NYC Proposes New Rules for Auto-Renewal Subscriptions

By Timothy A. Butler, Matthew White, Tessa Cierny & Cody B. Davis on April 28, 2026

Posted in Featured, New York, Regulatory, State and Local

On Jan. 5, 2026, New York City Mayor Zohran Mamdani signed Executive Order (EO) No. 10, directing the NYC Department of Consumer and Worker Protection (DCWP) to enforce existing consumer protection laws against negative option offers. On March 25, 2026, the DCWP issued a Notice of Public Hearing and Opportunity to Comment on proposed “Rules Relating to Cancellation of Subscriptions” to “ensure that consumers can easily cancel subscriptions and are not subject to deceptive and unconscionable trade practices relating to the cancellation of subscriptions.”

EO 10 Highlights

Calling out negative option offers as “subscription tricks and traps,” EO 10 notes that businesses “deceptively enroll people into subscriptions and unfairly keep them stuck there, including through making it difficult to cancel” and states that “nobody should be stuck paying for a subscription they do not want[.]”

Specifically, the EO directs the DCWP to:

Increase enforcement. The EO directs the DCWP to “crack[] down on illegal subscription tactics” by prioritizing monitoring, investigating, and taking enforcement action against business’ subscription-related practices that deceive or mislead consumers. Such practices include enrolling people into subscriptions, misrepresenting or failing to disclose pricing or renewal terms, and unfairly keeping them subscribed by making them difficult to cancel.
Promulgate Rules. The EO directs the DCWP to promulgate rules to combat subscription tricks and traps or issue recommendations to the New York City Council about additional protections, resources, and authorities to fully protect New Yorkers from “underhanded tactics.”
Coordinate Interdepartmentally. The EO directs the DCWP to coordinate with the city’s Law Department and the New York State Attorney General to combat subscription tricks and traps.

DCWP Proposed Rule Key Highlights

Expanding on existing New York law (e.g., NY Gen. Bus. Law § 527), the DCWP’s proposed rule would provide that failing to give consumers an easy way to cancel a subscription is an unconscionable trade practice under NYC Administrative Code’s prohibition of deceptive or unconscionable trade practices in the sale of consumer goods or services, “because it forces customers to purchase services they no longer want, requiring consumers to jeopardize more money than was immediately at issue in the transaction.”

The proposed rule would apply to a subscription for any type of goods or services that meets the definitions of automatic renewals (plans in which a paid subscription or purchasing agreement is automatically renewed at the end of a definite term for a subsequent term) or continuous service offers (plans in which a subscription or purchasing agreement continues until the consumer cancels the service).

If finalized as proposed, the proposed rule would require that businesses:

Provide Clear, Conspicuous Pre‑Purchase Disclosures: The proposed rule would require that businesses disclose — prominently and in close proximity to consent requests — the description of the subscription, total cost and billing frequency, cancellation deadlines, cancellation methods, and the terms of any free trials, gifts, or temporary pricing (including when and how prices change) before requesting consumers’ consent or billing information.
Offer Simple Cancellation Mechanisms: The proposed rule would require that businesses allow consumers to cancel subscription plans at any time using a simple mechanism through the same medium they used to enroll (e.g., online sign‑up would require an online cancellation option) and through all methods in which the business allows consumers to provide consent to the subscription plan or renewal. Where the consumer enrolled in person, businesses must still offer online cancellation options “where practical.”
Prohibit Cancellation Obstructions: The proposed rule would prohibit businesses from obstructing or unreasonably delaying cancellation, expressly prohibiting businesses from hanging up on consumers who call to cancel, obscuring cancellation pathways, misrepresenting cancellation consequences or delays, or offering retention discounts or benefits while simultaneously obstructing or delaying cancellation.
Issue Renewal and Change Notices: The proposed rule would require that businesses issue advance notice: (a) 15 to 45 days before cancellation deadline for renewals for subscriptions with an initial paid term of one year or more; (b) 3 to 21 days before the first billing deadline for free trials longer than one month; and (c) 5 to 30 days before any material changes, including price increases. The proposed rule would also require businesses to deliver notices via the consumer’s selected channel (email, text, app notification, etc.) and include cancellation instructions.

Companies found violating the rule as proposed would face an initial $525 fine per violation and up to $3,500 for repeat offenses. They would also be liable for restitution of the amounts charged after a consumer’s first cancellation attempt.

Certain businesses — such as entities regulated by the Department of Financial Services, banks and other licensed financial institutions, and certain sellers of insurance — would be exempt from the proposed rule.

Takeaways for Businesses

New York City’s proposed rule closely mirrors the Federal Trade Commission’s vacated Negative Option Rule, California’s Automatic Renewal Law, and similar laws and regulations in about half the states nationwide. Companies using negative option features — automatic renewals, continuity programs, trial‑to‑paid conversions, or bundled offers — should consider proactively evaluating their disclosures, consent mechanisms, renewal-notification practices, and cancellation pathways to comply with the nationwide patchwork of requirements.

DCWP will hold a public hearing on the proposed rule on May 8, 2026, at 11:00 a.m. ET; any person or party interested in submitting comments should do so by that date.

We have provided ongoing analysis and commentary regarding developments concerning all-in-pricing requirements in advertising and auto-renewal subscriptions, including the prior client alerts and blog posts listed below: