The New York City Department of Consumer and Worker Protection (DCWP)'s 'click to cancel' rule took effect Oct. 1. Auto-renewal and recurring-billing services must clearly disclose their terms and make cancellation simple. Violators must provide refunds and face civil penalties of $525 or more per violation. The city is also separately pursuing a rule requiring all-in pricing to curb 'junk fees.'
New York City's rule on canceling subscription services, the so-called 'click-to-cancel' rule, has been in effect since Oct. 1. Created by the city's Department of Consumer and Worker Protection (DCWP), the rule requires businesses that sell auto-renewing or recurring-billing products to clearly disclose enrollment terms and to let customers cancel through a simple process. The aim is to stop so-called 'subscription traps,' which make signing up easy and canceling hard.
Businesses that violate the rule must provide restitution to affected consumers and pay a civil penalty of at least $525 per violation. The DCWP holds enforcement authority. The city estimates that the rule will save consumers between $21.5 million and $162.5 million a year, based on an analysis by the Roosevelt Institute.
On July 8, the city also separately published a proposed rule on 'junk fees.' It would require advertisements and notices to first show the total price, including all mandatory fees, and to state truthfully what items such as 'service fee,' 'processing fee' and 'destination fee' are and whether they are refundable. The rule is not yet final, and a public comment period and hearing are planned. Once in effect, violations will carry fines of $350 or more per violation.
Because the rule is already in effect, consumers can report problems to the DCWP if canceling a service that bills automatically every month, such as a gym, streaming or software subscription, is overly complicated or if the terms were not properly disclosed at sign-up. Details on the rule and how to file a complaint are available on the city's websites at nyc.gov/click-to-cancel and nyc.gov/DCWP.