New York City has implemented a “click to cancel” rule that became effective Thursday, requiring companies to provide customers with straightforward methods to cancel automatically renewing subscriptions. The measure gives the city local enforcement authority over subscription cancellation practices, and city officials have established a consumer complaint portal to address violations. City officials noted that New York is the first municipality to adopt such a rule, positioning it ahead of other jurisdictions in addressing consumer concerns about subscription management.
Automatic renewal subscriptions, often called “negative option” contracts, have become an increasingly contentious issue for consumers and regulators alike. Data indicates that U.S. adults spend an average of $1,080 annually on subscriptions, with millennials spending approximately $1,215 per year on average. A notable finding showed that consumers waste an average of $205 each year on subscriptions they no longer actively use. Complaints to the Federal Trade Commission about difficult-to-cancel subscriptions have risen substantially, reaching an average of nearly 70 per day in recent years compared to 42 daily complaints several years prior.
More than half of states have enacted regulations governing automatic renewal practices, though these laws vary in their specific requirements. Most state-level rules typically mandate upfront disclosure of subscription terms, require explicit consumer consent and confirmation before charging, and establish easy cancellation mechanisms. Some states have also implemented renewal reminder requirements. Despite the FTC’s October 2024 finalization of a national click-to-cancel rule, it faced legal challenges and was vacated by a federal appeals court. The FTC has since sought public input on potentially updating its decades-old Negative Options Rule and may pursue additional federal regulatory efforts, though timing remains uncertain.
Congress has also engaged with the issue, with several pending bills including the bipartisan Unsubscribe Act, which would establish nationwide click-to-cancel requirements and mandate consumer approval before charging after free or reduced-cost trial periods. Meanwhile, emerging technology such as artificial intelligence subscription management tools may provide consumers with additional options for handling unwanted subscriptions. The FTC has continued enforcement actions against companies with problematic subscription practices using existing federal consumer protection laws, including a $35 million settlement announced in May with a major digital service provider.
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