New York City Leads U.S. With Ban on Deceptive Subscription Practices

New York City has introduced a regulation prohibiting companies from employing deceptive subscription tactics that lock consumers into unwanted gym memberships, streaming services, and other recurring charges, according to the city’s consumer protection office.

Effective October 1, the rule imposes substantial penalties and strict enforcement on violators. Businesses that fail to offer an easy cancellation process may face fines of $525 per affected subscription, plus restitution and additional fines.

Additionally, the city aims to curb so‑called junk fees that inflate the cost of items ranging from rentals to event tickets. A proposed measure would obligate sellers to disclose the full price—including all mandatory fees—up front, as outlined in a statement provided to the Guardian.

New York would become the first municipality in the United States to enact such a prohibition.

“Consumers shouldn’t be forced to endure long hold times, mail certified letters, or visit a store just to cancel a subscription,” said Samuel AA Levine, New York City’s commissioner of consumer and worker protection, in an interview.

The measures were unveiled during a press conference on Friday.

The proposed fee rule could have broad repercussions, affecting New York’s costly housing market, where roughly 70 % of residents are renters.

U.S. apartment tenants increasingly encounter extra charges—like “boiler management” and “lifestyle” fees—imposed by property managers, driving actual rental costs hundreds of dollars above the advertised rates on real‑estate platforms.

Should the renters rule survive public comment and a hearing, all mandatory fees—including annual charges—would have to be incorporated into the advertised monthly rent, Levine noted.

Levine warned that the prevailing practice fosters “a scenario where firms compete not on price but on their skill at concealing the true cost—a perverse incentive that severely warps the market.”

These initiatives form part of an aggressive campaign led by Zohran Mamdani and Levine—former head of the FTC’s consumer protection bureau—to curb what they view as nationwide predatory corporate practices.

Reflecting on the early Reagan era, Levine recalled that Washington officials once argued that markets would self‑correct and self‑regulate, making rule‑making unnecessary and letting firms police themselves. “That approach has yielded four decades of deceptive pricing,” he said.

While consumers broadly support bans on junk fees and subscription traps, industry groups have resisted them strongly. When the Biden administration rolled out a junk‑fee rule in 2024, the U.S. Chamber of Commerce denounced it as “an attempt to micromanage business pricing,” and lobbying from the real‑estate sector led to the removal of apartment fees from the federal proposal.

A federal judge invalidated the Biden administration’s nationwide click‑to‑cancel rule in 2025, just days before its scheduled launch, citing a procedural issue. The FTC under former President Donald Trump intends to introduce a comparable rule in the coming months.

Firms generate billions annually from automatic subscription renewals that consumers either do not desire or are unaware of. The Roosevelt Institute estimates that New York City’s subscription rule could save residents up to $162.5 million each year.

Although the subscription rule would bind only New York City residents, the proposed junk‑fee rule would reach businesses serving visitors—hotels, car‑rental agencies, and others. Levine advised that guests encountering undisclosed fees at hotel check‑in should file a complaint with the city.

The measure represents the Mamdani administration’s latest effort to tackle the city’s affordability crisis, following a campaign centered on lowering living costs for residents. Recent primary victories for Mamdani’s democratic‑socialist slate—endorsed by the mayor—reflect a growing voter appetite for left‑wing populism that pledges to empower working‑class Americans, echoing similar promises made by Donald Trump in the last three presidential elections.

The New York City Council has additionally proposed a rule prohibiting “surveillance pricing,” a practice whereby firms charge varying prices for identical goods or services based on algorithms that analyze consumers’ spending patterns and personal data.

Maryland enacted a ban on the practice in April, while Colorado’s governor vetoed a similar ban last month.

Levine said the city will solicit public comments on the junk‑fee rule before holding a hearing, adding, “I certainly hope we can finalize this rule by year’s end.”

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