FTC “Click-to-Cancel” Rule - Mandatory Way to End Recurring Subscriptions and Memberships

On April 14, 2025 there will be no more of the never ending loop of frustration in trying to cancel your recurring subscriptions and memberships. The Federal Trade Commission ("FTC") has issued its finalized "Click to Cancel" rule, making it simpler for consumers to cancel recurring subscriptions. 

This rule targets those frustrating hurdles that consumers face to unsubscribe from services like streaming platforms and subscription boxes. In the past companies often required phone calls, long forms, or multiple steps for cancellations, even though signing up was easy with just a few clicks. This new rule ensures that if a business offers an online option to subscribe, they must also offer an easy online option to cancel in a similar manner. 

Businesses must now provide a clear, direct path for cancellation and requires companies to offer annual reminders of subscription renewals and to communicate any changes clearly to consumers. If a company proposes additional offers, alternatives, or incentives for consumers who are considering cancellation, the consumer must be able to decline those offers and proceed to cancel without additional hurdles. Check out the FTC's fact sheet here, which summarizes this new rule. 

This rule is the result of the thousands of complaints the FTC has received about recurring subscription practices each year. This rule will now provide a consistent legal framework by prohibiting companies from:

1. Misrepresenting any material fact made while marketing goods or services with a recurring subscription feature;
2. Failing to clearly and conspicuously disclose material terms prior to obtaining a consumer’s billing information in connection with a recurring subscription feature;
3. Failing to obtain a consumer’s express informed consent to the recurring subscription feature before charging the consumer; and
4. Failing to provide a simple mechanism to cancel the recurring subscription feature and immediately halt charges.

Violating the FTC’s new rule comes with a $51,744 civil penalty, injunctive relief, rescission or reformation of contracts that violate the Click-to-Cancel Rule, refund of money or return of property, the payment of damages, and public notification of the violation. Plus, there is additional exposure for state specific unfair or deceptive act or practice laws, such as NY General Business Law 349 for attorneys' fees and statutory penalties of $1,000 per violation. 

For more details, you can view the FTC's official release here. 

Reverse Loans Available for Senior Shareholders in New York

Those 62 and older living in cooperative apartment units in New York will soon be able to obtain reverse mortgage loans. The amended law was signed by Gov. Hochul on January 24, 2022.

To qualify, the borrower must certify annually on each anniversary of the loan that they reside in the unit and that it is their primary residence and the borrower's lender will advise the borrower on an annual basis of the name/contact information of the third-party on file (the borrower has the option to appoint a designee to be notified in the event of foreclosure) and provide the borrower a chance to update or change the information for the third-party.

The goal of the amended law is to provide co-op owners the same resources as traditional homeowners and to help senior citizens remain in their homes. 

New Law Calls for Holiday Cheer: Additional Fees on Gift Cards are now Unlawful!

Shoppers and gift givers need not worry about additional fees on Gift Cards/Certificates this holiday season. New York’s new law protects consumers from the predatory business practice of adding fees on gift cards. As mentioned in greater detail on our previous Blog, the law aims to prevent businesses from charging a plethora of additional fees on gift cards. The law further protects consumers from gift card expiration dates of fewer than 9 years, as well as prohibiting declining balances on gift cards over time. In addition, the law allows consumers to redeem remaining balances of $5 or fewer on gift cards.

If businesses are caught in violation of the Law, not only will they end up on Santa’s Naughty List, but businesses may also face court issued injunctions regardless of proof that anyone was injured or damaged because of the violation; and may face court issued fines of not more than $1,000 per violation.

If you purchased or received a gift card with added fees, an expiration date, or a declining balance then the business that issued the gift card may be liable for compensatory damages, punitive damages, penalties, and attorneys’ fees being awarded to the victim. If you believe that you were subjected to this kind of unlawful business practice by a merchant, you should speak to a lawyer and leverage New York General Business Law section 396-i to win your case.

Added Fees on Gift Cards is Holiday Peeve! But is the Business Practice Unlawful?

For years, businesses have taken advantage of consumers with predatory fees added to gift cards and gift certificates. But this Holiday Season, extra fees on gift cards will get businesses on Santa’s Naughty List!

The New York State Legislature passed a Bill amending section 396-I of the general business law, which bans businesses from charging additional fees on gift cards. The fees mentioned in the Bill include activation fees, retroactive fees, redemption fees, service fees, dormancy fees, latency fees, administrative fees, handling fees, access fees, periodic fees, renewal fees, re-loading fees, or any fee of any kind for gift cards.

The Bill goes further in its consumer protections.  Businesses are banned from selling gift cards where the balance declines over time or declines for nonuse. And if signed into law, it will be unlawful for businesses to sell gift cards with expiration dates unless it’s a promotional gift certificate that expires nine years after its issued and the expiration date is clearly stated.

Perhaps the most joyous aspect of this holiday-timed Bill is, consumers will be given the ability to redeem for cash value the remaining balance on a gift card if the remaining value is less than five dollars. However, there is an exception if the gift card is an open loop or promotional certificate.

While the holidays may be on our minds, it’s important to note that the Bill covers several types of gift cards that can be used across many types of businesses all year round.

Governor Hochul has until December 8^th to sign the Bill into law.  Once signed, the law will come into effect in one year.

If caught in violation of the law, businesses can be held liable for compensatory damages, punitive damages, penalties and attorneys’ fees being awarded to the victim. If you believe that you were subjected to this kind of unlawful business practice by a merchant, your lawyer will be able to determine its involvement during the lawsuit and leverage the business’s non-compliance with the NYS Bill to win your case.