DMCCA 2024: new subscription rules coming into force in January 2027

The Digital Markets, Competition and Consumers Act 2024 (“DMCCA”) introduces significant new obligations for traders offering subscription-based products and services to consumers. The new regime is designed to give consumers greater control over subscriptions and make it easier to stop subscription contracts.

The new subscription contracts rules are now expected to come into force in January 2027, earlier than the previously anticipated deadline of spring 2027. The DMCCA establishes the framework for the new regime, but some of the detailed operational requirements will be set out in secondary legislation and supporting guidance. Traders should therefore monitor the final implementing legislation and guidance as well as beginning their compliance preparations now.

Traders that offer consumers subscription-based products or services will need to review their subscription contracts alongside end-to-end customer journeys to ensure that their systems and processes are compliant with the new rules before January 2027. The new regime will affect not only subscription terms and conditions but the subscription sales process, including sign-up processes, renewals, cancellation mechanisms and refund procedures.

Key takeaways

Which subscription contracts will be affected?

The new regime broadly applies to subscription contracts between traders and consumers for the supply of goods, services or digital content where the consumer is required to make recurring payments, including subscriptions which automatically renew as well as arrangements where a free or discounted period automatically converts into a paid subscription.

The new regime applies to any “trader”. This is a broad term in the DMCCA 2024 which covers businesses and those acting on their behalf, such as agents, sub-contractors and representatives. The definition of “business” is also broad and includes a trade, craft or profession, as well as any other undertaking carried on for gain or reward.

Traders who offer consumers Software as a Service (SaaS) and digital platforms are likely to be among those particularly affected, alongside others which offer consumers products or services with monthly or annual renewals, free trial periods or introductory pricing, and membership-based offerings such as gyms, clubs, media/content subscriptions and loyalty schemes.

Certain contracts are excluded from the new rules in sectors such as financial services, regulated utilities, electronic communications and healthcare, as well as certain other specified contracts.

What will traders need to do?

Traders operating subscription contracts within scope of the new rules will need to take action to ensure that they are compliant before the January 2027 deadline. We set out the key points which traders should be aware of below.

Provide clear information before a subscription commences

The DMCCA introduces enhanced pre-contract information requirements.

Traders must give clear, prominent and comprehensive information before a consumer agrees to a subscription contract, including key details such as:

• total price (or how it will be calculated);
• billing frequency;
• auto-renewal terms;
• minimum commitment periods; and
• cancellation rights.

For online subscriptions, traders must also ensure that consumers clearly acknowledge that entering into the contract will create an obligation to make payments.

Pre-contract information must be provided legibly, and in clear, plain language. If the full pre-contract information is not provided in a durable medium (such as email or downloadable documents) before the contract is concluded, it must be provided in this format as soon as reasonably practicable afterwards.

Simply making information available on a website will not generally be sufficient where the consumer is expected to save or print the information themselves. Traders should review their websites, apps and sign-up processes to ensure that required pre-contract information is provided clearly, and is not hidden away in their terms and conditions.

Send renewal reminder notices to consumers

The DMCCA introduces new requirements for traders to send customers advance notice before certain subscription payments are automatically renewed, so that customers have a clear opportunity to cancel before being charged.

The notice must include prescribed details, such as the date of renewal, the amount that will be charged on renewal, confirmation that payment will be taken unless the subscription is cancelled, and any increase compared to previous renewal prices.

Reminders will be required at prescribed intervals and must be sent sufficiently in advance of the payment date:

• Monthly or more frequent payments: reminders will generally be required every 6 months.
• Annual payments: a reminder must be sent before the annual renewal payment.
• Free or discounted introductory periods: an additional reminder is required before the first payment date following the end of the free or discounted period. The regime is designed to stop consumers from being subject to rollover traps.
• Long renewal periods: additional reminder requirements can apply where the next renewal payment is 12 months or more away. For example, if a customer pays for an 18-month subscription and the next payment will not be taken for another 18 months, traders may need to send an additional reminder during that period.

Traders should ensure that their systems can identify when reminders are required and send required reminders automatically.

New cooling-off rights

Initial cooling-off period

The new rules provide consumers with an initial 14-day cooling-off period in relation to subscription contracts, subject to additional rules which may apply to particular types of contracts under the DMCCA.

Where a consumer exercises their cooling-off right, the refund they receive will depend on the circumstances, including the type of subscription and whether any goods, services or digital content have already been supplied. Broadly:

• Services: if the service has not started, the consumer should get a full refund. If it has started, the refund can be reduced to reflect the part of the service already supplied.
• Goods: generally, the consumer must return the goods to receive a refund. Exceptions apply where goods cannot reasonably be returned, such as perishable, bespoke or opened sealed goods, in which case the refund may be reduced.
• Digital content: the consumer may receive a proportional refund for digital content already supplied, subject to the specific rules governing digital content. If the consumer has expressly agreed to the digital content being supplied immediately and acknowledged that they would lose their initial cooling-off right, that right can be waived.
• Mixed subscriptions: where a subscription includes both goods and services, the refund rules can apply separately to each component.

Renewal cooling-off period

The DMCCA 2024 provides for a further 14-day cooling-off period following a ‘relevant renewal’. A renewal is where:

• the consumer becomes liable for their first renewal payment following the end of a free trial or discounted period;
• the consumer becomes liable for a renewal payment and the next renewal payment will not become due until after the end of the following 12-month period; or
• there will be no further renewal payments, but the subscription continues beyond a 12-month period.

Traders must notify the consumer of this renewal cooling-off right on the day of the relevant renewal or as soon as reasonably practicable afterwards. Where the consumer exercises the renewal cooling-off right, the applicable refund will be determined in the same fashion as under the initial cooling-off period rules, having regard to the type of subscription and what has already been supplied.

Confirm cancellations and refunds in writing

Following the consumer’s cancellation (including by exercise of cooling-off rights), or termination of a subscription contract, traders will need to provide consumers with an end-of-contract notice confirming that the subscription has been cancelled or has come to an end.

Traders should ensure that their customer service, billing and payment systems are capable of processing cancellations and refunds within the required time frames which are, in certain cases, limited to 14 days (such as in respect of refunds due following exercise of cooling-off rights, or cancellation by the consumer for breach). Traders must send an end-of-contract notice acknowledging the cancellation within:

• 24 hours of the consumer notifying the trader, for online cancellations; and
• 3 working days beginning the day after the consumer notifies the trader, for cancellations made by any other means.

Outside the cooling-off periods, a consumer may cancel their subscription in accordance with the contractual terms, including any applicable notice period. The consumer will not generally be entitled to a refund solely as a result of cancellation where it falls outside of the cooling-off period. However, any overpayment for which the consumer is no longer liable as a result of the termination of the contract must be refunded.

What happens if traders do not comply?

Certain obligations within the new rules will be treated as implied terms of the subscription contract and will therefore form part of the relevant contract automatically, even if they are not set out as express terms. These include obligations relating to the provision of key pre-contract information, reminder notices, the timing of notices, the provision of an easy way to cancel a subscription and obligations following cancellation.

The Competition and Markets Authority (“CMA”) now has significantly stronger powers under the DMCCA. The CMA can take enforcement action against traders that breach consumer protection law, including by:

• making applications to court;
• the DMCCA’s direct enforcement regime. The CMA can now investigate suspected breaches and take enforcement action against traders without first having to obtain a court order; and
• imposing significant financial penalties of up to 10% of a trader’s global turnover.

Since the direct enforcement regime came into force in April 2025, the CMA has actively investigated traders, secured refunds for consumers and imposed millions of pounds in fines. Between April 2025 and April 2026, the CMA ordered that a total of £760,000 be refunded to consumers and imposed fines totalling £4.7 million.

Once brought into force with the rest of the rules in the subscription regime, the DMCCA will make it an offence for a trader to fail to provide information about a consumer’s initial cooling-off rights when entering into off-premises subscription contracts i.e. a subscription agreed in person somewhere other than the trader’s business premises.

Further, from a practical standpoint, consumer claims and complaints present a risk to reputation and may bring a trader under increased regulatory scrutiny.

What traders should be doing now

• Identify subscriptions which will fall within the scope of the DMCCA, including free trials, introductory discounts and automatically renewing arrangements.
• Review end-to-end customer subscription purchase journeys and contracting processes to ensure the process aligns with the new transparency and notification requirements.
• Audit pre-contract information for transparency, to ensure that the required information is provided clearly and is sufficiently prominent.
• Review renewal processes and establish how and when reminder notices will be generated.
• Review cancellation processes and ensure online subscriptions can be cancelled through an accessible online process.
• Check that third-party platforms used to process subscriptions, payments, renewals or cancellations can support the new obligations.

How JMW can help

Some of these changes may require updates to websites, apps, payment processes and notification systems, which can have significant lead times to implement, so traders should review their subscription contracts and associated systems and processes now to identify any changes needed ahead of the new requirements taking effect.

JMW can assist with reviewing your subscription contracts, customer journeys, and terms and conditions to identify any changes that may be required.