Government to fast-track crackdown on fake discounts and subscription traps

Prime Minister Andy Burnham has pledged to bring forward planned measures designed to help people exit bad contracts, stop misleading price promotions and tackle so-called "subscription traps", with some of the changes now due to take effect from January 2027 rather than next spring.

The announcement builds on measures first introduced under the Digital Markets, Competition and Consumers Act 2024 (DMCCA). It marks both an acceleration and an enhancement of rules that were already broadly in the pipeline. Some parts will begin from January 2027, though others still require further consultation.

According to the Department for Business and Trade (DBT), there are around 155 million active subscriptions in the UK, covering broadband and mobile as well as other services. Consumers spend an estimated £1.6bn a year on subscriptions they do not actually want. The government says the new changes could in theory save consumers up to £170 per person.

Tackling subscription traps

Under the new rules, businesses will be required to:

• Provide clearer information to consumers before they enter a subscription contract.
• Issue a reminder that a free trial or low-cost introductory offer is coming to an end, and a reminder before a contract auto-renews onto a new term.
• Make sure consumers can exit a contract in a straightforward, cost-effective and timely way.

An enhanced 14-day cooling-off period will also let consumers cancel after a trial or a long-term contract renews. Enforcement of these measures is set to begin from January 2027, a few months earlier than originally planned.

On the telecoms side, Ofcom and the government already have various rules and charters aimed at encouraging fair pricing and treatment of customers, including End-of-Contract Notifications, One Touch Switching and the Telecoms Consumer Charter. The new changes will act as a complement to these, and are unlikely to alter much in that area.

Cracking down on "pretend prices"

The newer part of the government's plan concerns "pretend prices and deceptive deals", or fake discounts. A consultation will launch this autumn to assess whether tactics such as fake "was" prices, invented discounts and misleading recommended retail prices (RRPs) should be added to the list of practices banned under the DMCCA.

The government points to situations where a service provider might briefly set a subscription price at an artificially high rate, then introduce a new discount so the deal can be called "half-price", even where it may not be anywhere near half the usual price.

Rules already exist to tackle misleading discount claims, but in practice enforcement is difficult, something the government acknowledges. Different platforms, comparison sites and A/B testing can all offer different discounts for the same package, adding considerable complexity. Even after the rules change, such cases are unlikely to be easy to investigate.

"Under current laws, it can be difficult for enforcers to take on these cases," the government said in its announcement. "Adding these tactics to this list would mean they will automatically be considered unfair, making it easier to crack down while making rules simpler for businesses to follow."

Burnham said: "I know people are sick and tired of rip-off discounts and subscription traps. Westminster has got used to telling people that everyday hassles like this are just part of life. I don't think that's right, especially when the cost of living continues to weigh heavily on so many people's lives."

He added: "We're putting an end to phoney bargains. If something is advertised as half price, it should actually be half price. We're also making it as easy to leave a subscription as it is to join. These are just two of the everyday fixes we're going to be rolling out, today is just the start. We want to put more money in people's pockets and give people hope that politics really can work for them and their everyday lives."

Mid-contract price rises left out

One issue absent from the announcement is unfair mid-contract price hikes, which many consumers want to see banned. The government has shifted position on this repeatedly. At the end of last year it made clear it had "no plans to ban in-contract price rises" for consumers taking broadband, mobile and phone services.