If your business earns money from subscriptions, memberships, or auto-renewing services, the rules have changed. On 1 July 2026, the Competition and Consumer Amendment (Unfair Trading Practices) Act passed Federal Parliament, and its new subscription cancellation law for Australia takes effect on 1 July 2027. You have a year to get ready, and for many businesses the work is bigger than it sounds.
What do the new laws cover?
The new laws do two main things. They introduce a general ban on unfair trading practices towards consumers, and they set up a detailed regime for subscription contracts that covers the entire life of the subscription, from free trial to cancellation.
The subscription rules are the part with the most practical bite for small business. In summary, they require:
- Clear upfront disclosure: Key terms of the subscription, including price, renewal timing and how to cancel, must be disclosed clearly before the customer signs up. Burying the auto-renewal in page seven of your terms will not cut it.
- Reminder notices: Customers must be reminded before renewals and before price increases, so a “set and forget” annual renewal that quietly bills the customer’s card is no longer allowed to be quiet.
- Cancellation as easy as sign-up: If a customer can subscribe online in two clicks, they must be able to cancel online with similar ease. Requiring a phone call, a retention conversation, or a hunt through account settings to cancel a subscription started online is exactly what the law targets.
- Honest pricing: The reforms also strengthen disclosure obligations around fees added during checkout, aimed at so-called drip pricing.
Importantly, the subscription protections extend to small business customers as well as consumers, so business-to-business subscription products are not exempt.
Who is affected?
More businesses than you might think. Obvious examples are software subscriptions, meal kits, streaming, memberships and subscription boxes. Less obvious ones include gyms, tutoring with recurring billing, maintenance plans, and any service where payment auto-renews. If money comes off a card on a schedule unless the customer stops it, assume you are covered and work backwards from there.
What are the penalties?
The new prohibitions sit inside the Australian Consumer Law penalty regime, which was sharply increased in March 2026.
For companies, maximum penalties for breaching the ACL can reach the greater of $100 million, three times the benefit obtained, or 30% of adjusted turnover during the breach period.
Regulators do not reserve enforcement for tech giants either: the ACCC has a long record of pursuing small and mid-sized businesses over subscription and renewal practices.
What should you do in the next 12 months?
- Map your subscription lifecycle: Write down every step from advertisement to sign-up, renewal, price change and cancellation. The problems usually live in the gaps nobody owns.
- Fix the cancellation path first: It is the highest risk item and the most visible to customers. Online sign-up must mean easy online cancellation.
- Rebuild your disclosure: Price, renewal frequency, renewal date, and cancellation method should be plainly visible at the point of sign-up, not just in the terms.
- Set up reminder systems: You will need automated notices before renewal and before any price rise. Start scoping this with your platform or developer now, since it is a systems job as much as a legal one.
- Update your subscription terms: Your terms and conditions need to match the new obligations and your actual practices. We can assist with this: see our online shop and app services.
Do I need to worry if my terms were drafted a few years ago?
Almost certainly yes. Terms drafted before these reforms will not deal with reminder notices or the cancellation requirements, and older standard form contracts also carry risk under the unfair contract terms rules, which we covered in our earlier guide to unfair terms. A comprehensive review by a qualified lawyer will address both of these issues.
The businesses that treat this as a product improvement rather than a compliance chore will come out ahead: easy cancellation and honest renewal reminders are also what keeps customers trusting you. If you want your subscription flow and terms reviewed, book a free consultation and we will quote a fixed fee before any work starts.
