On April 9, Mayor Zohran Mamdani and New York City Department of Consumer and Worker Protection (DCWP) Commissioner Samuel A.A. Levine announced a proposed rule that would make New York City the first municipality in the nation to enact local “click to cancel” requirements targeting subscription services and automatic renewals.
While the proposed rule’s full text and detailed requirements are still being developed through the public comment process, this development signals NYC’s intent to fill the gap left by the vacatur of the Federal Trade Commission’s (FTC) Click-to-Cancel rule and follows in the footsteps of the more stringent California Automatic Renewal Law (CARL).
Background: NYC’s Consumer Protection Initiative
The proposed rule follows Mamdani’s Executive Order 10, “Fighting Subscription Tricks and Traps,” issued on January 5, which directed the DCWP to combat deceptive subscription practices citywide.
Executive Order 10 directs the DCWP to prioritize monitoring, investigating, and taking enforcement action against subscription-related practices that deceive or mislead consumers, including enrolling consumers in subscriptions without proper consent, misrepresenting or failing to disclose pricing or renewal terms, and unfairly keeping consumers subscribed by making cancellation difficult.
Key Elements of the Proposed Rule
Although full regulatory details will emerge following the 30-day public comment period that began with the rule’s publication in the City Record on April 8, the DCWP’s announcement outlines several core elements:
Scope: The proposed rule would apply to any subscription that qualifies as an automatic renewal or continuous service offer, targeting “gyms, apps and other businesses citywide.”
Enforcement Authority: The DCWP would have citywide enforcement authority to ensure consumers can easily cancel subscriptions.
Penalties: Businesses that violate the rule would be liable for restitution to harmed consumers and civil penalties, with fines starting at $525 per violation.
Disclosure Requirements: The rule would require clear disclosures and affirm consumers’ rights when purchasing, enrolling in, or canceling subscriptions.
Cancellation Mechanisms: The rule specifically targets practices where “bad actors force consumers through confusing, time-consuming hurdles to cancel unwanted services—from ‘free trials’ that quietly convert into costly charges to cancellation processes buried in endless steps or unclear instructions.”
Context: Federal and State Click-to-Cancel Landscape
NYC’s proposed rule arrives at a critical juncture in the evolving regulatory landscape governing subscription-based services. As we discussed in a prior client alert, on July 8, 2025, the U.S. Court of Appeals for the Eighth Circuit vacated the FTC’s Click-to-Cancel rule in its entirety. The court held that the FTC failed to conduct a mandatory preliminary regulatory analysis after an administrative law judge determined the rule’s economic impact would exceed $100 million annually. While the FTC has initiated steps to revive the rule through a new Advance Notice of Proposed Rulemaking submitted in January, a new federal rule could take years to finalize.
In the absence of federal regulation, CARL, effective July 1, 2025, represents the most comprehensive state automatic renewal regulation in the nation. CARL requires businesses to obtain express affirmative consent to auto-renewal terms, provide same-medium cancellation options (including prominently displayed “click to cancel” buttons for online subscriptions), send annual reminders regardless of subscription length, and maintain consent records for at least three years or for one year after contract termination—whichever is longer. Notably, CARL permits retention or “save” offers during cancellation, provided the cancellation option remains prominent and immediately accessible.
With federal rules delayed and state laws varying in scope, NYC is now positioning itself as a municipal leader in consumer protection. Levine, a former director of the FTC’s Bureau of Consumer Protection during the Biden administration, has brought an aggressive, federal-level enforcement approach.
What This Means for Businesses
While the specific compliance requirements will become clearer after the public comment period and final rule adoption, companies offering subscription services to NYC consumers should begin preparing now.
Companies should review current subscription sign-up, renewal, cancellation, and reactivation flows for potential friction points; assess disclosure practices for clarity regarding pricing, renewal terms, and cancellation procedures; evaluate whether cancellation processes are as simple as enrollment processes; and document consent mechanisms and retention policies.
Looking ahead, as we have noted in a prior alert discussing the FTC Click-to-Cancel rule and CARL, the trend toward easier cancellation, clear consent, and transparent subscription billing continues regardless of the status of any single regulation. Businesses operating in multiple jurisdictions should consider adopting lowest-common-denominator compliance practices that satisfy the most stringent requirements across applicable federal, state, and now municipal laws.
Although a private right of action is not currently contemplated under the NYC rule (only the DCWP can bring enforcement actions), companies remain exposed to reputational harm and potential class actions under other consumer protection statutes for practices that frustrate consumers attempting to cancel subscriptions.
What To Watch
The public comment period runs for 30 days from April 8, closing on May 8, and includes a public hearing opportunity. After the comment period closes, the DCWP will review feedback before finalizing the rule.
We will continue monitoring this development and provide updates as additional details emerge.
For advice on subscription products and compliance with the evolving patchwork of federal, state, and local automatic renewal requirements, please reach out to the authors of this alert.
