With major reforms to consumer subscription contracts on the horizon under the Digital Markets, Competition and Consumers Act 2024 (DMCCA), businesses must prepare to adapt their processes and documentation to meet the new requirements ahead of the expected implementation in Autumn 2026.
A subscription contract means a contract that auto-renews or a contract with a free trial/reduced price after which it renews at a higher price. It also means a contract for an indefinite period under which the consumer has recurring payment liabilities and a right to terminate.
There have been ongoing vocal concerns about “subscription traps” whereby consumers find themselves tied into subscription contracts unwittingly due to uncertain and complicated terms & conditions.
The DMCCA is intended to address these concerns (among other things). Our previous article (see below) provides an overview of the key changes being introduced by the DMCCA. In this article, we set out what further information we are expecting relating to the key requirements and what businesses should be doing now.
We are still waiting for the final details about the new rules on subscription contracts which were originally due to come into force in Spring 2026, but are now expected in Autumn 2026.
- Applicable Contracts
The new rules will capture most auto-renewing consumer subscription contracts for goods, services and/or digital content which renew for a fixed or indefinite period and give the consumer the right to cancel, in exchange for payment. There is a list of excluded contracts set out in Schedule 22 (i.e., consisting of contracts subject to sectoral regulation such as telecoms). We may see further categories added to the list.
- New pre-contract information requirements
The new rules require information to be given to consumers about subscription contracts although it is expected that guidance will be released to clarify these requirements, as well as the way that information about delivery restrictions and acceptable payment methods must be communicated.
- Reminder notices
Businesses will be required to issue reminders about upcoming renewals within a reasonable period before that window:
- In the case of monthly subscriptions, a reminder notice will need be given every 6 months.
- In the case of subscriptions that auto-renew every 12 months, two reminder notices will need to be given before the first renewal and every renewal thereafter.
These notices must include the information set out in Part 3 of Schedule 23, which must be given all together and must be provided in a “reasonable period” in advance of the date on which the consumer becomes liable for the renewal payment.
Further information as to how these notices must be given is due to be set out in secondary legislation and further guidance is expected with examples of what is and what is not acceptable.
- Cooling-off rights and notices
It is expected that secondary legislation will set out further details on the consequences of consumers exercising their cooling-off rights and the circumstances in which the cooling-off period may be extended. Further guidance is expected also to accompany these to ensure that businesses are aware of what they need to do to comply.
5. Easy exit requirements
The DMCCA requires subscription contracts to include for straightforward provisions for consumers to terminate/cancel the contract. The DMCCA is light in detail on the way the cancellation provisions will work, and so substantial detail is expected to come from secondary legislation and guidance to cover how these rights will work in practice, for example how and when cancellation rights may be exercised.
What Should Businesses Be Doing Now?
First, businesses should familiarise themselves with the new requirements to assess whether their contracts will fall within the scope of the new legislation. If this is the case, then it is likely that some or all of the following will be needed at some point to prepare for the changes:
- Review and update your subscription terms and conditions.
- Make customer journeys easier by ensuring pre-contractual information, and sign-up and cancellation processes are easy for customers to access and understand.
- Implement systems for automated renewal reminders and tracking cooling-off periods.
- Staff training.
As we await the final secondary legislation and guidance, businesses should continue to monitor developments closely.
The DMCCA’s subscription contract regime represents a significant shift in consumer protection, and early preparation will be key to ensuring compliance and avoiding regulatory scrutiny.
If you have any questions about how the new rules may impact your business or would like advice and assistance with your subscription contracts (whether with business customers or consumers), please contact FSP’s Commercial, IP & Technology Team at: [email protected].
