New York City Mayor Zohran Mamdani Seeks To Eliminate 'Junk Fees' And 'Subscription Traps'

As part of his campaign for election, New York City Mayor Zohran Mamdani vowed to make New York City more affordable. To that end and as part of his affordability initiative, he has issued Executive Orders 9 and 10 intended to crack down on "junk fees" and "subscription tricks and traps."

City officials said that by signing the "junk fees" Executive Order 9, Mamdani was signaling that his administration will crack down on "companies who mislead New Yorkers into paying more for services, saving New Yorkers money amidst our cost-of-living crisis."

Specifically, Executive Order 9:

1. · Establishes a city-wide "junk fee" task force chaired by Deputy Mayor Julie Su and newly appointed Department of Consumer and Worker Protection Commissioner Sam Levine. The task force will focus on advancing the city's work in fighting "junk fees."
2. · Directs the Department of Consumer and Worker Protection to take action it deems necessary to crack down on hidden or deceptive fees.
3. · Directs the consumer and worker protection office to monitor compliance, investigate potential violations and enforce new rules designed to address such fees.

On subscriptions, city officials said, "Businesses use a range of deceptive practices to trap customers in unwanted subscriptions, including so-called 'free trials' that automatically convert into paid plans with critical disclosures buried in fine print or behind hyperlinks; [and] adding monthly fees or add-on charges after payment information has already been collected."

The subscriptions Executive Order 10:

1. · Calls for coordination among agencies, including the city's Law Department and others, such as the New York Attorney General's Office to "ensure maximum impact in combatting subscription traps."
2. · Directs the Department of Consumer and Worker Protection to make recommendations to the City Council on ways to fight "subscription tricks and traps."
3. · Empowers the city to use the full tools and authorities to crack down on "subscription tricks and traps."
4. · Directs the consumer and worker protection agency to monitor, investigate and enforce violations related to "subscription tricks and traps."

In a related development, Mamdani has appointed Sam Levine as New York City Comissioner of the Department of Consumer and Worker Protection. Levine was formerly the Director of the FTC's Bureau of Consumer Protection during the Biden Administration.

Levine previously served as an attorney-advisor to then-FTC Commissioner Rohit Chopra and as a staff attorney in the FTC Midwest Regional Office. He currently is a Lecturer at Columbia Law School and a Senior Fellow at the Berkeley Center for Consumer Law and Economic Justice.

While Levine was at the FTC, it adopted final rules pertaining to "junk fees" and "subscription plans." The "junk fee "rule which classified certain live event ticketing and short-term lodging fees as unfair and deceptive, was never challenged in court, and it is a final rule. The subscription rule, also known as the "click-to-cancel" rule was successfully challenged in court and the FTC has not proposed another subscription rule.

The Eighth Circuit Court of Appeals nullified the "click to cancel" rule, saying that the commission had not prepared a preliminary regulatory analysis for the rule.

The rule would have required that companies make it easier for a consumer to cancel a subscription.

Consumer groups have petitioned the FTC to reopen rulemaking on the "click to cancel" subscription proposal and the commission is seeking comments on that issue.

Because Levine was involved in both FTC rules, those rules may shed light on what areas the Department may focus on as it develops rules and/or investigates companies pertaining to junk fees and subscription plans.

In 2023, the CFPB issued a circular affirming that companies offering "negative option" subscription services must comply with federal consumer financial protection law.

Negative option programs are subscription services that are automatically renewed unless the consumer takes action to cancel and include trial subscription programs that charge a reduced fee for an initial period and then automatically begin charging a higher fee.

This circular was withdrawn in May 2025 as part of the CFPB's rollback of guidance documents issued under the CFPB's prior director, Rohit Chopra.

The CFPB also proposed a rule intended to prohibit NSF fees on transactions that are declined in real time—a type of "junk fee." However, the bureau withdrew that proposal.

The appointment of Sam Levine as the commissioner of the department and Mayor Mamdani's imminent crackdown on junk fees and subscription plans underscore the advice we have been providing to our clients about the need to maintain their compliance programs in full force and effect despite the situation with the CFPB. State and city agencies across the country have been doing everything they can to fill the void. We expect that the department under Levine's leadership will aggressively investigate and bring enforcement lawsuits against companies that it perceives to be charging junk fees or using deceptive subscription practices.

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