Click to cancel: The UK's new subscription contract regime

Alert

16 April 2026

10 min read

The UK Government has published its plans for implementing the new subscription contracts regime established under the Digital Markets, Competition and Consumers Act 2024 (DMCCA). The new regime will introduce "cooling-off" periods at the end of free trials and upon auto-renewal, alongside new obligations designed to make it "straightforward" for consumers to cancel unwanted subscriptions.

With implementation targeted for Spring 2027, businesses are strongly recommended to begin their compliance planning now.

Key takeaways

The Digital Markets, Competition and Consumers Act (DMCCA) – which came into force in 2025 – introduced significant new requirements designed to ensure that consumers have clarity and control over their subscriptions.
The UK government has now set out its plans for the secondary legislation to implement certain consumer protection provisions of the new regime. This follows a consultation process in which it considered industry responses and made a number of targeted amendments to its original proposals.
The new UK subscription contract regime will have a significant impact on businesses operating subscription models, introducing requirements to provide cooling-off periods, clear pre-contractual information and regular reminder notices, as well as obligations to make cancellation straightforward and to offer online cancellation where the consumer signed up online.
Consequences of non-compliance are severe: businesses that fail to meet the new requirements risk fines of up to 10% of their group worldwide annual turnover.
Given the breadth of operational and contractual changes required, the significance of the potential penalties and the Spring 2027 implementation target, businesses should begin their compliance preparations now.
The CMA is likely to aggressively use these new powers, as part of its focus on greater enforcement of consumer protection rules. Indeed, in April 2026, the CMA imposed financial penalties for the first time – of GBP 4.2 million – for the use of "drip pricing" which was another common feature in consumer-facing business which was outlawed under the DMCCA.¹

How did we get here?

The Digital Markets, Competition and Consumers Act 2024 (DMCCA) introduced new rules governing subscription contracts but left the details to be introduced under secondary legislation. The UK Government undertook a consultation concerning the implementation of the new subscription contracts regime. On 2 April 2026, following more than a year since the closure of its consultation, the UK Government published its response ("Response") and set out its plans for secondary legislation.

Whilst the UK Government recognises that subscription-based models can bring benefits to both businesses and consumers, it considers that it is easy for consumers to become tied to subscriptions that they do not want, or to keep paying for ones that they no longer need or that no longer reflect their means. The UK Government estimates that £1.6 billion a year is spent by consumers on unwanted subscriptions.

Who is caught by the regime?

The DMCCA captures any agreement between a trader and a consumer that provides for an automatically recurring or continuous supply of goods, services or digital content for either an indefinite or fixed period. Examples include:

a rolling monthly subscription continuing for an indefinite period;
a fixed-term subscription (for example, six months) that auto-renews at the end of each period unless the consumer takes active steps to cancel; and
a free trial arrangement, where the contract begins with a free trial period, but the consumer is automatically charged if they do not cancel before the trial ends.

Any trader offering subscription services to UK consumers will fall within the scope of the regime irrespective of where that trader is located or established.

The DMCCA sets out a list of excluded contracts, including those falling within the following categories:

regulated activities (covered by separate regulatory regimes) – including utilities, financial services, certain healthcare and medical contracts, contracts for the supply of services regulated by Ofcom, certain gambling contracts and participation in the National Lottery;
accommodation and travel – including residential accommodation and rental contracts, leisure activities, and package holiday and package travel contracts; and
education and charitable purposes – including contracts for the supply of childcare and school-age education, and charitable subscriptions that qualify for Gift Aid.

The Response confirms that the UK Government will also expand the list of excluded contracts by legislating to exclude additional categories of charitable memberships. This will exclude contracts that are between a charity and a consumer and which allow consumers to attend performances, view collections or visit places that are related to the charity's charitable purpose.

Key aspects of the new regime

The Response covers the following key aspects of the new regime.

Cooling-off periods

Existing consumer protection laws already provide consumers with a 14-day "initial" cooling off period after buying goods and services (with some exceptions), in which they can cancel a contract and get a full or partial refund. The new rules will introduce "renewal" cooling off periods of 14 days after a "free trial" or when a subscription contract of a year or more auto-renews.
If a trader is in breach of the requirement to inform a consumer about their cooling-off rights, the cooling-off period extends to 14 days after the trader corrects its breach, up to a maximum of 12 months.

Information to consumers

Cooling-off notices must be given in writing on a durable medium,² the purpose of the notice must be immediately apparent to the consumer, and the notice must include information about the costs for the consumer of returning (returnable) goods after exercising a renewal cooling-off right.
Reminder notices (before auto-renewal) must be given to consumers in writing on a durable medium and the purpose of the notice must be immediately apparent to the consumer.
The purpose of an end-of-contract notice must be immediately apparent to the consumer, and the prescribed information must be given in a way that is more prominent than any other information given at the same time.
Information in the reminder and end-of-contract notices does not need to be given upfront such that it is the first thing the consumer sees.

Refunds

Digital content: where a consumer signs up for a contract (e.g. streaming services), once the consumer has given express consent for supply to start and waived the "initial" cooling-off right, the consumer loses the statutory right to cancel when the supply starts. However, the consumer will still benefit from the "renewal" cooling-off right 14 days after a free trial or after a subscription contract of a year or more auto-renews and will receive a proportionate refund if they cancelled then. The UK Government was not persuaded that there is a substantial risk of "binge and cancel" after a trial or a 12 month+ contract auto-renew and considered that consumer protection should take precedence.
Goods: where goods are returnable (e.g. a book), consumers will receive a refund, including standard delivery costs, upon returning the goods following cancellation. Where goods are sealed for health or hygiene reasons and become unsealed, or become inseparably mixed with other goods after delivery, the trader may reduce the refund to account for those unreturnable goods. Where goods are perishable or bespoke, consumers will receive a full refund if they cancel before supply; if they cancel after supply, the trader may reduce the refund by the value of those goods, including all delivery costs.
Services: consumers will receive a full refund where the cancellation is made before the service has begun; proportionate refund (as a percentage of the full price) where the cancellation occurs after the service has begun or while it is ongoing (for example, during a renewal cooling-off period).
Refund payments need to be made without undue delay and within 14 days after cancellation (or 14 days after receiving returnable goods sold) to the same method of payment, unless agreed otherwise.

Easy exit

Consumers must be able to exit their contracts in a "straightforward way" without unnecessary hurdles. Traders may make offers or seek feedback, but this activity must not frustrate or unreasonably elongate the process of exiting contracts. If a consumer can sign up online, they must be able to exit online.
The UK Government proposes to issue guidance on terms such as "online" and "straightforward", and what would be considered reasonable practice for making offers or seeking feedback.

Contract terms designed to circumvent the rules

The Response comments that sometimes traders include terms in their contracts that can create confusion concerning when a consumer can cancel their auto-renewal. The UK Government proposes to legislate to prohibit contractual terms which:
- have the purpose or effect of making it disproportionately difficult for consumers to cancel auto-renewal (e.g. by stipulating that a consumer can only cancel the auto-renewal between 30 and 60 days before renewal); or
- make consumers liable for payment before a rolling contract actually renews onto a new contract period.

Cancelation remedies

The DMCCA sets out that consumers have the right to cancel their subscription contract where a trader breaches certain duties, e.g. by failing to send a required reminder.
The UK Government will legislate so that, where a consumer has become liable for one payment as a result of a breach of an implied term, the consumer is presumed to be entitled to a refund of all payments made from when that breach is operational until the consumer cancels the contract.
The UK Government will also include in legislation a list of specific acts or omissions that constitute breaches of implied terms, for which a consumer will not need to prove that they suffered a financial loss in order to access a refund.

Penalties

Breaches of the new rules on subscription contracts will be subject to the direct enforcement powers of the Competition and Markets Authority, including fines of up to 10% of group worldwide annual turnover, and redress orders (e.g. an order to contact all affected consumers offering them a right to cancel with a full refund).

Next steps

The new legislation is to be enacted by a statutory instrument "when parliamentary time allows", with a view to coming into force from Spring 2027. Guidance "to support business implementation" will also be published (such as on the concept of "easy exit", as mentioned above).

Action items

The recent first financial penalty imposed by the CMA for breaches of consumer law shows that the CMA is serious about infringements of consumer protection law. Companies should take note and ensure that their practices are compliant with the DMCCA. Businesses should consider taking early preparatory steps that include:

Identifying all subscription contracts in scope. Businesses should carry out a comprehensive mapping exercise to identify every subscription contract entered into with consumers, whether for goods, services or digital content. This should include considering how frequently those contracts renew automatically, whether the renewal is on a rolling or fixed-term basis and whether the new legislative requirements will apply.
Reviewing current subscription practices. Where contracts are caught by the new regime, businesses should conduct a thorough review of their existing subscription practices to identify any gaps in compliance. There will be a need to review cancellation and renewal processes, contract terms as well as systems for information notices.
Training and adjustment of processes. The new requirements will necessitate changes across multiple functions, including webpage design, checkout processes, and consumer communications. Businesses should identify the teams responsible for each of these areas, ensure they are aware of the incoming changes and the expected implementation deadlines, and coordinate a cross-functional compliance effort to address any gaps identified.
Monitoring and reviewing further UK Government guidance. The UK Government is expected to publish additional guidance on the implementation of the new regime. Businesses should monitor this guidance closely when it is released and be prepared to assess whether any further adjustments to their practices or contractual terms are required in light of it.

_{1 See}_{CMA orders the AA and BSM driving schools to refund learner drivers over drip pricing - GOV.UK}_{2 "Durable medium" is defined in section 280(1) of the Digital Markets, Competition and Consumers Act 2024 as paper or email, or any other medium that: (a) allows information to be addressed personally to the recipient; (b) enables the recipient to store the information in a way that is accessible for future reference for a period of time adequate for the purposes of the information; and (c) allows the unchanged reproduction of the information stored. SMS text messages are not expressly listed but are generally considered capable of satisfying this definition, provided the message is addressed personally to the recipient, is capable of being stored and retrieved by the recipient, and its content is reproduced without alteration. However, businesses relying on SMS should retain evidence of delivery.}

_{White & Case means the international legal practice comprising White & Case LLP, a New York State registered limited liability partnership, White & Case LLP, a limited liability partnership incorporated under English law and all other affiliated partnerships, companies and entities.}

_{This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.}