DMCCA Subscription Reforms Now Set for Spring 2027

The UK Government has today published the long-awaited outcome of its consultation on the subscription-related provisions of the Digital Markets, Competition and Consumers Act 2024 (DMCCA). We previously wrote about the consultation and the various options under consideration, here. 

Secondary legislation to enact the proposals summarised below will now be prepared, and it is expected that the new regime will take effect from spring 2027 (having previously been pushed back from spring 2026 to autumn 2026).  Further guidance is also expected to support business implementation of the new requirements.   

Pre-contract information

Respondents raised concerns about the volume and presentation of pre-contract information to consumers, particularly on small screens, which the Government has said it will consider in guidance. 

Targeted legislation will address the format and clarity of reminder, cooling-off and end-of-contract notices. In particular, the purpose of each of these communications must be “immediately apparent” to the consumer, provided on a durable medium and (where appropriate) provide information to the consumer about relevant costs (e.g. for returning unwanted goods to the trader following cancellation). 

Cooling-off rights: returns and refunds

The DMCCA provides consumers with two 14-day periods during which they can cancel a subscription contract without penalty: 

1. An “initial cooling-off period”, immediately after they enter the contract; and
2. A “renewal cooling-off period”, after a free or discounted trial period ends, or after a longer-term (12+ month) contract auto-renews. 

As expected, provisions concerning refunds for services (and particularly for services relating to the supply of digital content) was one of the more contentious issues in the consultation, with significant divergence in the opinions expressed by respondents. The consultation explored whether contracts for the supply of digital content (e.g. through streaming services) should be treated differently from other service contracts (e.g. gym memberships) when it comes to proportionate refunds, for example to address concerns around consumers “binge-watching” content in a short space of time before cancelling and getting a refund. Ultimately, the Government was not convinced that sufficient evidence was put forward to justify differentiating the approach to refunds between different types of services, but a small concession will be retained for digital content subscriptions. 

The Government has therefore now confirmed that:

• For goods: Consumers are entitled to a refund (including standard delivery costs) if goods are returned after cancellation. Traders may reduce refunds for unsealed goods (where this presents a hygiene risk), or for perishable/bespoke goods cancelled after supply. Full refunds remain available where perishable/bespoke goods are cancelled before supply.
• For services: If supply of the service has not begun before the consumer cancels, they will receive a full refund; otherwise, the consumer will receive a “proportionate” refund.
• For digital content: Consumers will still be able to get immediate access to digital content if they waive their right to cancel a contract for a refund during the initial cooling-off period. Consumers who cancel during subsequent renewal cooling-off periods will be entitled to a proportionate refund.

How a “proportionate” refund is calculated will depend on the terms of the contract and how much of the contracted services have been performed before cancellation. Refunds will need to be made without undue delay, and within 14 days of cancellation, to the same method of payment used by the consumer unless agreed otherwise.

If a trader fails to inform consumers of their initial and/or renewal cooling-off rights, the cooling-off period will extend to 14 days after the trader corrects the breach, up to a maximum of 12 months. 

Exercising the right to cancel

The DMCCA provides that terms that seek to impose liability on the consumer for a renewal payment earlier than the day on which the contract renews are invalid and have no effect. Concerns had been raised that consumers may nevertheless become “trapped” into auto-renewing subscriptions due to confusion over when they can cancel without incurring further payment.

The Government has confirmed that it will legislate to prevent the use of terms which make it “disproportionately difficult” for consumers to exit an auto-renewing contract, for example narrow cancellation windows. In practice, this may require traders to allow cancellation at any time, subject to accommodating traders’ legitimate operational processes. The Government has also confirmed that it will legislate to ensure that traders cannot make consumers liable for payment before a rolling contract actually renews onto a new contract period. 

No further legislation is proposed on the requirement that cancellation be as straightforward as sign-up, or on limits to retention offers; these issues are expected to be addressed through guidance. The Government also intends to introduce consumer remedies (including refunds where a consumer has been charged following cancellation, without a requirement to return returnable goods) if a trader breaches an implied term of the subscription contract, including failures to give certain key pre-contract information. 

Get in touch

If you have questions on the proposed new subscription rules, please reach out to a member of the team or your usual Freshfields contact.  You can also subscribe to our DMCCA client toolkit for further updates and insights.