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Following January’s Executive Order 10, which signaled that “subscription tricks and traps” would be a priority for his new administration, New York City Mayor Zohran Mamdani and Department of Consumer and Worker Protection (DCWP) Commissioner Samuel A.A. Levine announced a proposed rule to reinforce New Yorkers’ “Click to Cancel” rights. If adopted, it would be the first municipal rule of this nature.
In addition to giving DCWP citywide enforcement authority, the proposed rule would combat deceptive subscription practices by outlining required disclosures and rights when purchasing, enrolling in, and cancelling a recurring subscription. Consistent with New York State’s recently amended auto-renewal law, the rule would:
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Require clear and conspicuous disclosure of material terms—including a description of the product or service subject to renewal, the amount of the costs to be charged, the frequency of charges, the deadline (by date or frequency) to cancel, and the available cancellation mechanism(s)—before consent to the offer or billing information is requested. If the offer also includes a free gift or trial, or the price is temporary, the offer must include a clear and conspicuous explanation of how and when the price will change.
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Require a simple cancellation mechanism that is as easy to use, and provided through the same medium, as the one the consumer used to consent. Additionally, businesses must provide the option to cancel “at any time through all mediums by which the business allows a consumer to provide affirmative consent.”
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Prohibit the obstruction or unreasonable delay of cancellation requests or attempts, including by hanging up on consumers who call to cancel, providing false information about how to cancel, and misrepresenting the consequences or costs of cancellation.
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Require certain notices, including: (i) pre-renewal notices for offers with an initial term of one year or longer that renew for six months or longer, in a manner selected by the consumer (e.g., text, email, app notification), between 15 and 45 days before the cancellation deadline; (ii) notices of material change, between five and 30 days prior to the change; and (iii) where a free gift or trial of more than a month is offered, notice between three and 21 days before the cancellation deadline for the first chargeable period.
Businesses that violate the rule would be liable for restitution to harmed consumers (“the monetary amount charged … after the consumer’s first attempt at cancellation”) and civil penalties, with fines starting at $525 and increasing to $3,500 for repeat offenses.
New Yorkers have until May 8th to submit comments. DCWP will also hold a public hearing on that same date, at 11:00am Eastern, for those interested in participating in the rulemaking process (information here).
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