mamdani said the rule is part of a broader push to protect New Yorkers from financial exploitation, and he encouraged residents to report violations through the city's 311 hotline.