- New York’s FY26 budget includes sweeping new consumer protections, with major oversight of Buy Now, Pay Later (BNPL) services now required.
The law also targets subscription traps, algorithm-driven “surveillance pricing,” and opaque retail return policies.
Gov. Kathy Hochul calls the legislation a victory for fairness and transparency in a digital economy increasingly prone to abuse.
New York Governor Kathy Hochul has signed into law a sweeping set of consumer protection measures, headlined by tough new rules for Buy Now, Pay Later (BNPL) lenders and digital marketplace practices. The provisions were part of the state’s FY26 budget bill and mark some of the most aggressive consumer reforms in the nation to date.
“These new laws are about fairness, transparency, and accountability and will help consumers save money and spend it wisely,” Hochul said in a statement. “Our tax cuts, credits, and rebates won’t be much help if bad actors are able to scam or mislead New Yorkers.”
Tightened oversight on BNPL
One of the most significant provisions targets BNPL services — short-term installment loans that have surged in popularity among online shoppers. The new law establishes a licensing and supervision framework for companies offering BNPL products, capping interest rates at 16% and banning “unfair, abusive, or excessive” fees.
State officials said the move was long overdue.
“Buy Now, Pay Later loans are increasingly popular but pose risks to consumers, including overextension, inconsistent credit reporting, data exploitation, and excessive fees,” they noted.
The law introduces key safeguards, including mandatory disclosures, clear dispute resolution procedures, and data privacy protections. It comes at a time when federal oversight is in flux, as the weakened Consumer Financial Protection Bureau (CFPB) has deprioritized enforcement of its own BNPL rule and hinted at possibly repealing it.
Subscription cancellations made simple
The legislation also addresses one of the most common frustrations for digital consumers: difficulty canceling subscriptions. New York now requires that subscription services provide cancellation options that are “as easy to execute as the sign-up process.”
This is aimed at eliminating what consumer advocates call “subscription traps” — practices that make it cumbersome or confusing to stop recurring charges.
Algorithmic “surveillance pricing”
In a groundbreaking move, New York will also become the first state to regulate “surveillance pricing.” This emerging practice uses consumer data — such as browsing habits, location, and purchase history — to set personalized prices, often without the customer’s knowledge.
The new law requires businesses to clearly disclose when a price has been generated using personal data and algorithmic tools, helping to restore transparency and trust in digital commerce.
“This practice is opaque and strips consumers of their ability to comparison shop and plan for the price of goods and services,” said state officials.
Standardized return and refund policies
With e-commerce continuing to grow, the law also mandates clearer, more accessible return and refund policies from online retailers. Sellers will now be required to post return conditions in a way that consumers can easily find and understand.
State leaders say the provision addresses growing consumer confusion amid a fragmented landscape of return windows, refund formats, and shipping logistics.