NYC’s Click-to-Cancel Rule Is Now in Effect: What Businesses Outside the City Should Know 

Written By Luke Young

Overview 

New York City’s (the “City”) Click-to-Cancel Rule (the “Rule”) took effect on October 1, 2026. Adopted by the City’s Department of Consumer and Worker Protection (“DCWP”), the Rule governs how businesses disclose subscription terms, send renewal notices, and handle cancellations. The Rule is not limited to businesses located in the City. If you sell subscriptions to City consumers online, through an app, or by phone, it may apply to you. 

The Rule, codified at 6 RCNY §§ 5-110 to 5-110.3, covers subscriptions for any goods or services that renew automatically or continue until canceled. Noncompliance is treated as a deceptive and unconscionable trade practice under the City’s Consumer Protection Law, and a January 2026 mayoral executive order makes subscription practices an enforcement priority. 

The Rule largely tracks the automatic-renewal law of New York State, General Business Law § 527-a, but adds its own penalties, restitution, and cancellation-channel requirements. Federal law also continues to apply. 

What the Rule Requires 

Clear disclosures up front. Before asking for consent or payment information, a business must clearly disclose what the subscription covers, how much and how often the consumer will be charged, the deadline to stop future charges, and how to cancel. Free trials and promotional pricing also require an explanation of when the promotion ends and what the consumer will pay afterward. 

State law adds a consent requirement. Under GBL § 527-a, a business must obtain the consumer’s affirmative consent before charging for the initial term. For price increases, State law requires either the consumer’s affirmative consent or allowing the consumer to cancel within at least 14 days after the increased charge and receive a pro rata refund for the remaining term. 

The Rule requires businesses to allow cancellation at any time through a simple mechanism that is as easy to use as the one the consumer used to consent, and through the same medium. Cancellation must also be available through every medium through which the business accepts consent to the subscription or to a price increase. If a consumer consents in person, the business must offer an online cancellation method, such as a website or email, and, where practical, a similar in-person option. 

A business may not impose unreasonable or unlawful conditions on cancellation, or refuse to acknowledge, obstruct, or unreasonably delay a cancellation request or attempt. Prohibited conduct includes hanging up on a consumer who calls to cancel, hiding or giving false information about how to cancel, misrepresenting the costs or consequences of cancellation, and misrepresenting the reasons for delays in processing a cancellation. A business may present a discount, retention benefit, or information about the effect of cancellation in response to a cancellation request, but only if doing so does not obstruct or unreasonably delay the cancellation or put unreasonable conditions on it. Businesses should review their subscription and customer-service procedures to ensure that cancellation requests are processed promptly. 

Required Notices 

The Rule requires advance notice of certain renewals, material changes, and introductory offers. For a subscription with an initial paid term of at least one year that renews for at least six months, the business must notify the consumer between 15 and 45 days before the cancellation deadline. A material change, including a price increase, requires notice at least five business days, but no more than 30 days, before it takes effect. If an offer includes a free gift or trial lasting more than one month, followed by an automatic charge, the business must provide notice between three and 21 days before the cancellation deadline for the first paid period. 

Renewal and trial notices must explain how to cancel, and all required notices must be delivered through the applicable notification method selected by the consumer from the options offered by the business, such as email, text message, or an in-app notification. 

Pending State bills would further amend GBL § 527-a, including proposals on free-trial notices, website cancellation links, and deleting stored payment information after cancellation. As of October 2026, these remain pending. 

Recurring Shipments of Physical Products 

Businesses that send physical products through recurring subscriptions should maintain reliable records of each consumer’s affirmative consent. Products sent without the required consent are treated as unconditional gifts, meaning the consumer may use or dispose of them without paying for or returning them, and the business cannot require the consumer to pay return-shipping costs. 

Does the Rule Reach Remote Sales? 

Having no office or store in the City does not take a business outside the Rule. A remote sale may connect to the City through the consumer’s residence, billing or service address, or location at sign-up, and DCWP has not said which factor controls. 

Until DCWP issues guidance, businesses should use the customer data they already collect to flag likely City transactions consistently. Businesses operating nationwide may find it simpler to apply one standard across all markets than to maintain a separate City-specific process. 

Penalties and Exemptions 

Violations of the Rule carry civil penalties of $525 for a first violation, $1,050 for a second violation, and $3,500 for a third or subsequent violation, with the same amounts applying on default. A person found to have violated the Rule is also liable for restitution of the amounts charged after the consumer’s first attempt at cancellation. The Rule does not specify whether violations are counted per consumer, per transaction, or per practice. Because conduct affecting many consumers could be treated as multiple violations, potential exposure may be significant. Compliance may require coordination among legal, product, marketing, billing, customer-service, fulfillment, and technology teams. 

The Rule exempts certain entities, services, and activities, including some services provided under a franchise issued by a New York political subdivision, entities regulated by the New York Department of Financial Services, licensed security-system alarm operators, specified financial institutions, and qualifying sellers and administrators of service contracts. A business relying on an exemption should compare its activities with the wording of the exemption and document the factual and legal basis for its position, because an exemption covering one entity, service, or business line may not apply to every affiliate, product, or activity within the same organization. 

Practical Next Steps 

Businesses serving City consumers should: 

  • review sign-up flows so required disclosures appear before payment information is requested;  

  • test cancellation in every channel;  

  • confirm that save offers do not slow down cancellation;  

  • check the timing of renewal, price-change, and trial notices; 

  • align customer terms with actual practice; and 

  • keep records of disclosures, consent, notices, cancellations, and refunds. 

Businesses should also assign responsibility for monitoring DCWP guidance and pending State and federal changes. If you would like help assessing how the Rule applies to your subscription offerings, please contact us. 

 

This article is for general informational purposes only and does not constitute legal advice. 

Luke Young