Subscription contract reforms under the DMCC Act: what changes in January 2027

Businesses that sell subscriptions in the UK are facing a significant compliance deadline. The popularity of this model of e-commerce has meant that consumers can now buy almost everything from toilet paper to digital content on a subscription basis. Large retailers have also enabled subscription 'baskets' for recurring goods.

Under the Digital Markets, Competition and Consumers Act 2024 (DMCC Act), new rules governing subscription contracts are now set to come into force in January 2027. The UK Government confirmed it was moving forward the timetable as part of a wider package of everyday fixes aimed at cost of living concerns. The Government estimates that consumers could save around £14 a month for every unwanted subscription they are able to cancel under the new rules. The changes were previously expected for spring 2027 and with the moved up deadline businesses have less time to prepare.

What the new regulations require

The new regulation introduces four core obligations for traders offering ongoing subscriptions:

- Clearer pre-contract information must be given to consumers before they sign up. They need to understand what they are committing to, how much it will cost and how the subscription will renew. - Reminder notices must be sent to consumers at key points, including before a free trial or introductory offer converts into a paid subscription and before a contract renews, giving consumers an opportunity to decide whether to continue. - Cooling-off rights will apply at critical moments including a 14-day window to cancel when a free trial rolls into a paid subscription or when certain renewals take effect, in addition to when a subscription renews for a 12 month+ term. Cooling-off notices are also required to be sent in a durable medium (record). - An easy, straightforward cancellation process must be available, which should end the common practice of making sign up simple but cancellation difficult and multi-step.

Beyond these headline obligations, traders will also need to establish which of their products fall within scope, present pre-contract information in two distinct tiers, issue reminders on a prescribed cadence rather than at their discretion, apply two separate cooling-off rights with differing refund consequences, send notices at set points in a form the consumer can retain, and remove contract terms that will be prohibited outright.

The Competition and Markets Authority (the CMA) has begun making use of new enforcement powers including the ability to impose fines directly of up to 10% of global turnover. As a result, a breach of these obligations carries real financial exposure for businesses. Where a consumer becomes liable for a payment because a trader has breached one of the Act's requirements, the consumer is presumed entitled to a refund for everything paid from the point of the breach until cancellation.

How to prepare

Although secondary legislation and full statutory guidance is still to be published, businesses should not wait to act. Practical steps businesses can take include:

- reviewing consumer contract terms for long notice periods or other barriers to exit; - mapping out how reminder, cooling-off and end of contract notices will be delivered; - auditing signup and cancellation steps to ensure online cancellation is genuinely accessible; and - for digital content and service providers, working out how proportionate refunds will be calculated if a renewal is cancelled during the new cooling-off period.

Given the shortened implementation window, early preparation will be essential to avoid last-minute compliance issues.

Getting help

Hythe Legal advises UK consumer and technology businesses on subscription models, consumer contract terms and DMCC Act readiness. If you sell on a recurring basis and want your terms, notices and cancellation journey reviewed ahead of January 2027, do get in touch.