State officials say new laws offer protections against recurring services and inactivity fees


ALBANY, N.Y. (Feb. 9, 2021) – The New York State Division of Consumer Protection and the New York State Department of Financial Services are issuing an alert to consumers regarding two new laws – one providing new protections when purchasing recurring services, and the other requiring notification by state-regulated financial institutions before charging any account inactivity fees.

Under New York General Business Law, anyone selling automatic renewal programs or continuous services to New Yorkers must provide an easy-to-use cancellation mechanism before the consumer pays for the service. Consumers who purchase these services online also must be allowed to terminate the agreement online at any time.

“Many consumers complain about companies billing their credit card after they call or go online to cancel their subscription. Some companies make it difficult to cancel or say they have cancelled service, but consumers continue to be billed,” said Secretary of State Rossana Rosado, who oversees the state Division of Consumer Protection. “The new law empowers the attorney general, on behalf of consumers, to go after companies that automatically renew and charge consumers without adequate notice.”

Under a new Banking Law, New York state-regulated financial institutions that provide an account to a customer must provide written notification of any pending charges to a customer 30 days before charging any fee based on account inactivity. The law allows such written notification to be sent electronically.

“This new protection will ensure that New Yorkers, so many of whom are navigating economic uncertainties, aren’t caught off guard and penalized without notice for mere inactivity, and instead have the opportunity to avoid these unnecessary costs,” said Superintendent of Financial Services Linda A. Lacewell.  

“Automatic renewal” programs (subscription or purchasing agreements that are automatically renewed each term) or “continuous service” plans (subscription or purchasing agreements that continue until the consumer calls to cancel) must clearly state the cancellation terms to consumers before entering into the agreement.

If consumers purchase the item online, those terms must be clearly stated near the purchase approval button. If consumers purchase over the phone, the terms must be read clearly before the consumer completes the purchase. These businesses also must provide a toll-free telephone number, email address or other cost-effective, timely, and easy-to-use option for consumers to cancel after agreeing to the contract.

In addition, if the original offer includes a free gift, the consumer can keep that free gift whether or not they cancel the service during the trial period or at a later date.


Consumers considering free offers should keep the following tips from the Federal Trade Commission in mind:

Do some research. Search the product and company name online with words like “review,” “complaint,” or “scam” to see what others are saying.

Find the terms and conditions for the offer. If you can't find them or can't understand exactly what you're agreeing to and when you’ll be charged — including what you’ll be charged for and the date by which you have to act to avoid a charge – don't sign up. 

Monitor your credit and debit card statements. If you’re charged for something you didn’t order, dispute those charges as soon as you spot them. See

If it is believed a company is not following the new law when offering recurring services or free gifts, consumers should file a complaint with the state Division of Consumer Protection at

If consumers are charged account inactivity fees without the required notice, they are encouraged to file a complaint with the state Department of Financial Services at

The New York State Division of Consumer Protection provides voluntary mediation between a consumer and a business when a consumer has been unsuccessful at reaching a resolution on their own. The Consumer Assistance Helpline 1-800-697-1220 is available from 8:30 a.m. to 4:30 p.m. Monday to Friday, excluding state holidays, and consumer complaints can be filed at any time at

The state Division of Consumer Protection also can be reached via Twitter at @NYSConsumer or Facebook at