Is this the end of subscription traps?

Most of us have been there. A free trial we forgot to cancel, a gym membership that carried on long after our last visit or a streaming service that quietly renewed at a higher price. Often the first we knew about it was a line on our bank statement, followed by a frustrating search for the cancel button.

The government and the Competition and Markets Authority (CMA) have recognised how widespread this problem is. From January 2027, businesses that sell subscriptions to consumers will have to comply with a new regime under the Digital Markets, Competition and Consumers Act 2024 (DMCCA). The rules were originally expected to come into force in spring 2027, so businesses now have less time to prepare than they may have planned for.

What do the new rules say?

In summary, the new regime will require businesses to:

• give consumers clearer information before they subscribe;
• send reminders before trials end or contracts renew; and
• make cancellation straightforward.

Businesses that fail to comply may have to refund consumers and could face enforcement action by the CMA, including substantial fines.

Why the new rules were introduced

Subscriptions are convenient for consumers and valuable for businesses. The problem is the same features that make them convenient also make them easy to forget. Auto-renewal, free trials that roll into paid contracts and cancellation processes that are far harder than signing up have left many consumers paying for services they no longer want or use.

The Government has estimated that millions of the subscriptions currently active in the UK are unwanted, and that the reforms will save consumers around £400 million a year. The CMA has been concerned about auto-renewal practices for some time. It previously took action against antivirus software providers over their auto-renewal practices, and it now has direct powers to enforce the new regime under the DMCCA.

The aim is simple: leaving a subscription should be as easy as joining one, and consumers should not be charged for something they did not knowingly agree to continue.

Which contracts are caught?

The regime applies to most paid contracts between a business and a consumer for goods, services or digital content that renew automatically or continue for an indefinite period. This includes contracts that start with a free or discounted trial and then move to a paid subscription. Certain charitable memberships are excluded.

What is changing?

• Clearer information before sign-up. Businesses must give consumers key information about the subscription before they commit, including the price, how often they will be charged, how renewal works and how to cancel.
• Reminder notices. Businesses must remind consumers before a free or discounted trial ends and before the contract renews. Notices must be in writing in a clear and accessible format, and their purpose must be immediately clear. A reminder buried in a marketing email is unlikely to be enough.
• New cooling-off period. Consumers already enjoy a 14-day cooling-off period when they first sign up. Under the new rules, they will also have a further 14-day cooling-off period after a trial ends or after a contract lasting more than 12 months automatically renews.
• Easy exit. Consumers must be able to cancel at any time through a straightforward process. If they can sign up online, they must be able to cancel online. Terms or practices that make cancellation unnecessarily difficult will be prohibited.
• Refunds for cancelled services will generally be proportionate to the service received, and must be paid within 14 days using the original payment method unless agreed otherwise.
• Consequences of getting it wrong. If a business fails to send a required notice and the consumer is charged as a result, the consumer is presumed to be entitled to a full refund of the payments affected.

These new rules have teeth

The CMA has shown that it is willing to use the direct enforcement powers it gained under the DMCCA. It can investigate and fine businesses without going to court, imposing a penalty of up to £300,000 or 10% of a trader’s annual worldwide turnover, whichever is higher. It can also order changes to business practices and require consumer redress.

Subscriptions are already on the radar of the CMA:

• In July 2026, the CMA opened an investigation into whether Microsoft 365 customers had been given clear information about their options before being moved to a higher-priced plan upon renewal.
• The CMA is also investigating Adobe to determine whether its early termination fee constitutes an unfair term in consumer contracts and whether the way it is presented amounts to a misleading omission.

The CMA has not reached any conclusions in these cases, but they shows how closely it is watching renewal practices, even before the new regime with stricter rules starts.

The CMA has already used its new DMCCA enforcement powers to impose substantial fines, including £4.2 million on the owner of AA and BSM Driving Schools and £889,200 on StubHub UK for drip pricing, as well as £720,000 on Marks Electrical for automatically opting customers into paid extras. We expect it to apply the same vigour when enforcing the new subscription rules.

If your business offers subscription services, now is the time to get ready for 1 January 2027 when the new rules come into force.

Will this be the end of subscription traps?

Not necessarily. Many subscriptions are provided by overseas companies. Some may simply be unaware of the new UK rules and, in any event, enforcing those rules against businesses based outside the UK can be difficult.

Although the new rules apply to overseas providers that target UK consumers, a provider with no UK establishment, assets or meaningful commercial presence may be harder to investigate, serve with documents, compel to provide information or pursue for payment of a penalty. The CMA can cooperate with overseas regulators, but the practical outcome may depend on the provider’s location, the assistance available there and whether it has assets or intermediaries within reach.

The reforms should therefore make subscription traps considerably riskier for legitimate businesses serving the UK, including major international platforms. They are less likely to eliminate traps operated from jurisdictions where enforcement is difficult. Consumers will still need to take care when buying from unfamiliar overseas providers, while payment providers and online platforms may remain important practical points of leverage.

Get in touch

If you would like us to review your subscription terms and customer journeys against the new DMCCA rules on subscriptions, drip pricing or customer reviews, get in touch with our team today.