Major changes to UK consumer law are on their way: is your charity ready?

Major changes to consumer law affecting how charities contract with individuals.

The consumer law provisions of the Digital Markets, Competition and Consumers Act 2024 are expected to come into effect in April 2025. They represent major changes to UK consumer law which will have a significant impact on charities and social enterprises that enter into business to consumer (or B2C) contracts – i.e. contracts under which a charity or social enterprise provides services, goods or digital content to a consumer, such as an individual beneficiary.

The Act makes the following changes to consumer law:

Subscription contracts: subscription contracts can be particularly useful for charities or social enterprises when they want to offer regular, auto-renewing payments (whether for a fixed or indefinite period) for services, goods or digital content. This approach can help in maintaining a consistent cash flow, which is crucial for planning and executing long-term projects. We work with a number of clients that offer subscription services – for example where individuals can sign up for regular newsletters, magazines, or access to the exclusive content of a culture and heritage organisation through annual membership. This is a relatively straightforward example of a subscription contract, but charities should be aware that other arrangements they maintain may be inadvertently caught by the legislation – e.g. a charity which offers a quarterly update newsletter to a repeat donor.

Under the Act, charities or social enterprises that offer subscription contracts will, unless the contract is excluded, be required to:

(i) provide more information to consumers before entering into a contract, e.g. as to the contract’s key terms and the consumer’s ability to cancel during a cooling off period (see below) and beyond – distinguishing between “key pre-contract information” and “full pre-contract information”, which must be given separately;

(ii) send reminders before a contract "rolls over" into a new term (auto-renewal). Reminder notices must be sent to the consumer to notify them that the subscription contract is going to continue and that a renewal payment will fall due. The reminders are of the first renewal payment and of subsequent renewal payments which are either the last payment for six months or every six months after the previous notice; and

(iii) allow "cooling off" periods, enabling a consumer to cancel a subscription contract within 14 days of the contract being entered into, or within 14 days of its renewal date.

Whilst the new law relating to subscription contracts is not expected to come into force until the Spring of 2026, charities and social enterprises should be planning well ahead to ensure that their subscription contracts and related processes are compliant.

Pricing: the Act tightens up the law on misleading pricing practices, for example around headline prices which do not reflect the true cost of products or services and drip pricing (where a lower price is used to get consumers interested, only for them to discover that it doesn't take account of unavoidable further charges which are disclosed at a later date).

Fake or misleading reviews: the Act prohibits the submission or commissioning of fake reviews and requires businesses to ensure that they do not publish consumer reviews in a misleading manner, and to take reasonable and proportionate steps to prevent fake reviews and avoid misleading presentation or reviews.

Historically, breaching consumer law has been seen as primarily invoking reputational risk. However, under the Act, charities and social enterprises that engage in B2C contracts face a much higher risk of a substantial fine from serious non-compliance. Under the Act, consumer law is effectively brought into line with competition law - the Competition and Markets Authority may impose fines of up to 10% of global annual turnover on organisations found to have infringed consumer law.

We can help your charity or social enterprise navigate these changes to consumer law. For further information, please contact a member of the team.