Industry News

Government sets out new rules for subscription contracts following consultation

By PPA Public Affairs Team

27 Apr 2022

The Government has responded to the evidence submitted to its consultation on Reforming Competition and Consumer Policy, including the consumer rights proposals concerning subscription contracts.

PPA submitted a response to this consultation, based on feedback from our Customer Direct group, last year. PPA also met with the Department of Business to set out members’ concerns in greater detail.

The Government is making some changes to subscriptions rules and will legislate to:

• clarify and enhance existing pre-contract information requirements for subscription contracts;

• introduce a specific requirement on traders to send reminders to consumers before a contract rolls over (or auto-renews) onto a new term;

• create a specific obligation requiring traders to remind consumers that a free trial or low-cost introductory offer is coming to an end; and

• create a specific requirement for traders to ensure their consumers are able to exit a contract in a straightforward and timely way.

In response to feedback provided, especially around costs to business, Government will not be taking forward the proposals to explicitly:

• require traders offering consumers subscription contracts to offer those consumers a choice (at the pre-contract stage) to take the subscription without auto-renewal or rollover terms (i.e. for a fixed initial commitment period only);

• require traders, before the end of a free trial or low-cost introduction offer, to obtain the consumer’s explicit consent to continuing the subscription after the free trial or low cost introductory offer period ends; and

• require traders, after a reasonably long period of time where there is evidence of inactivity to give notice of suspension of service and to stop charging money for the consumption or use of goods, services, and digital content under a subscription contract.

PPA will continue to engage Department for Business as the detail of the proposals are developed, ensuring that the new rules are not unnecessarily burdensome. We are pleased that the Government acknowledged points made by PPA and other trade organisations regarding the rejected proposals, which had the potential to impact publishers which already operate a ‘gold standard’ of subscriptions best practice.

The Government also recognised points made by PPA and others in response to the Impact Assessment, stating: ‘Those who did respond noted that the expected implementation cost to business…was underestimated and needed to reflect the variation in costs across size of business’. It was also stated that the potential cost to business has informed the package of proposals to be taken forwards.

The Government will need to pass legislation, which has yet to be published, to introduce the new rules.

If you would like to discuss the matters raised here, please email the PPA’s Public Affairs Executive Sebastian Cuttill – sebastian.cuttill@ppa.co.uk

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