New York City is moving aggressively into consumer protection territory that federal regulators have largely stepped back from. In January 2026, Mayor Zohran Mamdani signed two executive orders directing the Department of Consumer and Worker Protection (DCWP) to crack down on hidden fees and subscription tricks and traps. DCWP has now followed through, finalizing a first-of-its-kind municipal click-to-cancel rule (previously discussed here and here) and publishing a proposed citywide “junk fee” ban.
Link to Background Background
DCWP has long been one of the most active municipal consumer protection agencies in the country, with authority to promulgate rules and bring enforcement actions under the City’s Consumer Protection Law. Mayor Mamdani’s Executive Orders 9 and 10, both signed January 5, 2026, directed DCWP to prioritize hidden fees and manipulative subscription practices and to use its rulemaking authority to fill gaps where current law fell short.
The orders arrived against a backdrop of growing federal and state activity in both areas, including the Federal Trade Commission’s (FTC) own “click-to-cancel” rule (discussed here), but as federal agencies have pulled back on consumer protection enforcement, New York City has stepped into that space.
Link to Key Facts Key Facts
- Directed DCWP to combat pricing practices where “one price is advertised but a different, higher price is charged at checkout.”
- Established a Citywide Junk Fee Task Force co-chaired by the Deputy Mayor for Economic Justice and the DCWP Commissioner, with participation from agencies spanning housing, health, transportation, small business, and buildings.
- Directed DCWP to pursue rulemaking, enforcement, and legislative recommendations to the Task Force.
Proposed Junk Fee Rule (Published July 8, 2026)
- Would require all-in pricing — businesses must clearly and conspicuously disclose the total price of a good or service (meaning the price inclusive of all mandatory fees and charges) in any offer, display, or advertisement, and that total price must be displayed at least as prominently as any other pricing information.
- “Mandatory fees and charges” is defined broadly to include fees that are not reasonably avoidable by the consumer, and any separate fees for aspects of a good or service that a reasonable person would expect to be included in the purchase.
- Before a consumer consents to pay, businesses must also disclose the nature, purpose, and amount of any fee excluded from the advertised total price, along with the final amount the consumer must pay.
- It is a deceptive and unconscionable trade practice to misrepresent the nature, purpose, amount, or refundability of any fee or charge.
- Companies charging “service” or “processing” fees would be required to document what those fees actually cover. Failure to maintain or produce required records creates a presumption that a material fact alleged by DCWP in an enforcement proceeding is true — meaning a business that cannot document the basis for a fee may be presumed to have charged it improperly.
- The rule is industry-neutral and applies to any person offering, displaying, or advertising goods or services in New York City or to New York City consumers, except where regulation is preempted by federal or state law. DCWP has flagged several federal financial services laws, including the Truth in Lending Act, Truth in Savings Act, Real Estate Settlement Procedures Act, and the Electronic Fund Transfer Act, as potentially preemptive and has invited public comment on whether any federal or state laws conflict with the proposed rule.
- Fines would start at $525 for a first violation, $1,050 for a second violation, and $3,500 for third and subsequent violations.
- The public comment deadline is August 7, 2026. A public hearing will be held the same day at 11:00 AM.
Executive Order 10 — Fighting Subscription Tricks and Traps
- Directed DCWP to prioritize enforcement against subscription practices that deceive consumers, including unauthorized enrollment, misrepresentation of pricing or renewal terms, and making cancellation unreasonably difficult.
- Directed DCWP to coordinate with the City’s Law Department and the New York State Attorney General on enforcement.
Click-to-Cancel Rule (Effective October 1, 2026)
- Makes New York City the first municipality in the country to adopt a click-to-cancel rule.
- Requires businesses offering automatic renewals or continuous service subscriptions to:
- Disclose material terms and consumers’ rights upfront and obtain affirmative consent before charging.
- Provide a cancellation mechanism that is as easy to use as the sign-up process and available through the same medium.
- Refrain from requiring consumers to ship back items that were provided to them for free.
- Prohibits hanging up on consumers attempting to cancel, obscuring cancellation instructions, or misrepresenting the consequences of cancellation.
- Fines start at $525 per violation and businesses may be liable for refunding consumers.
- Notably, the rule exempts banks, bank holding companies and their subsidiaries and affiliates, credit unions, other state or federally licensed financial institutions, and entities regulated by the New York Department of Financial Services.
Link to Our Take Our Take
These rules move the discussion from intent to obligation. The Click-to-Cancel rule takes effect October 1, 2026. Businesses offering subscription or auto-renewal products to New York City consumers have limited time to assess whether their sign-up flows, disclosure practices, and cancellation mechanisms comply.
The financial institution exemption in the Click-to-Cancel rule is meaningful and worth noting, i.e., banks, credit unions, and DFS-regulated entities are carved out. However, that exemption does not extend to all businesses in the consumer financial services space, and the proposed “junk fee” rule contains no comparable carve-out. Indeed, DCWP has specifically flagged several federal financial services laws, including TILA, TISA, RESPA, and EFTA, as potentially preemptive and has invited public comment on whether they conflict with the proposed rule.
Financial services companies and others that charge fees disclosed outside of their advertised price should strongly consider submitting comments before the August 7, 2026 deadline. Non-exempt businesses that charge mandatory fees disclosed late in the transaction process should treat the junk fee rulemaking as an active compliance development and engage in the public comment process.