ACCC Subscription Trap Compliance: What Australian Businesses Must Fix Before July 2027

Over 100,000 Australian consumers were charged for subscriptions they'd already cancelled. The ACCC took the companies to court. New legislation will make the penalties even steeper.

If your business runs a subscription model — SaaS, meal kits, streaming, memberships, digital services — this is the compliance article you need to read right now.

What Is a Subscription Trap?

A subscription trap is any practice that makes it easy for consumers to sign up for a recurring payment but unreasonably difficult to cancel. The ACCC defines it as conduct where businesses “use complex cancellation processes, hidden terms, or deceptive design to prevent consumers from ending subscriptions they no longer want.”

The practice sits within the broader category of dark patterns under Australian Consumer Law — manipulative design elements that undermine consumer autonomy.

Common forms include:

• Phone-only cancellation for a service you signed up for online
• Multi-step cancellation flows designed to create friction and encourage abandonment
• Charging after cancellation — processing payments even after a consumer has completed the cancellation process
• Free trial auto-conversion — converting free trials to paid subscriptions without clear disclosure or consent
• Cancellation pages that are hard to find — burying the cancel option behind account settings, help articles, or chat queues
• Retention dark patterns — guilt-tripping, countdown timers, or “are you sure?” loops that extend far beyond what's needed to confirm a cancellation

The ACCC Is Already Prosecuting — Hard

This isn't a future risk. The ACCC has made subscription traps a top enforcement priority and has active proceedings against multiple major brands.

HelloFresh — 62,061 Consumers Charged After Cancellation

In December 2025, the ACCC filed proceedings against HelloFresh for subscription trap conduct between January 2023 and March 2025.

HelloFresh advertised that customers could easily manage and cancel subscriptions through their online account. In practice, consumers who attempted to cancel before the first delivery cut-off were still charged — because the only way to actually cancel was to call customer service. 62,061 consumers were charged despite attempting to cancel.

The ACCC is seeking penalties, compensation orders for affected consumers, declarations, publication orders, and a compliance program.

Youfoodz — 39,408 Consumers Charged After Cancellation

Filed alongside the HelloFresh case, Youfoodz allegedly engaged in the same conduct between October 2022 and November 2024. 39,408 consumers were charged after attempting to cancel online.

Same story: the website promised easy online cancellation, but consumers couldn't actually cancel without contacting customer service directly.

Microsoft — 2.7 Million Australians Affected by Hidden Plan Options

In October 2025, the ACCC took Microsoft to court over its Microsoft 365 subscription practices. Microsoft increased prices by up to 45% when adding Copilot AI features. A cheaper “Classic” plan without Copilot existed — but Microsoft only revealed it to the 2.7 million affected Australian subscribers if they started the cancellation process.

This is subscription trap territory: using the cancellation flow itself as a retention mechanism, and hiding information consumers need to make informed choices.

JustAnswer — $2 Advertised, $50–90/Month Charged

In September 2025, the ACCC filed proceedings against JustAnswer for advertising a $2 access fee while actually charging $50–90 per month in recurring subscription fees — at least 25 times the advertised price. JustAnswer also allegedly made false claims about being affiliated with Australian government agencies.

The Pattern Is Clear

The ACCC has stated it will “continue to push for high penalties” where there is deliberate conduct causing significant consumer harm.

What the New Law Requires — The 2026 Bill

The Competition and Consumer Amendment (Unfair Trading Practices) Bill 2026, released as an exposure draft in February 2026, introduces dedicated subscription contract requirements. If passed, these take effect 1 July 2027.

Cancellation Symmetry

The single most important new requirement: if a consumer can sign up online, they must be able to cancel online. The cancellation pathway must be available through the same channel used for sign-up.

No more phone-only cancellation for digital sign-ups. No more “contact us” forms that go into a queue. No more chat-only cancellation during business hours for a 24/7 online service.

Limited Cancellation Steps

Exit steps must be limited to those “reasonably necessary” to end the contract. This kills multi-step retention flows — the ten-screen “are you sure?” gauntlets, the mandatory surveys, the guilt-trip popups.

What's “reasonably necessary”? Confirming the account, confirming the intent to cancel, and acknowledging any consequences (like losing access to content). That's roughly it.

Mandatory Reminder Notices

Businesses must send reminder notices before subscription renewals. The Bill imposes different obligations depending on contract type:

• Fixed-term contracts: Reminder before the end of the initial term
• Indefinite-term contracts: Periodic reminders of ongoing charges
• Free trials and promotional periods: Clear notice before the trial converts to a paid subscription, with enough lead time for the consumer to cancel

Point-of-Offer Disclosures

At the point of sign-up, businesses must clearly disclose:

• The total cost of the subscription (including any costs that apply after a promotional period)
• The billing frequency
• How to cancel
• What happens at the end of any trial or promotional period

Maximum Penalties

$50 million per breach, three times the benefit obtained, or 30% of adjusted turnover — whichever is greatest. These penalties apply to the general unfair trading practices prohibition, which covers subscription traps.

Exemptions

The subscription requirements do not apply to: public utility contracts (except telecoms and transport), real estate leases, hire-purchase agreements, prescription healthcare products, school or childcare services.

The 5-Step Subscription Compliance Checklist

Here's what every subscription business in Australia should be doing right now — before July 2027, and frankly before the ACCC's next round of enforcement actions under existing law.

Step 1: Map Your Sign-Up vs. Cancel Flow

Draw both journeys side by side. Count the steps.

• Sign-up: How many clicks from landing page to active subscription?
• Cancel: How many clicks from account dashboard to confirmed cancellation?

If cancellation takes more steps than sign-up, you have a problem. If cancellation requires a different channel (phone, email, chat) than sign-up (web), you have a bigger problem.

Step 2: Audit Your Cancellation Friction

Walk through the cancellation flow as a real user. Document every friction point:

• Is the cancel button easy to find? (Check: is it in Account Settings, or buried in Help > Contact Us > Billing > Cancellation?)
• Are there retention screens? How many? Do they use confirm-shaming or misdirection?
• Is there a mandatory retention call or chat?
• After completing cancellation, is the consumer actually cancelled? Or are they charged again?

Step 3: Review Your Disclosure at Sign-Up

At the point where a consumer enters their payment details, verify that the following are clearly visible (not hidden in terms and conditions):

• Total recurring cost
• Billing frequency (weekly, monthly, annually)
• What happens after any trial or promotional period
• How to cancel and what the deadline is for avoiding the next charge

Step 4: Set Up Renewal Reminders

If you're not already sending renewal reminder emails, build this now. At minimum:

• Before auto-renewal: Remind the consumer of the upcoming charge, the amount, and how to cancel
• Before trial-to-paid conversion: Send a clear notice at least 48 hours before conversion
• Annual renewals: Remind at least 14 days in advance

Step 5: Automate Compliance Monitoring

Manual audits catch problems after the fact. Automated compliance scanning catches them in real time.

AI-powered tools can analyse your subscription flows, flag dark patterns, and map potential violations to specific ACL provisions — giving you a compliance baseline you can act on immediately.

Scan your subscription flows for compliance risks — free TrustScan check

What Happens If You Don't Comply

Under existing law (ACL sections 18 and 21), the ACCC can already pursue subscription trap conduct. The HelloFresh, Youfoodz, Microsoft, and JustAnswer proceedings are proof.

Under the 2026 Bill (if passed), dedicated subscription contract provisions create explicit obligations — and remove any ambiguity about whether subscription traps are illegal.

The consequences:

• Financial penalties up to $50 million per breach (or 3× benefit, or 30% of turnover)
• Compensation orders — courts can order direct repayment to affected consumers
• Publication orders — your company named publicly in ACCC enforcement notices
• Compliance program orders — court-imposed compliance obligations monitored by the ACCC
• Reputational damage — consumers and media pay attention to ACCC media releases

The ACCC has also signalled it will pursue senior executive accountability where there are indications of poor compliance culture. This isn't just a corporate risk — it's a personal one for directors and officers.

Common Questions

We already have a cancel button on our website. Are we compliant?

Having a cancel button isn't enough. The ACCC looks at the entire cancellation journey. If the button is hard to find, leads to a retention flow that discourages cancellation, or doesn't actually stop the next charge, you may still have a subscription trap.

Can we offer a retention discount when someone tries to cancel?

Yes — but carefully. Offering a genuine discount is different from creating a confusing multi-step flow that obscures the cancel option. The retention offer should be presented alongside a clear, single-click cancel option. The consumer should never feel they can't find how to actually leave.

Do the new subscription rules apply to B2B SaaS?

The proposed subscription contract requirements apply to goods and services “ordinarily acquired for personal, domestic or household use” up to $100,000. If your SaaS serves both consumer and business markets (which most do), the safer assumption is that the rules apply to you.

When should we start preparing?

Now. The ACCC is prosecuting under existing ACL provisions today. The new law commences 1 July 2027, but compliance timelines for product changes are typically 3–6 months. Starting in 2027 means you're already behind.

What's the cheapest way to get compliant?

Audit first. Identify the gaps. Fix the worst ones (cancellation flow symmetry, hidden fees). Then set up ongoing monitoring. A free TrustScan compliance check gives you a baseline in minutes.

The Bottom Line

Subscription traps are the ACCC's number one digital enforcement target. Over 100,000 Australians have already been affected in just the cases filed so far. The new legislation adds explicit obligations — cancellation symmetry, renewal reminders, point-of-offer disclosures — with $50 million penalties.

The businesses that audit and fix their subscription flows now will avoid enforcement. The ones that don't will join HelloFresh and Microsoft as ACCC media releases.