Australian Consumer Law · Commences 1 July 2027

‘Confirmshaming’ and subscription traps: is your cancellation process ready for the new law?

Subscription compliance will no longer stop at the contract. Businesses will need to explain key terms clearly, provide straightforward cancellation and avoid customer journeys that manipulate, pressure or obstruct consumers.

27 August 2026 · General information

The law has passed

The preparation period has started.

The Competition and Consumer Amendment (Unfair Trading Practices) Act 2026 received Royal Assent on 6 July 2026. Its unfair trading, subscription contract and drip pricing reforms commence on 1 July 2027.

For subscription businesses, this is more than a terms-and-conditions update. The new law reaches the whole customer journey - from the way an offer is presented, to the information given during the subscription and the steps required to leave.

The key question

Can a customer understand what they are joining, what and when they will pay, how the arrangement will continue and how to cancel - without being pressured, confused or obstructed?

Subscription scope

Check the arrangement, not just its label.

The new subscription rules cover common models including:

subscriptions that continue indefinitely until the customer cancels;
fixed-term contracts that automatically renew or continue;
free trials that automatically convert to paid subscriptions; and
introductory discounts that automatically move to a higher price.

There are specific exclusions, including leases, real property licences, hire purchase, instalment payment arrangements, childcare and school tuition, as well as any arrangements prescribed by regulation. Businesses should classify each recurring arrangement by how it actually operates.

From sign-up to exit

The customer journey will need to work at every stage.

Before the customer subscribes

Key information must be disclosed, including that the arrangement is a subscription, the customer's payment liabilities, its term, how it renews or continues, any notice needed to end it and how the customer can end it.

During the subscription

Customers will need to receive prescribed information at prescribed times. The detailed content and timing of these ongoing notices will be set by regulations, so reminder systems should be designed to adapt once those requirements are finalised.

When the customer wants to leave

Every cancellation method offered by the business must be easy to find, straightforward to use and limited to steps that are reasonably necessary. An online cancellation method will be required where the customer entered the contract online or the business offers online sign-up for the same kind of subscription.

Confirmshaming

A clever retention prompt can become a compliance risk.

‘Confirmshaming’ is the use of emotionally loaded wording or design to make a person feel guilty, irresponsible or foolish for declining an offer or cancelling. A choice such as ‘No thanks, I prefer paying more’ is a simple example.

The Act does not use the word ‘confirmshaming’, and it does not automatically make every retention message unlawful. The broader unfair trading prohibition becomes relevant where conduct manipulates a consumer or unreasonably distorts their decision-making environment and causes, or is likely to cause, detriment.

Cancellation rules create a separate risk where the exit process is not easy to find or straightforward. Warning signs include:

an emotionally loaded cancellation option beside a positive ‘stay’ message;
a dominant ‘keep my subscription’ button paired with a weak, hidden or ambiguous cancellation control;
repeated confirmation screens or irrelevant questions that delay cancellation;
urgent loss warnings that overstate what the customer will give up; and
a simple online sign-up followed by a phone-only or otherwise burdensome exit.

Businesses can still explain genuine benefits, consequences and alternatives. The safer approach is to do so accurately, neutrally and without making the cancellation path harder to complete.

Transition planning

Do not assume the reforms only affect new customers.

The subscription provisions apply to contracts entered into after commencement. They can also begin to apply to an existing contract when it is renewed, extended, otherwise continued or varied on or after 1 July 2027.

Some ongoing information and cancellation protections also extend to standard-form small business contracts where the customer has fewer than 100 employees or annual turnover below A$10 million. Businesses should map consumer and qualifying small business subscriptions now, including legacy plans and contracts managed on older systems.

Financial and regulatory risk

Subscription design is already attracting serious enforcement.

The new unfair trading and subscription provisions will be subject to the Australian Consumer Law civil penalty regime. For corporations, the maximum penalty can be the greater of A$100 million, three times the value of any reasonably attributable benefit, or 30% of adjusted turnover during the relevant breach turnover period where the benefit cannot be determined. The maximum for an individual is A$2.5 million.

Regulators do not need to wait for the new provisions to act where an existing subscription journey is misleading. In July 2026, the Federal Court ordered JustAnswer to pay A$10 million after consumers seeking a low-cost answer were enrolled into monthly subscriptions. In August 2026, the Federal Court found eHarmony had made misleading representations about aspects of its subscriptions; penalties and other orders are still to be decided.

Keep the legal basis clear

JustAnswer and eHarmony were dealt with under existing law. They are not decisions under the new provisions, which do not commence until 1 July 2027. They nevertheless show why price, renewal and cancellation journeys should be reviewed now.

Read Watchdog's summary of the eHarmony finding →

Turn the update into action

Audit the whole subscription journey before July 2027.

Start with the live customer experience, then connect each screen and process to the contract, billing system, customer service scripts and retention controls that support it.

Map every model and channel. Identify recurring, renewing, trial and introductory-price arrangements, including legacy products and small business plans.
Capture the live journey. Record the advertisements, plan pages, checkout screens, confirmations, reminders, account controls and cancellation steps customers actually see.
Fix disclosure timing and prominence. Put payment, term, renewal, notice and cancellation information where customers need it before they agree.
Test every exit route. Count the steps, remove unnecessary questions and verify that online cancellation works across devices and account types.
Review retention language and design. Remove emotional pressure, misleading loss warnings, confusing choices and visual treatment that obstructs cancellation.
Prepare adaptable reminders. Build the capability to send and evidence ongoing notices, while monitoring the regulations that will settle their content and timing.
Control change. Trigger a compliance review when a price, plan, supplier, platform, script or interface changes.

Official sources

Review the enacted law and current regulator material.

Practical support

Apply the new requirements to your own subscription journey.

Watchdog can help map affected subscription models, review customer-facing disclosures and cancellation processes, test the live journey and turn identified gaps into a practical implementation plan.

Prepare before commencement

A focused impact assessment can identify which products, contracts, systems and teams need attention before 1 July 2027.

Request an impact assessment →Explore website and subscription support →

Important information

Check the final regulations and your specific circumstances.

This update is general information, not legal advice. Regulations will provide further detail for parts of the subscription regime, including ongoing information requirements. Laws, official guidance and proceedings can change. Check the current official material and obtain advice for your circumstances before acting.