The ban on "subscription traps" will be brought forward by three months, Prime and Business Secretary Andy Burnham has announced. Subscriptions will be easier to cancel, and companies will be compelled to make it clear when contracts auto-renew at a higher price.
The prime minister is also planning to outlaw shops from falsely claiming products previously retailed at much higher prices to advertise supposed deals, which he said tricks shoppers into thinking they are getting better value on purchases.
Burnham will bring forward a package of changes announced under his predecessor Sir Keir Starmer to end so-called subscription traps and a crackdown on "pretend prices".
Shadow chancellor Mel Stride branded the measures "reheated" and said the prime minister "has already run out of ideas".
The plans were announced under Sir Keir in April, but are being brought forward by Burnham's government in a bid to give families "room to breathe" amid the high cost of living.
On subscriptions, the government said the changes will mean businesses have "to provide clearer up-front information, regular reminders and a much easier exit to contracts" for customers.
Burnham, who is embarking on a tour of the UK while Parliament is in recess, has promised a series of "everyday fixes" to help people with the cost of living.
He said: "I'm determined to pull every single lever we can to provide people with some room to breathe on the cost of living."
Subscription traps
How to avoid getting caught out by unexpected fees or terms
Check the small print
A lot of subscription services make it very easy to subscribe but make the terms of the subscription less clear. Look out for red flags such as minimum terms, cancellation fees and auto-renewal before entering your details.
Think before you click
Consumer advocate group Which? has warned the public of bogus social media ads which turn out to be scam subscriptions. Users are offered a free trial or a minimal fee, but in handing over their card details they are in fact signing up to "outrageous weekly or monthly charges for questionable services". If you fall victim to these scams, Which? recommends gathering as much evidence as you can, raising a dispute with your bank and reporting the scam to Report Fraud or the Advertising Standards Authority.
Minimum terms and cancellation fees
Watch out for contracts which lock you in for a certain period of time – this is common with broadband packages. Check if the subscription is for a fixed term, or rolling. And if it’s fixed, will you be charged a penalty for cancelling early? Make sure you know the details before you sign anything.
Auto-renewal
Don’t get caught out by free trials – check if the subscription automatically renews. Sometimes the company will notify you, but they aren’t obliged to (yet). Set a reminder a few days before your free trial ends.
Cancelling the direct debit isn’t enough
Cancelling a recurring payment to the provider doesn’t cancel the contract you have with them. You must notify the provider, and currently you have to contact them as outlined in the contract, such as over the phone. You may still have to pay an early exit fee, too.
Know your rights
For certain contracts such as broadband and mobile phones, you may have certain rights to cancel already, but it depends on the circumstances. You may be legally entitled to cancel if there is a problem with the service provided, such as poor broadband speed.
The measures being brought forward are aimed at making it easier for consumers to cancel unwanted subscriptions and stopping people being rolled onto expensive contracts without their knowledge.
They were expected to come into force next spring, but Burnham's government has promised they will now be implemented by January 2027.
When they were announced in April, the government said the plans would save consumers £400m a year in total, or up to £170 per person.
At the time, the Department for Business and Trade said there are 10 million unwanted, active subscriptions across the UK.
It said that more than 3.5 million people are being "quietly rolled from free or discounted trials into fully costed contracts", while another 1.3 million are caught out by unexpected auto-renewals.
On top of the already planned changes, Burnham is also vowing to end shops' use of "pretend prices". This will stop retailers using "was" prices, made-up discounts or misleading recommended retail prices (RRPs) to highlight deals.
The government will launch a consultation this autumn to decide how the new measures should be implemented.
Consumer group Which? said it has "repeatedly exposed businesses, including trusted household brands, ripping off customers with dodgy deals that aren't what they seem".
Its head of consumer rights policy, Sue Davies, welcomed the announcement and called for the government to bring the rules in "swiftly".
But Stride said: "The cost of living didn't become a problem last week, so you have to ask why it has taken Labour so long to enact legislation passed by the previous government."
The Digital Markets, Competition and Consumer Act, passed under the Conservatives in 2024, cracked down on hidden fees, fake reviews online and made it easier for customers to cancel subscriptions.
It is already unlawful to use false "was" prices for items on sale, but it is not on the list of the Competition and Markets Authority's (CMA) list of banned practices.
Practices on the list, such as operating pyramid schemes or displaying a quality assurance mark without authorisation, are automatically considered illegal without consumer harm having to be proved.
The Liberal Democrats urged Burnham to "go further" to protect consumers, with Treasury spokesperson Daisy Cooper calling for "strengthened protections against rogue traders" and action to tackle supermarket "shrinkflation" — the practice of products being made smaller yet being sold for the same price.
The announcement is Burnham's latest intervention aimed at easing the cost of living, following a £2 bus fare cap in England and a VAT cut on household electricity bills.
But he is likely to come under pressure to make more significant changes in the Budget, which will be delivered by Chancellor John Healey on 28 October.
But Healey has made it clear he will oversee "strong fiscal discipline" – which will limit how much the government has to spend.
'I had to cancel my debit card to end a contract'
Chris Fell, a photographer from Wiltshire, told BBC Your Voice he had to cancel his debit card in order to get out of a subscription trap.
The 71-year-old had signed up for Viewbug, a service he wanted to use to show off his pictures and build a portfolio.
But he complained the subscription costs "doubled" in the three years he was using the service, adding that "the renewal was going through automatically and they would not cancel it".
In order to break the subscription, Fell said: "I resorted to asking my bank to cancel a debit card so that a new card would be issued with a different 16 digit number. "Job done and then I just waited for the US-based company to ask for a new debit card number which I then declined."
Viewbug was asked to comment.
What are my rights now?
For certain contracts such as broadband and mobile phones, you may have certain rights to cancel already, but it depends on the circumstances. You may be legally entitled to cancel if there is a problem with the service provided, such as poor broadband speed.
