Unfair trading practices: Arriving mid-2027 – but UTP-style enforcement has already landed

Yesterday, the Government released exposure draft legislation to introduce a general prohibition against unfair trading practices and specific obligations to address subscription traps and drip pricing. 

While these changes are planned to come into effect in mid-2027, the ACCC is already taking UTP-style cases. In this explainer, we take a look at the draft legislation and examine some of the ACCC’s recent enforcement action in this space.  

Key takeaways 

• On 9 February 2026, Treasury released exposure draft legislation to address unfair trading practices (draft UTP laws), which includes:
  • (1) A general prohibition on practices that either (i) unreasonably manipulate the consumer, or (ii) unreasonably distort the environment in which the consumer makes a decision and which cause (or are likely to cause) detriment - whether that detriment is financial or otherwise.
  • (2) Specific disclosure and reminder obligations for suppliers who sell subscriptions, including requirements to disclose a statement and information about the key terms of the contract at the point of entry and to send reminders to consumers at key points during their subscription (e.g. before a free or discounted trial ends or before the next renewal) to prevent the risk of subscription traps.
  • (3) Specific obligations to disclose the amount of transaction based charges with the ‘base price’ of goods or services, if those charges can be calculated, or if they can’t be calculated, disclose the method for calculating any transaction based charges to prevent drip pricing.
     
• The proposed UTP laws will apply to both online and in-store environments and are proposed to take effect on 1 July 2027. Treasury’s consultation process closes on 23 February 2026.
  
  
• Although implementation may be some time away, businesses should remain vigilant. The ACCC has shown it will take UTP-style enforcement action in relation to ‘subscription traps' and drip pricing using existing provisions in the Australian Consumer Law (ACL). We unpack some of these actions below.
  
  
• To prepare, businesses should:
  • Consider whether there are aspects of their customer journey that may unreasonably distort consumer decision-making, for example, creating an undue sense of urgency or pressure, providing excessive or confusing information or making key information difficult to find.
  • Start considering how they would implement the proposed disclosure and reminder obligations in their subscription contracting arrangements.
  • Remove all unreasonable barriers to cancellation and ensure that consumers can cancel a subscription online that they bought online.
  • Review their pricing practices to ensure they disclose the total price of goods or services and any transaction based charges, if they can be calculated (or at minimum, disclose a method of how transaction based charges will be calculated).

What’s happened and when will the new laws take effect?

After years of consultation, draft UTP laws were released by Treasury on 9 February 2026. The draft Competition and Consumer Amendment (Unfair Trading Practices) Bill 2026 and accompanying draft Explanatory Memorandum (EM) are here.

To recap:

• In late 2020, Commonwealth, State and Territory consumer affairs ministers made commitments to explore the potential adoption of a UTP prohibition.
• Between late 2022 and late 2024, various consultation processes occurred on the potential scope of the prohibition.
• In late 2025, Assistant Minister for Productivity, Competition, Charities and Treasury Andrew Leigh foreshadowed that the new prohibitions were likely to include both a general, principles-based prohibition and specific prohibitions on ‘subscription traps’ and drip pricing and that draft legislation was coming in early 2026.
• On 19 December 2025: Treasury released a Decision Regulation Impact Statement (DRIS) reflecting the Government’s preference for a general UTP prohibition and specific prohibitions addressing subscription traps and drip pricing.
• On 9 February 2026: Treasury released draft UTP laws with a proposed commencement date of 1 July 2027 and a draft EM.

What are the prohibitions and obligations?

The draft UTP laws contain both a general prohibition on certain practices, specific obligations for businesses when selling subscriptions and obligations to disclose transaction based charges.

The draft UTP laws are proposed to apply to both online and in-store environments.

In terms of the shape of the new UTP laws, it appears that, for now, the Government has elected not to pursue either:

• a more extensive list of specific prohibitions that were initially consulted on the basis that such a list is likely to become quickly outdated as technology and marketing evolve.
• further reforms to address dynamic pricing, remove barriers to accessing customer service or introduce a ban on businesses requiring consumers to create an online account to make a purchase, on the basis that existing ACL protections, the proposed scope of the general prohibition, and proposed reform in other areas of industry-specific reform to the ACL to address these issues (such as the anticipated ex ante regime for digital platforms) provide sufficient protection.

General prohibition

The general prohibition has been drafted to prohibit practices that either:

• unreasonably manipulate the consumer, or
• unreasonably distort the environment in which the consumer makes a decision,

and which cause (or are likely to cause) detriment - whether that detriment is financial or otherwise.

The draft legislation also includes a brief ‘grey list’ at section 28B(5), which sets out three examples of practices that may contravene the general prohibition:

• interference with a consumer’s ability to exercise legal rights, or seek legal remedies, in relation to the supply of, or an offer to supply, goods or services;
• failure to disclose material information, or disclosure of material information in a complex or ineffective way, to a consumer;
• creation of an environment which places a consumer under unreasonable pressure in relation to, or obstructs the consumer from, making or fulfilling a consumer’s decision.

What is reasonable? 

The EM states that the intent of the general prohibition is to capture conduct which exploits consumer behaviour so as to influence consumers to make decisions which aren’t in their best interests. In particular, the legislation aims to target online ‘dark patterns’ which may involve ‘nudging’ or repetitively pressuring consumers into making economic decisions, imposing obstacles or complexity designed to frustrate consumers, or create a false sense of urgency or pressure, often without the consumer’s full awareness.

The EM states that the intention of the prohibition is to restrict sales behaviour which goes beyond legitimate and reasonable marketing practices in order to influence consumer choices. Neither the EM or the draft UTP laws provide additional detail on the factors to be taken into account when deciding if conduct is “reasonable”.

What detriment is covered? 

The second limb of the general prohibition requires that the conduct causes or is likely to cause detriment to the consumer. The draft UTP laws expressly state that this may be financial or non-financial detriment. Examples of non-financial loss in the EM are wasted time or ‘negative impacts’ which could extend to intangible detriment such as stress or emotional harm. It is not necessary to show evidence of detriment, as conduct which is likely to cause detriment is also captured.

Subscription obligations

The subscription-related provisions in the draft legislation impose obligations on suppliers to make disclosures at the point of entry into the contract and to send reminder notices to consumers at critical points. The intention is that by providing this information upfront, consumers will not be “trapped” in an unwanted subscription.

Statement of information when offering goods or services under a subscription contract

Before entry into the contract, suppliers need to disclose a statement and information about key terms of the contract, including whether it is a fixed or indefinite term (or includes a free trial/lower rate period), the cost, contract term, renewal details and how to cancel (including any notice requirements). The statement and information must be disclosed in a ‘comprehensible, audible and unambiguous’ way within a ‘reasonable time’ before a person could agree to enter the contract and displayed in a ‘legible, prominent and unambiguous’ way in close proximity to where a person can agree to enter the contract.

Cancellation requirements

Under the exposure draft’s subscription rules, suppliers must provide a cancellation method that is easy to find and straightforward for subscribers to use, and the process may require only those steps that are reasonably necessary to end the contract and protect the subscriber’s interest. If the subscriber entered the contract online, an online way to end it must also be available, regardless of whether other channels are offered. The EM notes that what is “reasonably necessary” will depend on the nature of the subscription and the industry. 

Reminders during subscription terms

Timing for reminder notices is different depending on the contract type. Generally, the reminder notices need to include the following disclosures:

• any payment obligations (e.g. the ongoing monthly price), including after the discount period ends (e.g. the full monthly price of the subscription) for free trial / promotional period contracts;
• the length of the contract (either the initial term or indefinite period);
• any notice period required to end the contract; and
• how to cancel the subscription.

For free trials or discounted subscriptions, the reminder notice also needs to include the date the discount period ends and the last date to cancel the subscription to avoid being charged, or charged the full price.

The EM recognises that the three types of subscription contracts are not mutually exclusive, and the notification obligations related to one particular contract may relate to more than one type of subscription contract.

Pricing obligations

The price related provisions in the draft legislation impose obligations on suppliers to disclose the amount of transaction-based charges in close proximity to the ‘base price’ of goods or services, if those charges can be calculated (or if they can’t be calculated, disclose the method for calculating any transaction-based charges). The intention of the provision is to prevent suppliers drip feeding additional charges as a consumer moves through the purchasing journey.

In most cases, the method for calculating a transaction-based charge will involve disclosing whether the charge is a percentage of the base price, or a fixed charge (e.g., $7 transaction fee, irrespective of the base price, or 2% of the base price). Additionally, it must be clear in what circumstances a transaction-based charge will apply (for example, if some payment methods are free, but credit card transactions incur an additional charge, this must be clearly displayed).

Are there any exemptions?

The Draft Bill expressly excludes several types of contracts from the general UTP prohibition, including property leases and licences, hire-purchase agreements or payments in instalments, contracts for the supply of prescription healthcare, or for childcare or education services.

Recurring donation arrangements with not-for-profit organisations and charities are specifically excluded from the ban on subscription traps and its related obligations as these apply only ‘in trade and commerce’.

In addition, while the general UTP prohibition will only apply to dealings with consumers at this stage, and the Government has proposed to undertake further consultation to determine the best approach to protecting small businesses, the more specific ban on subscription traps does apply to small businesses who enter into standard form contracts.

How long do I have to get ready?

While the new laws may be some time away from being enacted as law (proposed to occur on 1 July 2027), recent ACCC enforcement action against HelloFresh, Youfoodz, Dendy Cinemas and EconomyBookings demonstrates that the ACCC will take UTP-style enforcement under existing ACL provisions if it considers traders have misled consumers.

The ACCC has raised concerns about subscription traps and drip pricing for some time – these have been key focus areas in the UTP reform process.

A subscription trap occurs where a subscription is structured so that ‘joining is swift and effortless while leaving involves added frictions or becomes confusing or emotionally loaded’ (see Andrew Leigh’s speech dated 1 December 2025, here). For example, making it easy to sign up for a subscription via an online method, while requiring that consumers call the business directly to cancel. The EM has also noted the concept of ‘confirm shaming’ where a consumer is unfairly made to feel bad about a choice (including stoking guilt or regret).

Drip pricing is when a business advertises a partial price, only to reveal the total price (including unavoidable fees) late in the purchasing process, instead of at the earliest opportunity (see our previous post on this issue here). The ACL already includes an obligation for businesses to display a single price including all known fees and taxes.

ACCC commences separate proceedings against HelloFresh and Youfoodz over alleged ‘subscription traps’

The ACCC has not waited for the new UTP laws to take effect before taking action against concerning conduct in the subscription space.

On 16 December 2025, the ACCC commenced separate proceedings against each of Grocery Delivery E-Services Australia Pty Ltd (trading as HelloFresh) and Youfoodz Pty Ltd (Youfoodz) for allegedly misleading consumers about subscriptions. HelloFresh offers weekly meal kits, while Youfoodz offers weekly ready-made meals. Both providers offer their services through a subscription model, with consumers able to sign up through their websites or smartphone applications.

The ACCC commenced its investigations into HelloFresh and Youfoodz in October 2024 after receiving a large number of consumer complaints.

In its media release on 16 December 2025, ACCC Commissioner Luke Woodward noted that the ACCC alleges the conduct ‘involved a suite of confusing and unclear subscription practices in breach of Australia’s consumer laws.’ The media release states that HelloFresh and Youfoodz advertised that new customers ‘could easily cancel subscriptions’ through their online account without incurring charges provided they cancelled before the specified cut-off date (where in fact, many consumers were still charged even where they cancelled before the first delivery). The ACCC also reiterated its focus on taking enforcement action against ‘confusing and complicated subscription cancellation policies’ and noted that such practices were ‘a matter of significant public concern’.

The ACCC has brought these ‘subscription trap’ proceedings under existing provisions of the Australian Consumer Law s 18 (misleading and deceptive conduct) and s 29 (false and misleading representations). The ACCC has not suggested there were unfair contract terms in the Hello Fresh/YouFoodz terms and conditions, though the ACCC has alleged that certain clauses were false or misleading.

Specifically, the ACCC alleges HelloFresh and Youfoodz:

• Made false or misleading representations on their websites, apps, FAQs and terms & conditions about consumers’ ability to cancel their subscription and how easily they could cancel their subscriptions.
• Engaged in misleading or deceptive conduct via statements made on the HelloFresh website and app which conveyed to consumers they would only be charged for their first delivery if they selected meals, when in fact when consumers clicked the button to progress to the meal selection screens, they were entered into an ongoing subscription and charged for the first delivery.
• Engaged in misleading or deceptive conduct via statements made on the Youfoodz website and app which conveyed to consumers who had taken steps to cancel their subscription in their online account settings that the first delivery was cancelled and they would not be charged, when in fact the first delivery could not be cancelled this way and they were still charged.

In addition to civil penalties, the ACCC is seeking compensation orders for affected consumers, publication orders, the implementation of a compliance program, and costs. The ACCC’s filings set out that the harm suffered by consumers included being charged for their first delivery in circumstances where HelloFresh/Youfoodz had represented that they would not be charged.

ACCC issues infringement notices for ‘drip pricing’ and other misleading practices

In mid-2025 the ACCC fined Dendy Cinemas $19,800 for alleged ‘drip pricing’ practices. The alleged drip pricing involved Dendy failing to show a total single price for movie tickets, including mandatory booking fees, early in the booking process. In its media release, the ACCC noted that Dendy displayed prices that did not include the unavoidable per ticket booking fee and did not display a total price for tickets until consumers reached the final stages of the online transaction.

The ACCC fines were imposed by way of infringement notice issued pursuant to the existing ACL obligation on traders to advertise a single price, while specifically referencing the UTP-style ‘drip pricing’ language in its media release. We explore the ACCC’s previous enforcement action against drip pricing, including against Dendy in our earlier post available here.

More recently in January 2026, the ACCC also issued two infringement notices totalling $39,600 to EconomyBookings for allegedly:

• failing to prominently display the total price for car rental services as a single figure that included the price of pre-selected optional extras such as “Roadside assistance”, “Last Minute Cancellation” and “Full Coverage”, and
• making a false or misleading representation that a pre-selected optional extra was included in a price for a car rental under the heading “Your rental car includes” when in fact the price did not include the price for the optional extra.

Again, the infringement notices were also issued by the ACCC pursuant to the existing ACL obligations in relation to advertising a single price and misleading representations. Although the ACCC did not expressly state that EconomyBookings engaged in ‘drip pricing’, ACCC Commissioner Luke Woodward emphasised in the ACCC’s media release that “all businesses, including online providers, should ensure that their pricing displays do not mislead consumers, or they may face enforcement action by the ACCC.”  

Where to now?

Treasury’s consultation process ends on 23 February 2026 and the proposed reforms are planned to become effective by 1 July 2027.

The Government has also confirmed that during 2026, it will continue to explore extending any unfair trading protections beyond consumers to small businesses and the financial sector.