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UK compliance regulations on subscriptions with auto-renewal

UK compliance regulations on subscriptions with auto-renewal

Last updated: 20-Dec-2022
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Overview

The Competition and Markets Authority from UK has issued multiple regulation principles applicable to businesses selling subscriptions. 

There is a special focus on the subscriptions renewing automatically, the communication and the transparency towards the shoppers starting from the initial acquisition of the subscription and continuing during the lifecycle with each new renewal. 

To be fully compliant with the UK regulations, 2Checkout has enabled a series of automatic e-mails for the merchants selling subscription plans in the UK to make sure that shoppers are able to make a fully informed choice about auto-renewal.

Benefits

  • For shoppers: increased transparency, taking informed decisions, self-service their subscriptions 

  • For merchants: being compliant with the regulations, building a trust-based relationship with the shoppers 

Availability

The UK principles have been implemented based on the billing address country of the shoppers as located in the UK. 

The shopper's delivery address is not considered in the context of availability of the new implementations. Consequently, the new regulations are impacting businesses selling subscriptions in the UK. 

Impact on shopping carts

One of the UK principles is focusing on shopper awareness, for whom all the subscription details should be disclosed in a complete and clear manner when deciding to purchase a new subscription. 

The shopping carts were already following the guidance of the above principle.  

The only change coming with this regulation is to highlight through an additional text formulation the renewal setting of the subscription, applicable regardless if there is an automatic or a manual one.  

You can find the updated version of the text in the shopping carts, near the Place order button: "By placing the order with the auto-renewal option selected, you are confirming that you are over 16 years of age and you agree that your license will automatically renew in accordance with the terms above (as such terms may be amended by mutual agreement), as well as with 2Checkout’s terms and conditions."

Compliance regulations UK

Impact shopping carts

Compliance e-mails shopping cart

Impact on shopper emails  

E-mails sent after an order is placed 

Regardless the combination of e-mails sent after an order is placed, either if it’s one, two or three e-mails sent based on the settings, every e-mail content has been updated with new information about the behavior of auto-renewal and the flexibility around easily turning off auto-renewal. 

The below text has been added to the Support information section from the footer area of the e-mails: 

If applicable, the auto-renewal option for your subscription may be cancelled at any time. 

"You can cancel it using myAccount as described above, by contacting 2Checkout at <2CO support e-mail address> or the applicable merchant support at <merchant_support_email> email address. 

The above new text is applied only to shoppers from the UK, based on their billing address. 

The impacted e-mails are: Payment Confirmation, Payment Receipt and Delivery/Fulfillment. 

The text is visible for the e-mails sent after the initial acquisition and after each new renewal, regardless if it is a manual or an automatic one. 

E-mails sent after an order is placed

E-mails sent after an order is placed

 E-mails sent after a subscription is automatically renewed 

Starting with the first automatic renewal and continuing with all the automatic renewals throughout the lifetime of a subscription, the UK regulator is mandating that shoppers have the right to a cooling off period of 14 days during which they can give up the subscription without providing a specific reason.

More than that, the shopper is entitled to receive a full refund for the paid billing cycle for which the subscription automatically renewed. 

The e-mails sent after each automatic renewal have been updated with the below text: (placed on the Support information section from the footer area).

"You have the right to withdraw from the contract without giving reasons within 14 days from the receipt of this auto-renewal confirmation. In this case you will receive a full refund for the auto-renewed term. To exercise your right to withdraw from the auto-renewed contract, please inform us by means of a clear statement as described in our <terms and conditions> page."

Subscription automatically renewed

FAQ 

  1. What happens if the billing address country is changed during the subscription lifecycle? 

Whenever the billing address country is updated from UK to any other country or, the other way around, from any other country to UK, the latest updates are automatically enabled or disabled, without having to do any extra steps. 

  2.  Given the focus on the auto-renewal setting of subscription, are there any changes in the way subscriptions are automatically renewing from one billing cycle to the other? 

No, there is no change in the way the automatic renewal is processed on the subscriptions. The only changes concern the way the information is presented to the shopper.

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