Subscription Traps and Hidden Fees Are Now Banned in Australia

Parliament passed the Competition and Consumer Amendment (Unfair Trading Practices) Bill last week, making it illegal for businesses to trap customers in subscriptions, hide fees at checkout, or use manipulative design to steer purchasing decisions. It takes effect on 1 July 2027. Penalties run up to $50 million.

It has been called one of the most significant updates to Australian Consumer Law since its inception. And given that half of all Australians are currently paying for subscriptions they do not use, costing up to $1,667 a year according to Compare the Market research from March 2026, the timing matters.

Three things are now prohibited

Subscription traps. Cancelling a subscription must be as simple as signing up. No buried menus, no mandatory phone calls, no guilt-trip confirmation screens designed to make you give up halfway through. Businesses must also send reminder notices before renewals, trial expiries, or price increases.

Drip pricing. If there are mandatory fees on top of an advertised price, they must be displayed alongside the base price from the start. Not added at the final checkout screen. This targets the practice common in ticketing, travel, and accommodation where a $120 booking becomes $168 by the time you pay.

Dark patterns. Pre-ticked boxes that opt you into extras. Countdown timers creating artificial urgency. Interface designs that make the expensive option large and colourful while the cheaper option is greyed out. These manipulative design techniques are now explicitly prohibited under a general ban on conduct that "unreasonably distorts the environment" in which consumers make decisions.

What this means if you run a business

If your business charges subscriptions, ongoing memberships, or auto-renewing services, you have 12 months to get compliant. The law applies to gyms, software providers, coaching services, trades maintenance contracts, and any other business with recurring billing.

The penalties are designed to hurt: up to $50 million, three times the benefit gained, or 30% of your adjusted turnover during the period of the breach, whichever is highest.

But there is a positive angle here too. The law also protects you as a business customer. Software subscriptions, SaaS tools, industry memberships, payment processing add-ons: your suppliers will now need to send you renewal notices and make it straightforward to leave. For small businesses still paying for tools they signed up for two years ago and forgot about, that transparency is overdue.

What to do this week

The law does not take effect until July 2027. But the money you are losing to unused subscriptions is leaving your account right now.

Pull your last three bank and credit card statements. List every recurring charge. You will probably find charges you forgot about, trials you never cancelled, and prices that crept up without notice. Cancel anything you have not used in 60 days. Compare the Market found that gym memberships alone cost non-users an average of $93 a month, or $1,116 a year.

If you run a business with recurring billing, audit your cancellation process now. Map how many steps it takes a customer to cancel versus how many it took them to sign up. If those numbers are not roughly equal, you have work to do. Businesses that clean up early build trust. Businesses that wait until enforcement starts look like they were relying on the trap.

This article is general information only and is not financial advice.