DMCCA Subscription Contracts Regime: The (Draft) Detail Arrives

• The rules apply to business-to-consumer contracts that auto-renew unless the consumer acts, including trials that roll onto full price.
• It makes no difference whether the contract is made online, by phone or in person. Excluded contracts include utilities, financial services, telecoms and cultural and heritage charity memberships.
• The rules do not apply to existing contracts or to B2B contracts. However, the guidance considers it “best practice” for consumers to receive consistent protections regardless of when they took out their contract, including where an existing contract renews after 1 January 2027.
• Traders based outside the UK are also caught. Under the DMCCA, the rules apply despite a non-UK choice of law where the contract has a close connection with the UK, and the guidance confirms that traders selling to UK consumers must comply.

• A set of ‘key’ information must be given all together, set apart from other content, and as close as possible to sign-up. For online sign-ups, this information cannot sit behind a link.
• A broader set of ‘full’ information can be linked, but it must also be sent on a durable medium, such as email, after sign-up.

• Reminders must contain prescribed information and, as signalled in the Consultation Response and now set out in the draft Regulations, be sent on a durable medium (e.g., email) with their purpose readily apparent. The guidance says in-app messages that cannot be retained do not count.
• Reminders must be sent roughly every six months on rolling contracts, before a trial or discount ends, and before renewal onto a term of 12 months or more. Long-term renewals also need an extra, earlier reminder.

• Consumers can end a subscription at any time.
• Exit must be straightforward, and online if they signed up online.
• Traders must send an end of contract notice within 24 hours of an online exit, or within three working days otherwise.

• Consumers cannot be charged for a renewal before the contract actually renews.

• The two rights: Consumers can cancel without penalty within 14 days of signing up (“initial” cooling-off). They can also cancel within 14 days after a trial ends or the contract renews onto a term of 12 months or more (“renewal” cooling-off). Either way, they may be entitled to a refund depending on the circumstances and what’s being supplied.  

How cooling-off will work:

Services:

• If supply has not started, the consumer gets a full refund. Once supply has started, the trader keeps a proportionate amount, measured by time or usage.
• New detail: in the initial period, the trader can keep a proportionate amount for services supplied only if it gave the required cooling-off information and the consumer expressly consented before supply began (on a durable medium for off-premises contracts). Otherwise, the consumer gets a full refund. Traders may choose to give a full refund rather than calculate a proportionate one.

Digital content:

• Initial period: the consumer can waive the right if they expressly consent and acknowledge losing it, and the trader confirms both on a durable medium. If the waiver is not properly obtained, the consumer pays nothing for content already supplied (consistent with the current approach under the Consumer Contracts Regulations 2013).
• New detail: the waiver is available only where the contract is for digital content alone, not for bundles with services or goods in the same contract (digital content supplied under its own, separate contract can still use it).
• Renewal period: there is no waiver mechanism. The consumer can cancel within 14 days and pays only for the digital content supplied during the renewal cooling-off period, up to the point of cancellation. That amount is calculated as a proportion of the price, based on how the offer is structured (by time or by units).
  • Time-based example: cancelling an annual £365 film library on day 4 after renewal costs £4.
  • Unit-based example: where a free trial converts to £50 a month for ten downloads, a consumer who has downloaded two films owes £10.
  • Proportionate charging need not always be time-based, although for unlimited access over a set period the guidance confirms that it is “likely to be”. A proportionate refund is the minimum the consumer must receive, and traders may give a full refund if the calculation is too burdensome.

The trader can keep the proportionate amount only if it sent a compliant cooling-off notice.

Goods:

• Returnable goods: the consumer returns them within 14 days, normally at their own cost, for a refund including standard delivery, less any loss in value from excessive handling. In some cases, such as bulky goods on doorstep contracts, the trader must collect at its own cost.
• Non-returnable goods: perishable and bespoke goods (plus standard delivery), unsealed hygiene-sealed goods and inseparably mixed goods can be charged for once supplied.
• New – shorter window: for contracts exclusively for perishable, bespoke or hired goods, the initial window runs from the day after the contract is made, not from delivery, if the consumer was told so before signing up.
• Hired goods: charged pro rata for the hire period, with other charges (such as damage) left to the contract.

Mixed and ancillary contracts:

• Mixed contracts: the trader works out what is owed for each part supplied and deducts the total from the payments made.
• Ancillary contracts: cancelling during the initial period automatically cancels linked ancillary contracts, including insurance. The trader must tell any third-party provider. The draft Regulations do not extend this to cancellation during a renewal period.

• The refund period now runs from a defined “relevant date”, which is essentially the first renewal payment affected by the breach.
• Consumers have 12 months from that date to cancel. The refund can be reduced if the consumer unreasonably delays.

• The published list covers failure to give specified items of key pre-contract information, missing or incomplete reminders, and an unreasonable reminder period.
• Easy exit is not on the list. For exit failures, the consumer must show they made a payment they would otherwise have avoided.

• These are treated as paid for. The exception is where the trader promptly arranges a cost-free return within 14 days and the consumer expressly agrees.

• Unless the consumer chooses otherwise, they are treated as exercising whichever right gives them the best outcome.

• Where a discount runs at one fixed rate across several payments, the reminder is due before the first payment at the higher rate.

• The DMCCA already requires these to be given separately from any other information. The guidance now confirms that this means no marketing and no combining with a reminder notice.
• The draft Regulations add that they must be on a durable medium, with their purpose readily apparent.

• An email address alone is not a straightforward online route.
• The Consultation Response had already said that offers and feedback requests must not frustrate or unreasonably prolong exit. The draft guidance now makes this concrete: a compulsory feedback form before exit is unlikely to comply, and retention offers must not prolong the process or discourage the consumer from completing it.
• The consumer ideally should not have to contact the trader more than once.

• Broadly, the duties sit with the trader that contracts with the consumer, including where app stores or billing providers handle customer-facing steps, although the government expects all traders dealing with consumers to comply.
• The charities exclusion is drafted to cover memberships for viewing property, performances and films.