New York City deceptive subscriptions rule

New York City deceptive subscriptions rule is a consumer-protection rule adopted on July 10, 2026 that requires businesses to let consumers cancel a subscription as easily as they signed up for it, through the same medium, making New York City the first US city to impose such a "click to cancel" mandate. The rule takes effect October 1, 2026, and businesses that fail to provide a simple cancellation method face civil penalties starting at $525 per violation plus restitution to affected consumers. It follows the Eighth Circuit's July 8, 2025 vacatur of the Federal Trade Commission's national Negative Option Rule, which was struck down on procedural grounds days before its compliance deadline.

The Guardian reported that New York City became the first in the US to ban deceptive subscription practices.

Executive Order 10 and adoption

On January 5, 2026, Mayor Zohran Mamdani issued Executive Order No. 10, which directs the Department of Consumer and Worker Protection (DCWP) to prioritize monitoring, investigating, and taking enforcement action against deceptive subscription-related practices. The order, titled "Fighting Subscription Tricks and Traps," also directs the agency to promulgate rules combating subscription tricks and traps. DCWP reported that it received more than 100 complaints from consumers about the difficulty of cancelling subscriptions in 2025 alone.

DCWP published the proposed rule on April 8, 2026 and held a public hearing on May 8, 2026 before adopting the final rule on July 10, 2026. At the April announcement, Mayor Mamdani framed the measure as a response to corporate extraction:

Subscription traps are just another way that big corporations extract hard-earned money from working people. In our city, we're drawing a clear line: if you can sign up with a click, you must be able to cancel with one.

Commissioner Samuel A.A. Levine, a former head of consumer protection at the Federal Trade Commission, described the cancellation burdens the rule targets:

People shouldn't have to wait on hold for half an hour or send a certified letter or show up to a store in person in order to cancel

The Roosevelt Institute estimated that the rule would save New York City adult consumers as much as $162.5 million per year and at least 600,000 hours a year.

Rule requirements and penalties

The rule adds a new Part 8, titled "Click to Cancel," to Subchapter A of chapter 5 of Title 6 of the Rules of the City of New York, under the authority of sections 1043 and 2203(d) of the New York City Charter and section 20-702 of the Administrative Code. It codifies new sections 5-110 through 5-110.3, covering definitions, deceptive and unconscionable trade practices, restitution, and exemptions.

The central obligation is set out in section 5-110.1(c):

A person making an automatic renewal or continuous service offer to a consumer must provide the consumer with the option to cancel at any time using a simple cancellation mechanism that is as easy to use as the mechanism that the consumer used to provide consent and that is through the same medium that the consumer used to provide consent.

Section 5-110.1(c) of the adopted rule requires a cancellation mechanism that is as easy to use as the mechanism that the consumer used to provide consent and that is through the same medium that the consumer used to provide consent.

Where a consumer signed up in person, section 5-110.1(d) additionally requires the business to offer cancellation through an online mechanism such as a website or email. Section 5-110.1(b) requires businesses to present the material terms of an offer, including the cost, the frequency of charges, and the cancellation deadline, in a clear and conspicuous manner before requesting consent or billing information.

For subscriptions with an initial paid term of one year or longer that renew for a term of six months or longer, section 5-110.1(g) requires the business to send a renewal notice at least fifteen days before, but not more than forty-five days before, the cancellation deadline. Under section 5-110.2, a business found to have violated the rule is liable for the monetary amount charged for the subscription after the consumer's first attempt at cancellation.

The penalty schedule added to section 6-47 sets civil penalties of $525 for a first violation, $1,050 for a second violation, and $3,500 for a third and subsequent violation. Section 5-110.3 exempts five categories: services provided under a franchise issued by a New York State political subdivision, entities regulated by the Department of Financial Services, security alarm operators licensed by the state, banks and credit unions and other licensed financial institutions, and sellers and administrators of service contracts as defined under section 7902 of the Insurance Law.

Federal Negative Option Rule and its vacatur

In October 2024, the Federal Trade Commission amended its 1973 Negative Option Rule by a 3-2 vote, adding provisions that bar sellers from misrepresenting material facts & require disclosure of material terms, express consumer consent, and a simple cancellation mechanism at least as easy to use as sign-up. Press coverage called it the "click to cancel" rule, though the opinion refers to it as the amended Negative Option Rule.

Industry associations and individual businesses petitioned for review in four circuits, and the challenges were consolidated in the Eighth Circuit. In Custom Communications, Inc. v. Federal Trade Commission, No. 24-3137, decided July 8, 2025, the court granted the petitions & vacated the rule, holding that the Commission failed to follow procedural requirements under section 22 of the FTC Act, 15 U.S.C. § 57b-3(b)(1). The court found that once an Administrative Law Judge determined the rule would have an annual effect on the national economy surpassing the $100 million threshold, the Commission was required to issue a preliminary regulatory analysis but did not.

Concluding the Commission failed to follow the procedural requirements of § 22 of the FTC Act, 15 U.S.C. § 57b-3(b)(1), the Eighth Circuit voted to grant the petitions for review and vacate the Rule.

The Commission had originally set a compliance date of May 14, 2025, then deferred it to July 14, 2025; the court's disposition was vacatur of the entire rule, with no remand. According to The Guardian, President Donald Trump's FTC planned to propose a similar rule in the following months.

Economic impact and the $100 million threshold

Section 22 of the FTC Act requires the Commission to issue a preliminary regulatory analysis, including a description of reasonable alternatives and an assessment of the projected benefits and adverse economic effects, for any amendment it estimates will have an annual effect on the national economy of $100 million or more. In the notice of proposed rulemaking, the Commission preliminarily determined that the amendments would not reach that threshold, reasoning that most sellers already provided some disclosures, consent procedures, and cancellation methods, and it declined to prepare the analysis. At informal hearing sessions before an Administrative Law Judge in early 2024, industry parties submitted their own cost estimates; the Internet and Television Association estimated that compliance would cost major cable operators between $12 million and $25 million per company. The judge found that the rule would have an annual effect on the national economy surpassing $100 million, and the Commission did not then issue the preliminary analysis, instead finalizing the rule and preparing only a final regulatory analysis. The Eighth Circuit held that skipping the preliminary analysis deprived challengers of the chance to comment on alternatives, a prejudicial procedural error, and vacated the rule on that basis.

The ALJ grounded the threshold finding in the Commission's own figures, and the arithmetic put a number on what industry-wide compliance would cost.

Based on the FTC's estimate that 106,000 entities currently offer negative option features and estimated average hourly rates for professionals such as lawyers, website developers, and data scientists whose services would be required by many businesses to comply with the new requirements, the ALJ observed that unless each business used fewer than twenty-three hours of professional services at the lowest end of the spectrum of estimated hourly rates, the Rule's compliance costs would exceed $100 million.

The ALJ treated that implied twenty-three-hour ceiling as "clearly unrealistically low inasmuch as there are several new requirements proposed that would require changes in existing practices and/or disclosure forms," and rejected the Commission's assumption that most sellers already complied.

In that final regulatory analysis, the Commission estimated the rule's quantified benefits at a present discounted value of $6.1 billion to $49.3 billion over ten years, against quantified costs of $100.9 million to $826.2 million, and agreed with an expert report concluding that the rule's effects on the economy would surpass $100 million annually. Defending the rule before the Eighth Circuit, the Commission argued that "the low-end assessment of the Rule's benefits is seven times greater than the high-end assessment of its costs." The Commission reported that it received nearly 70 consumer complaints per day about negative option and subscription practices in 2024, up from 42 per day in 2021.

Documented cancellation traps

The rule addresses cancellation practices that have been documented in federal enforcement and in consumer reports.

FTC lawsuit against LA Fitness

On August 20, 2025, the Federal Trade Commission sued Fitness International, LLC and Fitness & Sports Clubs, LLC, the operators of LA Fitness and other gym chains including Esporta Fitness, City Sports Club, and Club Studio, which together have more than 600 locations and over 3.7 million members nationwide. The FTC's complaint alleges that consumers could cancel only with one specific employee, restricting cancellation to hours when consumers are typically at work, even though most locations operate up to 19 hours per day, seven days per week.

The FTC's August 20, 2025 announcement that it sued LA Fitness alleges the chain put roadblocks in cancellation and failed to provide a simple cancellation mechanism as required by law.

The complaint further alleges that consumers were told mailed cancellation forms should be sent by certified or registered mail, causing them to incur additional costs, and that consumers who tried to cancel by stopping charges to their bank or credit card were rebilled, often under new account numbers. The FTC alleges these practices violate the FTC Act and the Restore Online Shoppers' Confidence Act; the Commission vote authorizing the complaint was 3-0, and it was filed in the U.S. District Court for the Central District of California. Christopher Mufarrige, Director of the Bureau of Consumer Protection, described "a gym membership that seems impossible to cancel." The matter is an unresolved lawsuit; there has been no finding of liability, and the case is to be decided by the court.

Firsthand documentation by Louis Rossmann

Repair advocate Louis Rossmann has documented his own attempts to cancel gym memberships. In an October 2022 video about Best Fitness in Nashua, New Hampshire, he recounted that his repeated cancellation calls went unreturned, that he was billed again a month and a half later, that the gym's parent company then told him he could cancel only by sending his lease and an energy bill, and that after he sent the documents an email told him cancellation requests would only be accepted via certified mail or in person.

In September 2023 videos about LA Fitness, filmed after he moved to Texas, Rossmann recounted that cancellation required generating, printing, and mailing a form, and that he used a Privacy.com virtual card so he could stop the recurring charge with a single click. In a follow-up, he described mailing the required cancellation letter, after which LA Fitness attempted another charge that failed because he had signed up with a virtual card, and phone representatives twice told him they had no record of his cancellation before marking the membership canceled.

See also

• Click-to-cancel
• Dark pattern
• Federal Trade Commission
• Right to repair