Do your subscriptions comply with the new 2027 rules? What businesses need to know now

The new regime forms part of the Digital Markets, Competition and Consumers Act 2024 and introduces additional protections for consumers who enter into subscription contracts. 

The government's aim is to tackle common issues associated with subscription models, including customers forgetting about renewals, becoming tied into unwanted subscriptions, or struggling to cancel contracts. 

Research cited by the government found that millions of unwanted subscription contracts remain active and that consumers spend significant sums each year on subscriptions they no longer want. 

Among the measures businesses should be aware of are:

• Clearer information before customers sign up
• Reminder notices before key renewal points
• Straightforward cancellation processes
• Online cancellation where customers originally signed up online
• Cooling-off periods in certain circumstances, including after some trial periods and renewals. 

While further guidance may be published before implementation, the direction of travel is now much clearer, and you can begin assessing your customer journeys.

You may wish to pay particular attention to the new rules if your business offers:

• Software or SaaS subscriptions  
• Membership schemes
• Subscription boxes
• Online learning platforms
• Recurring service contracts
• Digital content subscriptions
• Gym or leisure memberships
• Automatically renewing customer agreements

Businesses that only sell products or services on a one-off basis are less likely to be affected.

A note on business customers

The new subscription contract rules are intended to strengthen protections for consumers. If you only provide subscriptions to other businesses, the new regime is less likely to apply.

However, if you provide subscriptions or memberships to individual consumers, it may be worth reviewing your arrangements ahead of implementation.

Example: A gym membership

A local gym offers monthly memberships that renew automatically unless cancelled.

The business may want to review:

• How membership terms are presented when customers sign up
• Reminder notices before key renewal points
• Whether members can easily manage or cancel their membership online
• Communications sent when free trials or promotional offers end

Example: A SaaS provider

A software company offers customers a discounted introductory rate for the first three months before moving onto its standard subscription price.

The business may wish to review:

• How pricing changes are communicated
• Whether reminder notices are sufficiently clear
• Customer account settings
• Subscription management and cancellation journeys

Example: An online learning platform

An online training provider offers access to courses through a monthly subscription. New customers receive a reduced introductory rate for the first month before moving onto the standard subscription price.

The business may wish to review:

• How introductory offers and future pricing are explained
• Reminder communications before promotional rates end
• Whether customers can easily manage their subscription online
• How simple it is to find cancellation options
• Whether key subscription information stands out from marketing emails

The new rules are designed to improve transparency and make it easier for consumers to manage subscription contracts.

Many businesses already provide clear subscription information, straightforward cancellation processes and helpful reminders because they see these as part of delivering a good customer experience. If this sounds familiar, you may find that preparing for the new rules is more about validating existing processes than making major changes.

However, it is still worth carrying out a formal review to ensure your processes align with the final requirements.

Beyond meeting compliance requirements, taking the opportunity to review your processes can benefit your business in a few important ways: 

• Build customer trust
• Reduce complaints and disputes, and the time taken to manage them
• Minimise refund requests and chargebacks
• Encourage long-term customer relationships
• Protect online reviews and reputation

Customers are often more positive about subscription services when they understand exactly what they are signing up to, know when payments will be taken and can easily manage their account if their circumstances change.

Even where a business has technically complied with the rules, unexpected renewals, unclear terms or difficult cancellation processes can lead to complaints and negative reviews. Taking steps to improve your customer experience now could help avoid these issues in future.

A customer should be able to:

• Understand what they are signing up to
• See when payments will be taken
• Understand when a trial or discount period ends
• Identify important subscription communications
• Access cancellation information easily
• Cancel using a straightforward process

If any of these stages feel difficult or unclear, they may be worth reviewing before January 2027.

Many businesses already send renewal reminders, but effectiveness matters just as much as compliance.

Customers often receive large volumes of emails, making important subscription notices easy to miss. A reminder that gets lost among newsletters, promotions and product updates may not achieve its intended purpose.

When reviewing communications, you may wish to consider whether:

• Subject lines clearly identify the email as a subscription or renewal notice

• Reminder emails are distinguishable from marketing communications

• Key dates, charges and renewal terms are clearly explained

• Customers are told what action they need to take, if any

• Links to manage or cancel subscriptions are easy to find

• Additional reminders may be appropriate for higher-value or annual subscriptions

A well-designed reminder process can help reduce misunderstandings, improve customer trust and minimise complaints about unexpected renewals.

Some common mistakes include:

• Assuming the rules only apply to larger organisations

• Focusing solely on terms and conditions rather than the customer journey

• Making cancellation harder than sign-up

• Hiding subscription information within marketing communications

• Leaving system changes until late 2026

• Overlooking third-party subscription or membership platforms

Even where a business is technically compliant, poor customer experiences can still lead to complaints and negative feedback.