Warning issued on free trial subscription models ahead of new consumer protection laws

Thousands of UK businesses could need to redesign their subscription services ahead of sweeping new consumer protection laws coming into force next year, warn commercial contract specialists at national law firm Clarke Willmott.

Under the Digital Markets, Competition and Consumers Act 2024 (DMCCA), firms will have to give customers clear, prominent and easy-to-understand information before they sign up to a subscription.

The reforms will particularly affect subscription businesses such as beauty boxes, meal kits, fitness memberships and digital services, with free trial models needing to send customers clear reminders before converting into paid plans.

Amy Peacey (pictured), a partner in Clarke Willmott’s commercial contracts team, said: “The act will directly target so-called ‘subscription traps’, introducing tougher obligations on businesses to make subscriptions clearer, fairer and easier to cancel.

“Although the new rules aren’t expected to come into force until spring 2027, businesses shouldn’t put preparations on hold.

“For many – particularly those with digital platforms or subscription-based models – the changes will mean major operational updates that take time to implement.

“Businesses might assume that this is just a legal exercise, when it actually affects websites, apps, payment systems, CRM software, customer service and marketing.”

Amy Peacey, who helps clients document their contract relationships with third parties, adds that businesses often think of compliance as a paperwork exercise - but says the DMCCA goes much further than this.

She said: “It’s really about the customer experience.

“Companies will need to look closely at how people move through their sign-up and renewal journeys, and make sure nothing is hidden, confusing or designed to trip them up.

“It means reviewing websites, apps, customer service processes and even the way teams communicate with customers. If you operate across multiple channels, you’ll need to make sure your messaging is consistent and genuinely clear.

“We expect the biggest impact on businesses that rely on free trials, as they’ll need to send customers clear, timely reminders before a trial becomes a paid subscription – something that will require solid systems and careful planning.”