Subscription contracts rules: the planned January 2027 start and what traders will have to do
In short: The government intends that a business selling subscriptions to UK consumers will have to meet the subscription contracts rules in the Digital Markets, Competition and Consumers Act 2024 for contracts made on or after 1 January 2027, although the commencement regulations have not yet been made. It must explain renewal terms before sign-up, send reminders at set points, offer cooling-off rights and provide a straightforward way to leave. Draft Regulations and guidance were published on 19 October 2026.
A consumer who signs up online for a free trial, then forgets about it, will have new protection from 2027. The trader will have to remind the consumer before the first renewal payment, give a fresh 14-day right to cancel when the trial ends, and let the consumer stop the subscription online without taking steps that are not reasonably necessary. The government’s draft guidance applies these rules to contracts made on or after 1 January 2027 (section 1), and the draft Regulations come into force on that date (regulation 1(2)). Most of the Act’s subscription provisions are not yet in force.
The Department for Business, Innovation, Science and Trade published the draft Consumer Subscription Contracts (Cancellation and Information) Regulations 2026 and its draft guidance on the subscription contracts rules on 19 October 2026. Both are drafts, and the Regulations need Parliament’s approval.
Key points
- The government estimates that UK consumers spend about £2.1 billion a year on subscriptions they do not want, an uprating to 2026 prices of the £1.6 billion estimated in 2023. Source: Impact Assessment 2026 No. 161, page 5.
- In a 2019 YouGov survey cited by the government, 47% of respondents had been rolled over from a trial to a full-price subscription because they forgot or were unable to cancel. Source: Impact Assessment 2026 No. 161, page 5.
- The government intends the rules to apply to subscription contracts made on or after 1 January 2027. Source: draft guidance, section 1; draft Regulations, regulation 1(2).
- Contracts for services of a banking, credit, insurance, personal pension, investment or payment nature are excluded, as are supplies for which the supplier is bound by an Ofcom General Condition. Source: Schedule 22 to the DMCC Act 2024, paragraphs 2 and 5.
- Once the rules are in force, the Competition and Markets Authority (CMA) will be able to fine a trader up to £300,000 or, if higher, 10% of its turnover. Source: DMCC Act 2024, section 182(6).
| Consumer harm | What the trader must do | Provision |
|---|---|---|
| Not knowing that the contract renews automatically | Give the key pre-contract information together, and separately from other information, before the consumer commits | DMCC Act 2024, section 256 and Schedule 23 |
| Forgetting a trial or a renewal | Send reminder notices at set points before renewal payments, including before the first renewal payment after a trial | Sections 258 and 259; draft Regulations, regulation 33 |
| Being held to a long renewal | Allow the consumer to cancel within a 14-day renewal cooling-off period | Sections 264 to 266 |
| Finding it hard to leave | Provide a straightforward exit route, online where the contract was made online | Section 260 |
| Paying to cancel | Impose no penalty or charge for cancelling in a cooling-off period | Section 264(7) |
The consumer harm behind the subscription rules
The government is legislating against subscriptions that consumers keep paying for only because they have not acted. In paragraph 5.2 of the draft Explanatory Memorandum, the department lists four harms: consumers who do not realise that a contract renews automatically, trials that roll onto higher-cost terms, long-term contracts that renew without the consumer noticing, and traders who make it hard to leave. In the Impact Assessment (page 5), the department attributes these harms to information failures, behavioural biases and business incentives that reward inertia.
A 2023 study cited by the department found that subscription retention fell by 2% in an ordinary month and by 8% in a month when the customer’s payment card was replaced, a gap the department reads as customers who wanted to cancel but had not done so (page 5). The department also cites research that passive subscribers increase firm revenue by between 14% and 200% (page 6).
Parliament enacted the framework in Chapter 2 of Part 4 of the Digital Markets, Competition and Consumers Act 2024 (DMCC Act). A contract is a subscription contract under section 254 if a trader supplies goods, services or digital content to a consumer for payment, and the contract either renews or continues automatically or begins with a free or discounted period after which the consumer pays more.
What a trader must do at sign-up, trial end and renewal
Before the consumer enters the contract, the trader must give the key pre-contract information listed in Part 1 of Schedule 23, together and separately from any other information (section 256).
During the contract, the trader must send a reminder notice before the renewal payment at the end of each six-month period, and before the first renewal payment where the contract begins with a free or discounted period (section 258). Where a discount runs over several payments, the draft Regulations move that reminder to the first payment at the higher rate (regulation 33). The trader must send each reminder within the period stated in the key pre-contract information, and that period must be reasonable (section 259(3) and (4)).
The consumer may cancel within 14 days of entering the contract, or of receiving the first goods, and again in a renewal cooling-off period after a free or discounted period ends or when the contract renews for 12 months or more (sections 264 and 265). The trader may not charge a penalty for cancellation in a cooling-off period (section 264(7)). Under regulations 5 and 6 of the draft Regulations, where a trader fails to give the consumer the required cooling-off information or notice, the cooling-off period runs on until 14 days after the trader puts the failure right, for up to 12 months. A trader cannot contract out of any of this: a term that contravenes Chapter 2 has no effect (section 273).
Leaving a subscription without unnecessary steps
The trader must enable the consumer to end the contract in a way that is straightforward, without steps that are not reasonably necessary (section 260). Where the consumer signed up online, the trader must let the consumer leave online and must display instructions where a consumer looking to leave is likely to find them. Ending the contract stops it renewing, and the consumer keeps receiving the service for the period already paid for (draft guidance, section 4.5.1). Unless regulations set a different period, the trader must confirm the exit on a durable medium, such as an email, within 24 hours for an online exit or three working days otherwise (section 261).
In its draft guidance the department describes the policy intention as “exiting should be as easy as signing up” (section 4.5.2). The department considers that a trader is more likely to comply where the consumer can leave quickly and without contacting it more than once. It does not regard an email address as a straightforward online exit route, although a consumer may still give notice by email (section 4.5.3). A trader may make a retention offer or ask for feedback, but the department says it should do so in a way that keeps the exit straightforward (section 4.5.4).
Neither the Act nor the draft guidance sets a number of clicks or screens. The test for each step in an exit journey is whether it is reasonably necessary to bring the contract to an end. Changing the exit journey usually means changing the consumer terms behind it, which is the subject of the platform terms and policies page.
Telecoms and payments contracts outside the subscription rules
Paragraph 5 of Schedule 22 excludes a contract for a supply where the supplier is bound, in relation to that supply, by a General Condition that Ofcom has set under section 45 of the Communications Act 2003. Paragraph 2 excludes contracts for services of a banking, credit, insurance, personal pension, investment or payment nature.
A broadband or mobile customer has similar protection under Condition C1 of Ofcom’s General Conditions of Entitlement. Where a contract with a commitment period renews automatically, the provider must send an end-of-contract notification before the commitment period ends (C1.23 and C1.27). After the contract renews, the customer may end it on one month’s notice, and may end contracts bundled with it on the same terms, without costs beyond the service fees for the notice period (C1.22).
In its draft guidance (section 12.1, questions 4 and 5) the department says that a single contract is excluded only if, and to the extent that, it falls within Schedule 22, and that a trader selling TV streaming with broadband must meet the requirements of each applicable regime. The department does not explain how the paragraph 5 test, which asks whether the supplier is bound by a General Condition in relation to that supply, applies to the streaming element. Until that point is settled, a communications provider that sells a streaming or other non-telecoms subscription in a bundle has to proceed on the footing that both sets of rules apply.
A subscription paid by card or direct debit is still within the rules, because the contract is for the goods, services or digital content supplied. Under regulation 67(4) of the Payment Services Regulations 2017, a payer may withdraw consent to a series of payment transactions, subject to regulation 83, so that future payments are not authorised. That right concerns the payment and says nothing about the contract with the trader. The exit right under the DMCC Act stops the contract renewing or continuing.
| Protection | Consumer subscription (DMCC Act 2024) | Broadband or mobile contract (General Condition C1) |
|---|---|---|
| Notice before renewal | Reminder notices at set points before renewal payments (sections 258 and 259) | End-of-contract notification before the commitment period ends (C1.23, C1.27) |
| Right to leave after renewal | Straightforward exit route, online for online contracts (section 260) | One month’s notice after automatic renewal (C1.22(a)) |
| Bundled contracts | Each applicable regime applies; a contract is excluded only to the extent it falls within Schedule 22 (draft guidance, section 12.1) | Right to end bundled contracts on one month’s notice (C1.22(b)) |
| Cost of leaving | No penalty or charge for cancelling in a cooling-off period (section 264(7)) | No costs beyond service fees for the notice period (C1.22(c)) |
| Public enforcement | CMA directly, or the CMA, Trading Standards and sector regulators through the courts (Part 3) | Ofcom |
How the CMA will enforce the subscription rules
Once Chapter 2 is in force, the CMA will be able to enforce it without going to court. A breach of an enactment listed in Schedule 16, which includes Chapter 2 of Part 4, is a relevant infringement if it also harms the collective interests of consumers and has a UK connection (sections 148 and 150(2)). The CMA must first give a provisional infringement notice (section 181). If it then gives a final notice, it may impose a penalty of up to £300,000 or, if higher, 10% of the trader’s turnover (section 182(6)), and the trader may appeal. Trading Standards and sector regulators may also enforce through the courts (draft guidance, section 10.2), and consumers keep their other remedies under section 274. The CMA’s approach to subscription marketing under the existing law is discussed in CMA subscription enforcement before the DMCC Act regime commences.
Viewpoint
If customers who want to leave cancel only when a replacement card forces the question, a trader earns revenue from friction. Parliament has required traders to remove that friction at each point in the life of a subscription.
In my view the exit journey is where most traders will have to change what they do. Section 260 sets one test for each step: whether it is reasonably necessary to bring the contract to an end. The department considers that a compulsory feedback form before exit is unlikely to meet that test (draft guidance, section 4.5.2).
Frequently asked questions
When do the subscription contracts rules apply?
The government intends the rules to apply to subscription contracts made on or after 1 January 2027 (draft guidance, section 1), the date on which the draft Consumer Subscription Contracts (Cancellation and Information) Regulations 2026 come into force (regulation 1(2)). The obligations are in Chapter 2 of Part 4 of the DMCC Act 2024, most of which is not yet in force. The draft Regulations need Parliament’s approval.
Can a trader make a retention offer when a consumer cancels?
Yes. Section 260 of the DMCC Act requires the exit route to be straightforward, without steps that are not reasonably necessary to end the contract. In its draft guidance (section 4.5.4) the department says that offers and feedback requests should be made in a way that keeps exit straightforward, and that feedback should not be compulsory.
Do the rules apply to broadband and mobile contracts?
Not where the provider is bound by an Ofcom General Condition in relation to the supply (Schedule 22, paragraph 5). Those customers are protected under General Condition C1, which requires an end-of-contract notification and a right to leave on one month’s notice after automatic renewal. Where a bundle includes a non-telecoms service such as streaming, the department’s draft guidance says the trader must meet the requirements of each applicable regime.
Are subscriptions paid by card excluded as payment services?
No. Schedule 22, paragraph 2, excludes contracts for services of a payment nature. A subscription to goods, services or digital content is within the rules however the consumer pays. A payer’s right under regulation 67(4) of the Payment Services Regulations 2017 to withdraw consent to future payments is separate and concerns the payment, not the subscription contract.
For advice on bringing subscription sign-up, renewal and cancellation journeys into line with the DMCC Act 2024, contact Rob Bratby at Bratby Law.
