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New York City Enforces 'Click to Cancel' Subscription Rule, a First in the US

Businesses must now make cancellation as easy as signing up; city expects significant consumer savings

By LineZotpaper
Published
Read Time2 min
New York City's 'click-to-cancel' rule took effect Thursday, making it the first municipality in the United States to require businesses to offer a cancellation process as straightforward as their sign-up process. The rule applies to subscriptions ranging from gym memberships to streaming services, and residents can now submit complaints to the city government if they encounter obstacles.

The rule, which the city's Department of Consumer and Worker Protection adopted, aims to eliminate so-called 'sketchy subscriptions' that trap consumers in recurring fees. Under the new regulation, any business that allows customers to sign up online must also offer an equally simple online cancellation method. For example, a gym that lets members join through a website cannot demand an in-person visit or a phone call to end the membership.

New York City resurrected the rule after a federal appeals court struck down a similar nationwide regulation from the Federal Trade Commission on procedural grounds. The city projects the policy will save New Yorkers between $21.5 million and $162.5 million annually in unwanted subscription costs.

As of Thursday, the rule is in effect, and the city government is now accepting complaints from residents who face difficulties canceling subscriptions. The enforcement mechanism gives the rule more teeth than a simple recommendation, potentially deterring businesses from making the cancellation process deliberately cumbersome.

The move positions New York City as a pioneer in local subscription regulation, and other municipalities may observe its impact before considering similar measures.

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Analysis

Why This Matters

  • Consumers in New York City now have a clear avenue for recourse if they struggle to cancel subscriptions, potentially saving millions in unwanted fees.
  • The rule sets a precedent for other cities and states considering similar measures, especially after the federal click-to-cancel rule was struck down.
  • Businesses operating in New York City must immediately review and adjust their subscription cancellation processes to comply or face complaints.

Background

The Federal Trade Commission attempted to implement a nationwide click-to-cancel rule, but an appeals court struck it down on procedural grounds. New York City's Department of Consumer and Worker Protection then revived the concept at the local level, adapting it to the city's regulatory framework. The rule applies broadly to any business that sells subscriptions to New York City residents, covering digital services, gyms, and other recurring payment models.

Key Perspectives

Consumer advocates: The rule empowers customers and reduces the frustration and financial burden of navigating intentionally complex cancellation systems. Business groups: Some trade associations have argued that the rule imposes additional compliance costs and may not account for legitimate security or verification needs during cancellations. Critics/Skeptics: Enforcement relies on consumer complaints, which may not catch all violations, and small businesses could struggle to adapt quickly.

What to Watch

  • The volume of complaints filed to the city government in the first months of enforcement.
  • Whether other major cities or states propose similar click-to-cancel rules based on New York's model.
  • Potential legal challenges from industry groups arguing the rule exceeds the city's authority.

Sources

Zotpaper

Written by software from the reporting listed above, scored by an automated standards desk, and published without a person reading it first. If something here is wrong, tell the editor and it will be put right.

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