Auto-renewal contract provisions are now used widely across sectors, from digital services to recurring home subscriptions. If your business uses or plans to introduce subscription models, you must ensure that your contracts are legally compliant and transparent to avoid breaching consumer law and damaging customer trust.
Complaints often arise when cancellation terms are unclear or auto-renewals are triggered without clear notice. Our commercial law solicitors can help you review your contracts, clarify your processes, and ensure your auto-renewal terms meet both current and upcoming legal standards, while strengthening customer confidence.
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The law on auto renewals is changing
Understanding and complying with the law that underpins subscription contracts is more important now than ever, as the DMCCA will introduce significant changes to the regulation of subscription contracts with consumers.
The government published its response to consultation on the new subscription regime in April 2026. The detailed rules will be implemented through secondary legislation and guidance, with the regime expected to come into force in spring 2027.
If you are running an e-commerce, tech or software as a service (SaaS) business offering subscription services to consumer customers, you should act to:
- Review your business-to-consumer (B2C) contracts and assess, the practical changes required to your customer journey and processes
- Review your auto-renew provisions to ensure they are compliant
,
- Train your staff on the evolving compliance requirements
.
Our commercial solicitors can help you prepare for the new legal framework and ensure your business is ready.
In the meantime, your business must continue to comply with the existing law on auto-renewal contracts. Failure to do so risks breaching current legislation. Being compliant now provides a strong foundation for meeting the new requirements.
What are auto-renew provisions?
If your customer’s contract is automatically renewed unless they take active steps to cancel their subscription, this is an auto-renew contract. Many sectors use auto-renewal provisions to enhance customer retention; however, this can lead to complaints, particularly where customers are not clearly informed or where cancellation is difficult.
While subscription models may encourage continued use, inappropriate use of auto-renewal provisions can breach consumer protection rules and damage your brand.
If your business uses, or is considering using, auto-renewal provisions, then to avoid penalties, you must:
- Ensure your contractual terms are fair,
- Follow general legislation and industry-specific regulations and guidance.
By adopting best practices and avoiding overly restrictive subscription models, you can reduce the risk of customers being put off by difficult cancellation processes.
Regulatory provisions and auto-renewal
The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013/3134 (CCRs) apply to distance selling contracts (where a business sells goods or services without face-to-face contact, using online platforms, phone, or email).
If your auto-renew agreements fall within this category (e.g. a subscription service entered into via a mobile app), these rules will apply.
See our article on Distance selling regulations: returns, refunds and consumer rights.
What might be unfair renewal terms?
Subscription model contract terms may be considered unfair to consumers if they are unclear or ambiguous. For example, a customer will have a legitimate complaint if:
- The contract does not specify its length
- Pre-contract information does not state that the contract will automatically renew unless cancelled
- There is no clear explanation of how to cancel (a “subscription trap”)
- Cancellation steps are overly complex or difficult to access
- No renewal reminder is sent, or the reminder does not clearly explain how to cancel
- An unreasonable cancellation fee is charged
- The customer is not informed of price increases, and the contract renews on significantly worse terms (a “loyalty trap”)
Key points to note:
- Contract terms must be clearly brought to the customer’s attention before purchase and customers must confirm that they have read, understood and accepted them
- Any unclear terms may be deemed unfair
- Pre-contract information must be provided before the customer commits
Acceptable terms in subscription contracts
Your business must comply with industry-specific regulations, applicable standards from regulatory bodies, and Competition and Markets Authority (CMA) guidance.
Choice of contract entry
Choice on contract entry should be the default position. Consumers should be able to choose between:
- A fixed-term contract, or
- A contract with automatic renewal
.
This allows informed decision-making and reduces the risk of unintended renewal.
In regulated sectors such as energy, suppliers may instead use indefinite contracts with introductory discounts but must clearly explain how pricing changes and how consumers can terminate.
Pre-contract information
Before a customer commits to a contract, they must be provided with clear information, including:
- Contract length
- Whether the contract automatically renews
- How renewal works
- When and how reminders are
- Any price increases
- Length of the renewed contract
- How to cancel
- Cancellation and refund rights
This information must be clear, prominent, and ideally acknowledged by the customer before purchase.
Price increases and changes to the product
Businesses should not increase prices or materially change services without a clear contractual basis or consumer consent.
Any pricing mechanisms or change provisions must be transparent, proportionate, and clearly explained. At renewal, customers should be informed of any changes that will apply.
Exit fees
Exit fees may be charged after any initial cancellation period but should not apply once the minimum contract term has expired.
They must not be excessive, and notice periods must be reasonable. Terms that make cancellation disproportionately difficult are likely to face increased scrutiny under the new regime.
No renewal when not in the customer’s best interests
Subscription contracts should not be renewed where it is clearly not in the customer’s interests, for example where there has been prolonged inactivity.
Businesses should consider systems that identify inactivity and prompt customers before renewal.
Particular care is required where consumers may be vulnerable due to age, ill-health, or if a customer has died without relatives being aware of the subscription model contract.
Right to cancel
There should be a clear right to cancel subscription model contracts at initial contract entry and auto-renewal.
What will change under the DMCCA?
The government has now confirmed the key features of the new subscription contracts regime. The changes are designed to tackle “subscription traps” and improve transparency and consumer control.
While detailed requirements will follow in secondary legislation, the core obligations are now clear. Businesses should prepare for:
Pre-contract information
Consumers must be given clear and prominent information before they enter into a subscription contract, including:
- that the contract is a subscription
- pricing and billing frequency
- renewal mechanics
- how to cancel
Two mandatory cooling-off periods
Consumers will have:
- A 14-day cooling-off period at the start of the contract, and
- A new 14-day cooling-off period after:
- a free or discounted trial ends, and
- the auto-renewal of a contract lasting 12 months or more
Proportionate refunds on cancellation: Consumers cancelling during a renewal cooling-off period may be entitled to a refund, which can be reduced to reflect any services or digital content already used.
Stricter information notice requirements: Businesses must send clear and timely notices (including reminder, end of contract and renewal notices), in a durable medium, with their purpose clearly explained.
Enhanced reminder obligations: Businesses must remind consumers before a trial ends or a contract renews, including clear information on upcoming charges and how to cancel.
Simpler cancellation processes: Cancellation must be straightforward and accessible. Where a contract is entered into online, businesses will generally need to offer a comparable online cancellation route.
Stronger enforcement and remedies: Consumers will have the right to cancel where businesses breach certain statutory duties, such as failing to provide required reminder notices. In specified cases set out in legislation, consumers will be entitled to a refund without needing to prove financial loss.
The regime applies broadly to subscriptions for goods, services and digital content. Certain sectors such as energy, water, telecommunications and financial services - are excluded because they are already covered by their own regulatory frameworks. It also does not apply to certain charitable, cultural and heritage memberships.
Stay compliant and customer-focused with your auto-renewal terms
The confirmed changes under the Digital Markets, Competition and Consumers Act 2024 represent a significant shift towards a more prescriptive and consumer-focused subscription regime, with implementation expected in spring 2027.
Businesses will need to review not only their contract terms, but also their customer journeys, communications, and internal processes.
Compliant contract terms are not just a legal requirement - they are an opportunity to build trust, reduce disputes, and strengthen long-term customer relationships.
Our commercial law solicitors can help you review your contracts, update your subscription model, and ensure your business is prepared for both current and upcoming legal standards.
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