The government has published long-awaited draft guidance on the new subscription contract regime under the Digital Markets, Competition and Consumers Act 2024, alongside the draft Consumer Subscription Contracts (Cancellation and Information) Regulations 2026.
The new rules will apply to business-to-consumer subscription contracts entered into on or after 1 January 2027 and are designed to tackle so-called "subscription traps" by making subscriptions easier to understand, easier to exit and subject to clearer cancellation rights.
The guidance provides detailed explanations of the new obligations on traders, including requirements to provide key and full pre-contract information, send reminder notices before certain renewals and trial conversions, offer straightforward cancellation mechanisms (including online cancellation where sign-up is online), and comply with new cooling-off and refund rules. It also gives practical examples of how the regime will apply to goods, services and digital content subscriptions.
Of particular interest are the sections on reminder notices, online cancellation journeys, renewal cooling-off rights and the circumstances in which consumers can cancel and obtain refunds where businesses fail to comply with certain aspects of the regime. The guidance also clarifies the scope of the regime and the categories of contracts that remain exempt, including financial services, telecoms, utilities and certain charitable memberships.
It will predominantly fall to the Competition and Markets Authority to enforce the rules, but it has clarified that in the early months of the regime, it will focus on supporting businesses to comply, although conduct during this period may still be considered as part of enforcement action. However, it says it will use its powers proportionately by focusing enforcement on more egregious conduct, particularly in areas where businesses should already be clear about their obligations under the existing law. It will consider genuine efforts to comply with the new subscription rules when deciding whether to intervene.
Some questions remain, and we'll publish a more detailed article in the coming days exploring the key compliance requirements, practical implications for subscription providers and the issues businesses should be considering now when preparing for implementation.
