Parliament has passed the Unfair Trading Practices Bill, banning subscription traps and drip pricing from 1 July 2027. Penalties run up to $100 million. Any business that makes cancelling harder than signing up now has 12 months to fix it.
A cancel flow you buried on purpose was never a growth tactic. It was borrowed revenue. Now the loan is being called in.
Parliament has passed the Competition and Consumer Amendment (Unfair Trading Practices) Bill 2026. From 1 July 2027 it will be unlawful to make a subscription hard to cancel, hide fees behind drip pricing or lean on the other tricks that pad short-term numbers at the customer's expense. Businesses have a 12-month runway to get their houses in order.
The penalties are not a slap on the wrist. Breaches fall under the existing Australian Consumer Law civil penalty regime, with fines of up to $100 million on offer. Gyms, software companies, media subscriptions, anyone with a recurring charge, will need to give people a cancel path that is as easy as the signup path. The rules also reach contracts offered to small business subscribers, so this is not only a consumer story.
Why it matters
Plenty of Australian businesses have been quietly propping up retention with friction. Make the cancel button hard to find, route it through a phone queue, offer three retention screens before you let someone go. It flatters the churn number for a while. It does nothing for the health of the business, because a customer held hostage is not a customer who comes back.
The law removes that option. From July 2027 the friction is a liability, not a lever. The businesses that have been treating a painful cancel flow as a KPI win are about to find out the number was never real.
The maximum penalty for unfair trading practices under Australia's new law, which takes effect 1 July 2027
What to do about it
Audit your cancel flow now, before the deadline forces it. Time how long it takes a real person to cancel. If it is longer than signing up, that is your first fix.
Separate genuine retention from manufactured friction. A good win-back offer is fine. A cancel button hidden three menus deep is not.
Check your pricing for drip. If the price a customer sees at the start is not the price they pay at the end, rewrite it now.
Review small business contracts too. The new protections cover boilerplate terms you use with smaller suppliers and partners, not just consumers.
Treat the 12 months as a head start, not a grace period. The businesses that fix this early will look trustworthy while their competitors scramble in June 2027.
Trust is the cheapest retention tool you have. This law just made the alternative expensive.