UK issues draft consumer subscription rules amidst active CMA enforcement

Businesses offering subscriptions to UK consumers should begin reviewing their customer journeys ahead of the new regime, as introduced by the Digital Markets, Competition and Consumers Act 2024 (DMCCA), coming into effect, according to experts at Pinsent Masons. The draft Consumer Subscription Contracts (Cancellation and Information) Regulations 2026 are intended to apply to contracts entered into on or after 1 January 2027, although this date is not yet confirmed and the regulations remain subject to parliamentary approval along with accompanying draft guidance.

The new regime will govern the infomation businesses must provide before consumers subscribe, the reminders and other notices they must issue, how consumers can end or cancel subscriptions, and consumers’ cooling-off, cancellation and refund rights.

As well as requiring businesses to update their terms and conditions, the new regime is likely to require changes to advertising, sign-up and checkout processes, renewal communications, account management interfaces, customer service procedures and refund systems, said commercial law expert Samantha Livesey of Pinsent Masons.

“For many businesses, implementation will require coordination between legal, commercial, digital, finance and customer service teams,” she said. “Contractual wording, checkout design, renewal communications, cancellation routes and refund processes will need to operate consistently.”

The new regime will apply to business-to-consumer subscription contracts unless a statutory exclusion applies. The draft guidance identifies exclusions covering certain contracts relating to utilities, insurance and financial services, medical prescriptions, telecommunications and specified cultural and heritage charitable memberships, among other areas. Whether an exclusion applies will depend on the nature and structure of the particular contract.

Businesses will be required to provide prescribed information before a consumer enters into an in-scope contract. The guidance distinguishes between ‘key’ and ‘full’ pre-contract information, intended to help consumers understand the subscription and their financial commitment before signing up. Key pre-contract information must be given to the consumer as close as possible to the point that the consumer commits to the contract, while full pre-contract information can either be given directly to the consumer or “made available” in a place where the consumer can reasonably be expected to know how to access it and be able to access it.

The draft regulations contain further provisions concerning reminder, cooling-off and end-of-contract notices. Reminders must be issued at specified points including following a free or reduced-price trial, before a contract automatically renews for a period of 12 months or more, and every six months for ongoing subscriptions.

Unless covered by an exception, consumers will have a 14-day initial cooling-off period when entering into an in-scope subscription contract, or, in the case of goods, 14 days from receipt of the first complete supply of goods under the contract. A further 14-day renewal cooling-off period will apply after a concessionary period or where a contract renews automatically for a period of 12 months or more.

The DMCCA requires businesses to enable consumers to end subscriptions in a straightforward way. The draft guidance addresses contractual termination rights, online and other exit arrangements, offers made during the exit process and end-of-contract notices.

Businesses should therefore begin thinking about cancellation as an operational and product design issue, as well as a contractual one, said commercial law expert Rhiannon Robinson. They should also consider whether their systems can issue all communications required by the new regime at the appropriate times, and can retain evidence that they were sent.

“Businesses should start by mapping each subscription model and customer journey against the new requirements,” she said. “Particular attention will be needed where different products, trial periods, renewal structures or methods of cancellation are offered.”

The draft regulations address how these rights will apply to different forms of supply including digital content, perishable or bespoke goods, and hired goods. They also cover returns, cost recovery, refunds, and the effect of cancellation on ancillary contracts. Consumers may acquire additional cancellation rights if the business breaches specified requirements of the regime.

Businesses supplying a mixture of goods, services and digital content should assess whether different cancellation and refund processes are needed for different products, Robinson said. The consequences of cancellation will depend on the right exercised and the nature of the supply.

For in-scope subscription contracts entered into on or after the commencement date, the new regime will replace the existing requirements relating to pre-contract information and cooling-off provisions in the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (CCRs). The CCRs will continue to apply to non-subscription consumer contracts, and subscription contracts prior to this new legal framework.

The new regime will operate alongside the wider UK consumer law framework, including the Consumer Rights Act 2015 and the DMCCA provisions prohibiting unfair commercial practices. While compliance with the new subscription rules may assist businesses in meeting wider consumer law requirements concerning auto-renewal according to the draft guidance, it does not guarantee wider compliance. The draft guidance explicitly states that it is not a substitute for the legislation and that interpretation is ultimately a matter for direct enforcers and the courts.

The new rules come as the CMA is making “increasingly active use” of its direct consumer enforcement powers under the DMCCA, according to competition and consumer law expert Angelique Bret of Pinsent Masons. Certain breaches of the new regime may constitute criminal offences, and public enforcement may result in financial penalties of up to 10% of global turnover. Earlier this month, the CMA reported that it had already imposed civil fines exceeding £11.8 million and ordered more than £2.3m in consumer redress since those powers took effect.

Most recently, the CMA announced civil fines totalling approximately £6 million against Wayfair, Appliances Direct and Gold’s Gym in cases involving false time-limited offers, automatic opt-ins and the presentation of mandatory charges. Appliances Direct and Gold's Gym were also required to provide around £440,000 in refunds to affected consumers. The businesses admitted the infringements and settled the cases.

“Although the CMA has said that it will support businesses during the early stages of the regime, it has also made clear that this does not amount to a postponement of enforcement,” Bret said.

“Businesses potentially within scope should identify their affected subscription products and assess whether any exclusions apply. They should then examine the customer journey from marketing and sign-up through to trials, payments, reminders, renewals, cancellation and refunds, covering both consumer-facing information and the technical operation of relevant systems.”

The regulations, once finalised, will operate alongside Part 4, Chapter 2 of the DMCCA to give effect to the new subscription contracts consumer law regime. Final guidance will be issued after the regulations have been made. Competition and consumer law expert Tadeusz Gielas urged businesses to take action well in advance of the intended 1 January 2027 implementation date, alongside monitoring of the parliamentary process and relevant guidance, given the extent of the contractual, technical and operational changes that may be required and the small implementation window.

“The regime adds a detailed new layer to a consumer law framework that the CMA is already actively enforcing through financial penalties and consumer redress measures,” he said. “The subscription contracts rules are the last substantive provisions of the DMCCA to come into force, in part because the government had recognised the impact the new rules may have on certain businesses.”

“It is important that businesses that use subscription models approach the new rules as part of their general consumer protection law compliance efforts, rather than simply an exercise in amending contractual terms. This should be implemented alongside wider legal compliance initiatives within the business, such as competition law compliance programmes. The CMA enforces both UK competition law and consumer protection law, and will expect businesses to have effective compliance measures for both,” he said.