DMCCA subscription contracts: Government confirms new regime

The Government has published its response to its consultation on implementing the new subscription contracts regime under the Digital Markets, Competition and Consumers Act 2024 (DMCCA), confirming key points that will shape the secondary legislation and associated guidance. The new regime is expected to commence in Spring 2027 and will require many businesses selling consumer subscriptions to revisit both their contract terms and operational processes. 

The consultation ran from 18 November 2024 to 10 February 2025 and sought views on how the DMCCA subscription measures should operate in practice. The Government’s response, published on 2 April 2026, provides a clearer picture of what businesses will need to implement – including two cooling-off periods, enhanced refund rules and more prescriptive information and notice requirements.

You can read more about the core requirements introduced by the DMCCA in our earlier article.

We summarise the key outcomes below and highlight what they are likely to mean for your business if you offer subscription contracts to consumers.

Key outcomes of the consultation

The Government’s response signals its continued focus on protecting consumer rights; businesses should expect changes not only to terms and customer journeys, but also to billing, notice and refund operations.

Key outcomes for subscription providers are set out below.

1. Cooling-off periods : businesses must provide two separate 14-day cooling-off periods during which consumers can cancel without penalty.
   • The first applies when the consumer enters the contract.
   • The second follows either the end of a trial or the automatic renewal of a contract lasting more than 12 months.

While the initial 14-day period broadly reflects existing consumer law, the renewal / post-trial cooling-off period is new and will require businesses to build additional cancellation and refund capability at key renewal points.

2. Refunds (goods, services and digital content):
   • Refunds for cancelled goods: provided the goods are ‘returnable’ (i.e. non-bespoke, non-sealed), consumers will receive a full refund upon return, including delivery costs. If the goods are perishable, bespoke or sealed (i.e. due to hygiene reasons), the business can reduce the refund amount accordingly. Notably, with bespoke or perishable items, consumers are entitled to a full refund if the cancellation arises before the goods are supplied.
   • Refunds for cancelled services: the approach to refunds aligns with the initial proposal that refunds should be proportionate to the ‘amount’ of service received. If a consumer cancels before the service starts, a full refund is required. Once the service has begun or while it is ongoing, the refund will be proportionate to when the cancellation occurs.
   • Refunds for digital content contracts: in line with existing consumer law, by accessing the services consumers waive the right to an initial cooling-off period. However, where a consumer cancels during a renewal cooling-off period, they are entitled to a proportionate refund for content supplied up to cancellation. This reflects the Government’s priority of protecting consumer rights, notwithstanding industry concerns about potential “binge-and-cancel” behaviour.
   • Refund payments: Refunds must be processed promptly, within 14 days of cancellation or receipt of returnable goods, using the original payment method unless otherwise agreed.
3. Charitable memberships: certain charitable memberships between a charity and a consumer will be excluded from the DMCCA. This means they will not be subject to the additional rules under the new subscription regime.
4. Information and notices:
   • Extension of the cooling off period: if the business fails to inform consumers about their cooling off period, the cooling off period shall extend to 14 days after the business corrects the breach. This extension runs up to a maximum of 12 months.
   • Termination and “easy exit”: consumers must be able to cancel auto-renewal contracts at any time, and the exit process must be straightforward. For example, where a consumer signs up online, they must be able to cancel online. The secondary legislation will restrict terms and practices that make cancellation disproportionately difficult, and guidance is expected to clarify what “straightforward” means in practice.
   • Failure to comply with duties: if the business fails to comply with its notification duties under the DMCCA, and the consumer has become liable for a payment i.e. failure to send a reminder notice, the consumer is presumed to be entitled to a full refund of all payments from when the breach is ‘operational’ to when the contract is cancelled by the consumer.
   • Format of notices: notices must be given in writing and on a durable medium. The purpose of the notice must be immediately apparent. This applies to reminder notices, cooling off notices and end of contract notices.
   • Circumvention: the Government has confirmed the legislation will prohibit terms that have the purpose or effect of making it difficult for consumers to cancel an auto-renewal provision. Businesses will also be prohibited from making consumers liable for payment before a rolling contract has renewed onto a new contractual period.

Overall, the response reinforces the Government’s focus on consumer protection and points towards limited appetite for diluting the proposed measures in response to business feedback. While some industry concerns (including “binge-and-cancel” risk) were acknowledged, the Government appears minded to proceed on the basis that existing waivers and proportionate refunds provide adequate balance. Businesses should therefore plan on implementing the measures largely as consulted on, subject to the detail in the awaited secondary legislation and guidance.

Next steps – what should businesses do to prepare?

The Government have confirmed they anticipate the new regime will commence in Spring 2027 and will publish guidance to support implementation of the new measures. 

Businesses still have time to consider their consumer subscription arrangements, but should take proactive steps to account for the new rules; this should include reviewing current pre-contract information provided and updating accordingly to ensure it meets the requirements of the DMCCA. Businesses should also consider what operational changes are needed to implement systems to send timely reminders to consumers and establish straightforward processes for consumers to terminate their subscriptions. 

If you would like further advice on any of the points discussed above, please contact Richard Hugo, or another member of our Commercial Team.

This article was written by Jess Mant and Richard Hugo.