Consultation launched on new rules for subscription contracts

The government has launched a consultation on measures to make it easier for consumers to get a refund or cancel subscription contracts.

The consultation will explore the detail of how the new regime governing contracts, ranging from physical subscriptions such as magazines to digital products including software and streaming services, may operate. Proposals being considered include how returns and refunds should work when a customer exercises their 14-day statutory right to cancel after signing up or an auto-renewal, how contract information must be provided, and exit processes that will meet requirements for cancellation to be as easy as signing up.

While an attractive model for businesses due to the predictability of future sales, new figures reveal nearly 10 million of 155 million active subscriptions in the UK are unwanted, costing consumers £1.6 billion a year. The consultation will seek views from a variety of groups who have an interest in the subscriptions market including businesses who offer subscriptions, consumer groups, and enforcement agencies.   

Business Secretary Jonathan Reynolds said:   

“We’re looking to hear from as many businesses, consumer groups, and other interested groups as possible to allow us to set fair regulations that stop this corporate abuse of power whilst retaining the benefits of subscriptions for consumers and businesses.“

The consultation into the details of how to best regulate subscription contracts follows the Digital Market, Competition and Consumers Act gaining Royal Assent in May 2024. Alongside new rules for subscriptions, the Act also includes tighter rules for how businesses communicate pricing in online transactions and gives the Competition and Markets Authority greater powers to intervene in digital markets that are often dominated by a small number of large global tech firms.