Last updated: 8 September 2026
The Act also introduced a comprehensive new regime for subscription contracts with consumers. However, this was put on hold to allow time for the necessary secondary legislation and government guidance to be finalised. Now, the new regime is on the way: the government has confirmed the new subscription contract rules will come into force in January 2027. Subscription businesses should get up to speed quickly and put in place practices and procedures to become compliant before the launch date. This guide gives an overview of the new rules.
Inside:
- What is a subscription contract?
- Pre-contract information
- Reminder notices
- Ending the contract
- Implied terms
- Cooling-off rights
- Refund rights
- What happens if I don't comply?
- What should I do now?
What is a subscription contract?
Broadly speaking, the DMCC Act defines an in-scope subscription contract as:
- a contract between a trader and a consumer;
- for the supply of goods, services or digital content by the trader to the consumer;
- in exchange for payment by the consumer;
- which will renew automatically and result in the consumer being charged automatically;
- unless the consumer takes action to cancel it; and
- which is not an excluded contract.
The Act lists the contracts that are excluded from this definition, including contracts for the supply of utilities, financial services, certain healthcare and medical contracts, contracts for the supply of services regulated by Ofcom (such as mobile and broadband contracts), residential accommodation rental contracts, leisure activities on a specific date, package holiday and package travel contracts, and contracts for the supply of childcare and school age education. The government has confirmed the exclusion of certain charitable memberships from the subscription regime. Broadly, this covers contracts between a charity and a consumer that allow consumers to attend performances, see collections or visit places (for example, museums, galleries, historical properties, landscapes, wildlife or performing arts) related to the charity’s charitable purpose. Although these contracts fall outside the scope of the Act, they remain subject to the existing rules set out in the CCRs to the extent they are not also excluded from those Regulations.
Pre-contract information
Where a trader enters into a subscription contract, it must give the consumer “key pre-contract information” and give or make available “full pre-contract information”.
Key pre-contract information includes information about the contract's auto-renewal mechanism, the charges that apply after any initial trial period, the amount and frequency of payments, and details of how the consumer can terminate the contract. The key pre-contract information must be provided:
- as close in time to entering into the contract as possible;
- separately from the full pre-contract information and other information (so that it is not obscured);
- in writing (unless the contract is concluded orally and remotely); and
- so that the consumer does not have to take any steps to read the information, such as clicking on links or downloading separate documents, other than the steps needed to enter into the contract itself.
Reminder notices
The Act sets out detailed requirements for giving reminder notices about upcoming renewal payments. The rules provide broadly that, for monthly contracts, a reminder must be given every six months, and, for annual contracts, two reminders must be given towards the end of the term.
Originally, the draft legislation was very prescriptive about the exact timing of these reminder notices (3-5 days and 10-14 days before renewal), but the final version gives traders some discretion in determining how long the reminder notice must be given before the last opportunity for the consumer to cancel. The timeframes determined by the trader must be reasonable to ensure the consumer is aware of their liability and has an appropriate opportunity to consider whether to end the subscription. The relevant timeframes must also be specified in the pre-contractual information provided by the trader when the contract was entered into, and the trader is required to comply with those timeframes. Although traders are now responsible for setting reasonable timeframes, the original timeframes set out in the draft legislation give a good indication of what might be expected.
The renewal information must be more prominent than any other information (such as marketing) given at the same time, but it need not be entirely separate.
Ending the contract
A trader must facilitate the consumer ending the subscription contract in a “straightforward way” and without having to take any unreasonable steps. The legislation does not prevent traders from engaging with their subscribers during the exit process and e.g. making counteroffers to persuade them to stay. However, if traders take this approach, they need to ensure they are not straying into “dark patterns” territory, by “nudging” consumers to keep a subscription they want to cancel.
Traders must also acknowledge the cancellation request and refund any overpayments. That notice must be given in writing, on a durable medium, and set out when the contract was cancelled or will come to an end. Unless other regulations apply, it must be provided within three working days after the day on which the consumer gives notice of cancellation or, where the consumer gives notice online, within 24 hours of cancellation.
Where the subscription contract is entered into online, the trader must also allow termination online. Instructions for terminating the subscription must also be provided online in one or more places that a consumer is likely to find them. However, a consumer can, in any case, use another method to end the contract (such as sending an email), as long as it is a clear statement setting out their decision to bring the contract to an end.
Implied terms
The trader's duties to provide pre-contract information and reminder notices and aid easy termination become implied terms in every subscription contract. If they are breached, the consumer may cancel the contract without penalty.
Cooling-off rights
A consumer can cancel a subscription contract, without any penalty, during the initial cooling-off period and any renewal cooling-off period.
The initial cooling-off period starts on the day the contract is entered into, and ends:
- for subscription contracts involving the supply of goods, at the end of the period of 14 days starting on the day after the day on which the consumer first receives goods;
- for other contracts, at the end of the period of 14 days starting on the day after the day on which the contract is entered into.
Cooling-off rights are more onerous for traders under the Act than they are under the CCRs, because the Act applies to all subscription contracts that are in scope. So, whereas the CCRs only provide cooling-off rights in relation to distance contracts and off-premises contracts, under the new rules consumers will benefit from cooling-off rights even where they sign up to a subscription contract in store.
For off-premises contracts, if traders do not provide the pre-contract information about the initial cooling-off period, they are committing a criminal offence. Company officers can be liable if it happens with their consent or connivance or due to their neglect.
The renewal cooling-off period starts on the day on which a "relevant renewal" takes place and ends 14 days after the day when the renewal took place. A relevant renewal is when a consumer:
- first becomes liable for a renewal payment after a free-trial or reduced-price trial period; or
- becomes liable for a renewal payment and the next payment is not due for 12 months or more (e.g., an annual subscription where the consumer pays once a year); or
- becomes liable for a renewal payment and no further payments are due, but the contract continues for 12 months or more.
The rules on initial cooling-off refunds are designed to be consistent with the CCRs. For digital content, the existing waiver mechanism is retained for the initial cooling-off period: if the consumer expressly consents to supply starting during the initial cooling-off period and acknowledges that they lose their cancellation right, the waiver applies. For the renewal cooling-off period, consumers will have 14 days to cancel a contract for digital content and receive a full or proportionate refund. This essentially aligns digital content with services on renewal and aims to make sure that consumers are not out of pocket if they miss the auto-renewal date, with proportionate refunds allowing businesses to be compensated for the proportion of the contract supplied.
Refund rights
Goods. Where returnable goods are returned after cancellation, the consumer receives a refund, including standard delivery costs. For perishable or bespoke goods, the consumer receives a full refund if they cancel before the goods are supplied; if they cancel after supply, the trader may reduce the refund by the cost of those goods. The trader may also reduce the refund for sealed goods (for health or hygiene reasons) that are unsealed after delivery, or goods that become inseparably mixed with other goods.
Services. If supply has not begun, the consumer receives a full refund. If supply has begun (after obtaining the consumer’s express request to start the supply during the cooling-off period) or is ongoing, the refund is proportionate, calculated by reference to the total contract price and the proportion of the contract performed.
Digital content. The initial cooling-off waiver described above applies. If the consumer cancels during a renewal cooling-off period, they receive a proportionate refund calculated in the same way as for services.
Mixed contracts. Where a contract combines goods, services and digital content, the relevant refund rules apply separately to each component.
A trader must tell a consumer about each renewal cooling-off period. The notice must state, among other things, that the contract is continuing, and the consumer has a right to cancel it during the renewal cooling-off period. It must be given on the first day of the renewal cooling-off period or as soon as reasonably practicable afterwards and must be provided separately from other information.
The Act takes into account that people may subscribe to services from overseas and states that the rules apply to overseas contracts if they have a close connection to the UK.
What happens if I don’t comply?
The Act introduced much wider-ranging enforcement powers for the CMA, which can issue GDPR-style fines without going to court first, as well as ordering redress and compliance measures. More information is available here.
As well as the new subscriptions rules, the CMA can also take action under the other provisions of the DMCC Act and is currently investigating concerns that certain software customers may not have been given clear, upfront information about their subscription options at renewal, particularly where free access to new features had previously been given to the customer.
The CMA is examining what information customers were given about their options as their subscription came to an end, and before they were automatically rolled onto a higher-priced plan that included the additional features. The CMA is looking into whether communications with customers before renewal were misleading and/or an aggressive practice, and its investigation will examine whether customers were given the important information they needed, including the difference in cost, to understand the options available to them before making a decision.
What should I do now?
Traders should be reviewing their terms and conditions, customer journeys and staff training now. With the new rules currently set to land in January 2027, there is very limited time to prepare, so businesses should put in place the practices and procedures needed to comply before the rules take effect.
