New Rules to Tackle Fake Discounts Set to Benefit UK Consumers in 2027

The new UK Prime Minister, Andy Burnham, yesterday pledged to bring forward the introduction of several planned measures to help consumers exit bad contracts, stop misleading price promotions and to generally tackle “subscription traps“. Some of the new measures will now be introduced from January 2027, rather than next Spring, but others require further consultation.

The new rules appear to mark both an enhancement and acceleration of changes that were broadly already part of the measures first introduced under the recent Digital Markets, Competition and Consumers Act 2024 (DMCCA). The DMCCA specifically included measures to tackle Subscription Traps (i.e. situations in which businesses make it difficult for customers to exit their contract), which we’ve summarised below.

Tackling Subscription Traps

Under new rules, businesses must:

➤ Provide clearer information to consumers before they enter a subscription contract;

➤ Issue a reminder to consumers 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; and

➤ Ensure 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 long-term contract renews.

In short, the Prime Minister intends to begin enforcing these measures a few months earlier than originally planned, which will now start from January 2027. We should point out that, when looking at the telecoms side of things, Ofcom and the government already have various rules and charters to encourage fair pricing and treatment of customers (e.g. End-of-Contract Notifications, One Touch Switching and the Telecoms Consumer Charter). The changes above will thus act as a complement to those and probably won’t change all that much.

The newer and thus more interesting part of the Government’s announcement is the plan to tackle “pretend prices and deceptive deals” (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.

On this point the government is referencing situations where service providers might, for example, briefly set a subscription price at a much higher (artificial) rate than it is usually sold, only to then suddenly introduce a new discount in order to call the deal “half-price” – even though technically it may not be half the price of its usual pricing level or even close.

Existing rules already exist to tackle misleading discount claims like this, but in practice enforcement is difficult, which the government acknowledges (there’s a lot of complexity with different platforms, comparison sites or A/B testing – often offering different discounts for the same package etc.). Suffice to say, even when the rules change, it’s not going to be an easy one to investigate.

“Under current laws, it can be difficult for enforcers to take on these cases. 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,” said the Government’s announcement.

Prime Minister, Andy 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. I’m determined to pull every single lever we can to provide people with some room to breathe on the cost of living.

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.”

Sadly the one thing still missing from this discussion is the ongoing issue of unfair mid-contract price hikes (example), which many consumers want to see banned. But so far the Government has tended to flip-flop over the issue more than a fish out of water. At the end of last year the government finally made clear that they had “no plans to ban in-contract price rises” for UK consumers taking broadband, mobile and phone services (here).