Government consumer subscription crackdown – what charities need to know

Charity membership subscriptions that are closely linked to a charity’s purpose will be excluded from the government’s proposed regulations for subscriptions, part of the new consumer protection rules, which will be a relief for the sector.

The announcement comes as part of a government crackdown announced 2 April, on unwanted and misleading subscriptions to stop free trials which turn into expensive contracts. The aim is to make it simpler, fairer and less painful for consumers to escape unwanted subscriptions. The measures are expected to save UK consumers around £400m annually.

It is estimated that across the UK there are 155 million active subscriptions with nearly10million of them believed to be unwanted. Over 3.4 million people are being rolled from free or discounted trials to fully costed contracts and around 1.3 million are caught out by unexpected autorenewals. These consumers could be expected to save on average £14 per month per unwanted subscription.

Following on from the consultation on The Digital Markets, Competition and Consumers Act 2024, (DMCCA) the government’s decision reduces the risk that most charity fundraising models could be undermined.

The government has said it will legislate to exclude charitable memberships from the DMCCA. This will broadly apply to contracts between a charity and a consumer that allow the consumer to attend performances, view collections or visit museums, galleries, historic properties, landscapes, wildlife sites or performing arts venues where the access is related to the charity’s purpose.

Memberships or subscriptions which are purely digital in nature, professional or supporter memberships not linked to access, lottery or prize-draw subscriptions, subscriptions operated through commercial trading subsidiaries or hybrid arrangements offering substantial commercial benefits may still require careful analysis to see if they fall within the scope of the DMCCA rules.

Gift Aid

Gift Aid will continue to be available (subject to the normal rules on the excluded memberships) to avoid the DMCCA interfering with legitimate Gift Aid claims however further secondary legislation is expected.

All charities should now review their subscriptions and trading activity ahead of the new subscription regime which is expected to come into force in Spring 2027.

If you’d like a quick sense check or a more detailed review of how this could affect your organisation, please do get in touch with our team.