New York City is moving toward one of the nation’s broadest crackdowns on junk fees, proposing a citywide rule that would require businesses to display the full price consumers must pay instead of advertising a low headline price and piling on mandatory charges later.

The proposed “all-in pricing” rule would cover virtually any business that advertises goods or services in the city or markets them to New York City consumers, regardless of where the company is based., Mayor Zohran Mamdani announced Wednesday.

That could make the rule relevant to rental housing, food-delivery platforms, entertainment tickets, subscriptions, professional services, financial products and countless online purchases.

The central requirement is simple: When a business displays a price, that price must include all mandatory fees and charges and must appear at least as prominently as any other price information. Taxes, government-imposed charges and reasonable shipping costs for physical goods could still be added separately.

“The Mamdani Administration is shutting the door on the era of fleecing New Yorkers with junk fees and subscription traps,” said Samuel A.A. Levine, Commissioner of the New York City Department of Consumer and Worker Protection (DCWP).

“These two rules will ensure that the price you see is the price you pay—no hidden charges, no endless subscription services and no advantages for businesses that cheat. Requiring companies to compete on price will lower costs for all New Yorkers and level the playing field for honest businesses.”

The Department of Consumer and Worker Protection, or DCWP, says the proposal is aimed at the familiar bait-and-switch experience in which consumers choose a product based on one price, invest time in the transaction and then discover service fees, processing charges, destination fees or other unavoidable costs at checkout.

“Hidden fees and subscription traps make everyday life more expensive and undermine trust in the marketplace,” Susan Weinstock, CEO of the Consumer Federation of America, said when the proposal was announced.

“Right now, companies make it easy to sign up for things and hard to cancel them,”  said Julie Su, Deputy Mayor for Economic Justice. “They advertise one price and charge you another.”

What would count as a mandatory fee?

The proposal uses a broader definition than simply asking whether a charge can technically be declined.

A mandatory fee would include:

• A charge the consumer must pay to complete the purchase.
• A fee that is not reasonably avoidable, including one that is difficult to find or remove.
• A separate charge for something a reasonable consumer would expect to be included in the advertised product or service.

That last provision could be especially consequential. It is intended to prevent businesses from breaking ordinary components of a purchase into supposedly optional pieces simply to advertise a lower price.

A company selling a service by the hour, for example, would have to include mandatory hourly surcharges in the advertised hourly rate. A cleaning company advertising a per-room price would have to include unavoidable charges in that figure.

For recurring services, the advertised price would have to include all mandatory charges for one billing period. Nonrecurring mandatory charges, such as enrollment or signup fees, would also have to be displayed prominently.

Before the customer agrees to pay, the business would have to provide a full breakdown of excluded costs, including optional add-ons, taxes and shipping, along with the final amount due.

More than a disclosure rule

The proposal would not merely require businesses to list fees. It would also prohibit them from misrepresenting what a fee is for, how much it costs, whether it is refundable or which product or service it covers.

That could put greater scrutiny on vague charges labeled as “service,” “processing,” “administrative” or “destination” fees.

Businesses would also have to maintain records documenting the basis for every fee, including its purpose, amount and refundability, and provide those records to DCWP on request.

Failure to keep or produce those records could create a legal presumption that the facts alleged by the city are true. For example, if a company could not document that a shipping charge reflected its actual shipping costs, regulators could presume that it did not.

That recordkeeping provision could turn out to be one of the proposal’s most powerful enforcement tools.

But Mayor Mamdani said any inconvenience to businesses would be outweighed by the savings consumers would realize.

“New Yorkers reckon with (this) as almost every part of the customer experience when they are not told how much something truly costs, and when they get a mess of hidden fees that they never signed up for, cannot cancel, cannot afford,” he said, emphasizing that the costs from hidden fees by airlines, credit card companies, hotel bookings and streaming services “add up.”

Rental housing could be a major battleground

The proposal specifically identifies rental housing as one of the industries where hidden or delayed fees have become common.

Renters can encounter mandatory application costs, amenity fees, payment-processing fees, utility charges, move-in charges or other expenses that are not included in the advertised monthly rent.

Under the proposal, a landlord or rental platform advertising a unit at a particular monthly price could have to include recurring mandatory charges in that figure, while separately and prominently identifying one-time mandatory costs.

That could make apartment comparisons more meaningful, particularly in a city where an advertised rent can understate the amount a tenant must actually pay.

The exact reach of the rule in housing transactions will likely be a focus of the public-comment process, particularly where state real-estate law or other regulations may overlap.

Financial companies may not be exempt

Banks, lenders and fintech companies are already subject to federal disclosure laws covering interest rates, finance charges, account fees and mortgage costs.

But the proposed city rule does not categorically exclude financial services. Instead, it says the requirements would not apply where federal or state law preempts city regulation.

That leaves potentially significant gray areas.

Marketing for loan origination fees, expedited-payment charges, account-maintenance fees, debt-collection payment fees, fintech platform charges and subscription-based financial tools could fall within the city’s rule when existing federal disclosure statutes do not fully govern the advertisement.

The DCWP is specifically asking commenters to identify federal or state laws that may conflict with the proposal, suggesting that preemption and overlapping disclosure requirements could become central legal issues, Consumer Finance Monitor noted.

Penalties would escalate quickly

The proposed penalty schedule calls for fines of:

• $525 for a first violation.
• $1,050 for a second violation.
• $3,500 for a third or subsequent violation.

The proposal contains no advance cure period that would allow a business to correct the violation before being penalized. The city could also seek restitution for consumers harmed by unlawful fees.

An initial city news release said fines would start at $350, but the actual proposed rule text lists a first-violation penalty of $525. The formal rule text is the controlling document for the proposal, according to the NYC government.

Broader than the federal rule

The Federal Trade Commission’s national junk-fee rule focuses primarily on live-event tickets and short-term lodging.

New York City’s proposal is deliberately industry-neutral. It would establish a general pricing standard for nearly all consumer transactions unless federal or state law prevents the city from regulating a particular field.

It also goes further than the federal rule by requiring fee records, prohibiting misleading descriptions of fees and allowing adverse presumptions when companies fail to produce documentation.

California, Massachusetts and Minnesota have also adopted broadly applicable price-transparency requirements, but New York City’s plan would be an unusually expansive municipal rule.

What happens next

The rule is still a proposal and has not taken effect.

DCWP will accept public comments through Aug. 7 and hold a virtual public hearing at 11 a.m. Eastern that day. The agency may revise the language after reviewing public testimony and written submissions. (NYC Rules)

The proposal arrives alongside New York City’s separate click-to-cancel rule, which becomes effective Oct. 1 and requires businesses to give consumers straightforward ways to end recurring subscriptions. (NYC Government)

Together, the initiatives represent an aggressive attempt to attack two common affordability drains: prices that rise during checkout and recurring charges that are far easier to start than to stop.

For consumers, the potential benefit is not necessarily that every product becomes cheaper overnight. Businesses could still charge fees and raise prices. But they would have to compete using a number that more closely reflects what the customer will actually pay.

That could make comparison shopping easier — and make it much harder for a company with a $120 product and $30 in unavoidable fees to appear cheaper than a competitor charging an honest $140 upfront.