We just learned the New York City Department of Consumer and Worker Protection recently (and apparently stealthily) posted a proposed rule for public comment that will significantly impact subscription marketers selling into The Big Apple. Comments are due May 8 and the DCWP will hold a virtual hearing on the proposed rule at 11 AM ET that day.
While the notice announcing the proposed rule appears to focus solely on cancellation, "to ensure that consumers can easily cancel subscriptions and are not subject to deceptive and unconscionable trade practices relating to the cancellation of subscriptions," the actual proposed rule is much broader and mirrors many requirements and prohibitions currently included in various state laws, including New York! In fact, many, if not all, of the proposed provisions are already codified in New York State law, at GBL 29-BB (527-a) and GBL 396-mm. We truly hope this fact is noted in many comments to the proposal!
Even more fun interesting is that despite the DCWP's announcement emphasizing making cancellation easy - and is even styled as "Click to Cancel" - there is in fact no requirement to provide a one-click mechanism for cancellation as required by some state laws, only that cancellation be "simple."
Here are the highlights of the proposed rule:
- Disclose terms "clearly and conspicuously" (not defined).
- Provide consumers with a simple cancellation mechanism that is as easy to use as the method used to enroll and in the same medium.
- Provide a simple way to cancel "at any time through all mediums by which the business allows consumers to" agree to the offer or "any price increase."
- Note: This "price increase" language is a bit concerning because the proposed rule does not require sellers to obtain consumer consent to a price increase. But notably, a recent amendment (see line 40 on page 61) to the New York state auto renewal law does have this consent requirement, unless the seller provides a pro rata refund of the increased price up to 14 days after the price increase is charged.
- Would prohibit imposing unreasonable or unlawful conditions upon, refuse to acknowledge, or obstruct or unreasonably delay a cancellation request or attempt to cancel.
- Save attempts and informing consumers of the effect of cancelling is permitted provided the seller does not engage in any of the above prohibited behavior.
- Must send a renewal notice where an initial paid term of a year or longer is renewed for a paid term of six months or longer. Must be sent between 15-45 days prior to the deadline to cancel to avoid the charge, in a manner selected by the consumer, and include instructions on how to cancel.
- Must provide notice of a material change to the terms, including a price change, between 5-30 days prior to the effective date of the change.
- Where a free gift or trial lasting more than a month is offered that will convert to a paid renewal, must send a notice between 3-21 days prior to the cancellation date.
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