Marking the latest development in the trend toward increased regulation of automatically renewing subscription offers, on April 8, the New York City Department of Consumer and Worker Protection (DCWP) proposed what would be the nation’s first municipal “Click to Cancel” rule. This proposed regulation would mirror existing state law requirements providing for consumer rights and protections concerning automatic renewal or continuous service offers. In doing so, the DCWP takes aim at so-called “subscription traps” that it claims unfairly prevent consumers from discontinuing services they no longer wish to pay for. Specifically, the rule would make failure to offer consumers streamlined cancellation methods for continuous service offers a deceptive and unconscionable practice in violation of the New York City Administrative Code. This proposal marks the latest development in New York City’s efforts to prioritize consumer protection initiatives across economic sectors. Important elements of the proposed rule are summarized below.

Required Disclosures and Notifications

The proposed rule would require any person making an automatic renewal or continuous service offer to clearly and conspicuously disclose the material terms of the offer, including:

• A description of the product or service,
• The costs of the service,
• The frequency of charges,
• The deadline by which a consumer must cancel in order to avoid additional charges, and
• The cancellation mechanism available to the consumer.

These disclosures would have to be made in visual proximity (or temporal proximity, for verbal offers) to the request for consent to the offer. For offers involving a free gift or trial period, persons would be required to clearly and conspicuously explain any price changes resulting from the expiration of the trial period, including when such charges occur and what the new price would be. For offers with initial trial periods of more than one month, businesses would be required to notify consumers of a renewal charge at least three days but no more than twenty-one days before the cancellation deadline.

The proposed rule would also impose certain renewal notification requirements for continuous service offers with an initial term of one year or more that automatically extend for a period of six months or more and would require notification to consumers at least five business days, but no more than 30 business days, before any material change to the terms of the offer, including price increases.

Cancellation Mechanisms

The proposed rule would require any person making an automatic renewal or continuous service offer to provide consumers with the option to cancel at any time using a simple and easy-to-use mechanism comparable to and through the same medium as the mechanism used to provide consent. The rule would require businesses to allow a consumer to cancel by any medium the consumer could use to consent to such an offer. If a business obtains consumer consent in person, it would also be required to offer cancellation through an online mechanism like a website or email, notably diverging from the current New York State law requirement which allows businesses to offer a telephone cancellation mechanism in lieu of an online mechanism in this circumstance.

The rule would broadly prohibit persons from imposing unreasonable conditions or otherwise obstructing or delaying cancellation requests by a consumer, including by hanging up on consumers who attempt to cancel by telephone, misrepresenting the consequences of cancellation, or otherwise unreasonably delaying a consumer’s cancellation request.

Enforcement, Liability, and Exemptions

The proposed rule would impose liability on violators in an amount equal to the amount charged for automatic renewal after the consumer’s first attempt at cancellation. The DCWP would have citywide enforcement authority and the ability to assess civil penalties against violators starting at $525 per violation.

Importantly, the rule, as proposed, would exempt banks, bank holding companies, and other financial institutions licensed under federal or state law, as well as any entity, including its subsidiaries and affiliates, regulated by the New York Department of Financial Services. These entities are also exempt from the corresponding state law requirements.

Relation to Existing State Law

The proposed rule substantively mirrors existing New York State law requirements. New York General Business Law § 527-a currently requires businesses making automatic renewal or continuous service offers to clearly and conspicuously present the terms and conditions of the offer, obtain affirmative consent, and provide consumers with a mechanism to cancel the offer that is as easy to exercise as the sign-up mechanism. A separate New York State statute, New York General Business Law § 624, specifically requires health clubs to accept consumer subscription cancellations through a website if sign-up is also offered through a website.

New York City’s proposed rule would be consistent with these existing state law requirements adopting the statutory definitions for “Automatic Renewal” and “Continuous Service” and imposing substantively the same disclosure and cancellation requirements as those provided under New York General Business Law § 527-a, aside from the one deviation noted above (requiring businesses that obtain consumer consent in person to provide an online mechanism for cancelation rather than an online or telephone cancellation mechanism) .

While the proposed rule would not impose significant new regulatory burdens on entities already complying with applicable state law, it would open businesses up to possible enforcement actions and penalties at the municipal level.

In recent public statements, DCWP Commissioner Samuel Levine clarified that the intent behind aligning the proposed rule with existing state law was to make it as easy as possible for business to comply. This approach, according to Levine, aligns with the DCWP’s broader goal of simplifying regulations and reducing red tape while still providing for robust consumer protection. Levine further alluded that the DCWP would be releasing additional proposals in the near future in line with this goal.

Other State-Level Developments

New York City’s proposed rule marks a significant development in the ongoing trend of legislative efforts below the federal level aimed at tightening consumer protections around automatic subscription renewal regulations, bolstering consumer consent requirements, and ensuring straightforward cancellation processes. While the proposed rule would mark the first municipal effort to impose such regulations, numerous states have recently enacted legislation addressing the issue, including Maryland’s HB0107, signed on April 22, 2026 with an effective date of June 1, 2026, and Colorado’s SB25-145, which took effect in February 2026. These states joined numerous other states, including Utah, Idaho, California, Massachusetts, Georgia, Minnesota, Colorado, Illinois, and Arkansas, in imposing “Click to Cancel” requirements on automatically renewing subscription services.

Next Steps

The comment period for the proposed rule closed on May 8, 2026 following a virtual public hearing held on the same date. The DCWP will now consider the comments and likely finalize the rule either as proposed or with revisions based on those comments. We will continue to monitor developments related to this proposed rule and other state-level initiatives to regulate automatic subscription renewals.