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Following unanimous State and Territory government support, the Commonwealth is developing legislation that introduces both a general prohibition on practices manipulating consumer decision-making and specific bans targeting subscription traps and hidden fees. For businesses operating subscription services, multiple pricing tiers, or online checkout processes.
What is the unfair trading ban? Upcoming Commonwealth legislation prohibiting business practices that manipulate or distort consumer decision-making, with specific rules targeting subscription traps and drip pricing.
When does it matter? For any business with subscription services, online sign-up processes, checkout flows with additional fees, or consumer-facing sales processes, particularly where cancellation processes differ from sign-up ease.
Key insight: The legislation doesn't just target obviously deceptive practices. It captures design choices that exploit predictable consumer behaviour patterns, even where individual steps seem reasonable. What you thought was standard industry practice might create compliance exposure.
Why guidance helps: Understanding which of your current business processes fall within the ban's scope, what restructuring achieves compliance while maintaining viable operations, and how to position your business before enforcement begins determines whether you're proactively compliant or reactively responding to regulatory action.
Think through how your current subscription cancellation process compares to your sign-up process. If customers can sign up online in three clicks but need to phone during business hours to cancel, that asymmetry is exactly what the legislation targets.
Review your checkout flow for fees that appear only after customers have invested time in the purchase process. The timing of when mandatory fees become visible matters more than whether they're disclosed somewhere.
Consider whether your business practices would withstand the "manipulation test" - are you designing processes around how customers actually make decisions, or around exploiting predictable blind spots in decision-making?
Start identifying which practices you'll need to restructure and which might have legitimate operational justification. Getting ahead of this means controlling your implementation timeline rather than rushing to comply under regulatory pressure.
Consumer protection frameworks haven't kept pace with digital commerce. When the Australian Consumer Law was developed, businesses couldn't A/B test interfaces, track abandonment points, or design entire decision environments.
Research estimates Australians lose $46 million annually to subscription traps - services they're paying for but can't easily cancel.
Individual design choices often seem reasonable. Email confirmation processes security. Multiple reconsideration screens demonstrate value. Prominent headline prices focus attention. But when these combine to systematically exploit decision-making under time pressure, they become unfair trading.
At present it appears the proposed framework will operate at two levels - a general prohibition and then specific prohibitions to address specific practices.
General Prohibition
A principles-based ban on conduct that manipulates or distorts consumer decision-making, causing harm. This creates regulatory flexibility to address practices that don't fit specific categories but still exploit consumer vulnerabilities. For businesses, this means thinking about not just what you're doing but why, what behavioural pattern are you designing around?
Specific Prohibition - Subscription Trap Prohibitions
Specific requirements around subscription services: disclosing key terms before sign-up (not buried in linked terms and conditions), providing timely reminders at critical points (like when free trials end), and removing unreasonable barriers to cancellation. The working principle is that cancellation should be achievable through the same method used for sign-up.
If customers can sign up through your app, they should be able to cancel through your app. If sign-up takes two minutes, cancellation shouldn't take 28 days to process.
Specific Prohibition - Drip Pricing Prohibitions
Strengthened protections against fee disclosure timing that exploits sunk cost psychology. When customers have invested time progressing through your checkout flow, seeing mandatory fees for the first time at final payment creates pressure to complete despite the total cost being higher than expected.
The issue isn't whether fees are disclosed—it's when they're disclosed relative to when customers have committed time and attention. Fees that are genuinely optional (gift wrapping, expedited shipping) can appear at checkout. Fees that apply to every transaction (booking fees, service charges, delivery fees with no pick-up option) need disclosure when headline price is displayed.
Many business owners have heard about unfair contract terms legislation and assume the new unfair trading practices ban is just more of the same. It's not. The two regimes target fundamentally different things, and understanding this distinction matters because you need different compliance approaches.
Unfair Contract Terms: What's Written
The unfair contract terms regime (which strengthened significantly in 2023) focuses on the actual terms in your contracts. Terms that create significant imbalance in parties' rights and obligations, aren't reasonably necessary to protect legitimate interests, or would cause detriment if enforced can be declared unfair and void.
This is about what you've agreed to on paper. Automatic renewal clauses that lock customers in for extended periods. Terms allowing unilateral price increases. Clauses limiting liability in unreasonable ways. Provisions making it difficult to terminate or exit agreements.
Unfair Trading Practices: How You Behave
The new ban targets conduct and business practices—what you actually do in the course of dealing with customers, regardless of what your contracts say. Even if your contract terms are perfectly fair and clearly drafted, your business practices can still violate the unfair trading ban.
Examples of the difference:
What You Need to Check
For unfair contract terms compliance, you review your written agreements - standard form contracts, terms and conditions, service agreements. You're looking at whether individual clauses create unfair imbalances.
For unfair trading practices compliance, you review your operational processes - how customers actually interact with your business. Sign-up flows, cancellation procedures, checkout processes, fee disclosure timing, reminder systems. You're looking at whether the customer experience manipulates decision-making.
Many businesses have invested in reviewing their contract terms following the 2023 reforms. That's good work, but it doesn't satisfy unfair trading practices requirements. You need a different lens: not "what do our contracts say" but "how do our processes actually work in practice."
The practical implication is that legal review of documented terms won't identify unfair trading practice risks. You need to examine actual customer journeys through your systems - where friction points exist, when information appears, what steps customers must complete, how design choices affect decision-making. This often requires input from operations, customer service, and digital teams, not just legal review of written terms.
Subscription-Based Services
Gyms, streaming services, software subscriptions, membership platforms - any business where recurring billing is core to the model. Your sign-up process sets the benchmark for cancellation ease. App-based sign-up means app-based cancellation needs to work. Free trial conversions require advance notice before billing begins.
The legislation specifically targets "confirm shaming" - requiring customers to click through multiple screens with messages emphasising lost benefits before cancellation processes. One or two confirmation screens might be defensible for preventing accidental cancellations. Five screens with progressively better discount offers that weren't available during sign-up isn't.
E-commerce and Online Services
Any business with checkout flows where additional fees appear partway through the process faces drip pricing scrutiny. The question isn't just whether delivery fees, service charges, or booking fees are disclosed. It's whether customers saw them when comparing your headline price against competitors, or whether they only appeared after selecting products, entering details, and investing time in your checkout flow.
Professional Services and Ongoing Arrangements
Even businesses that don't think of themselves as operating "subscription" models might have recurring billing arrangements, retainer structures, or ongoing service agreements with auto-renewal provisions. The principles apply: if the arrangement involves recurring charges, customers need clear disclosure of terms, notice before renewal, and reasonable cancellation processes.
The government has indicated intention to extend protections to small businesses facing unfair conduct from larger firms, particularly in construction and food production contexts where power imbalances affect commercial negotiations.
Most businesses focus on whether they're technically disclosing required information. But the legislation targets how that information is presented relative to consumer decision-making processes. Terms buried in privacy policies accessible via footer link don't satisfy disclosure requirements.
The "same method for cancellation as sign-up" principle sounds straightforward until you examine current practices. The challenge is distinguishing genuine operational requirements from processes that accumulated because they reduce cancellation rates.
When regulators examine whether practices manipulate consumer decision-making, they'll consider your commercial rationale. "Industry standard practice" isn't a defence if the industry standard developed around reducing cancellations rather than operational requirements.
Businesses underestimate timing. Legislation is expected in 2026, but restructuring subscription systems, redesigning checkout flows, and updating operational processes takes longer than most businesses plan for.
For franchise or multi-location operations, consistency is critical. If your brand promises easy online sign-up but franchisees make cancellation require phone calls, you've created network-wide exposure.
This work involves understanding which of your current business practices may fall within the legislation's scope, assessing what changes might achieve compliance while maintaining viable operations, and restructuring processes before enforcement begins.
I work with business owners to review subscription processes, checkout flows, and customer-facing operations against expected legislative requirements. This includes identifying which practices need restructuring, which might be defensible with proper documentation of commercial rationale, and ensuring changes satisfy regulatory expectations rather than creating new compliance gaps.
Get advice if:
Professional guidance is particularly valuable when you're deciding which current practices need immediate change, how to document legitimate operational requirements, and ensuring restructured processes actually satisfy expected regulatory standards.
Legitimate operational requirements can justify some differences, but you'll need to demonstrate why your specific approach is necessary. Document your genuine operational rationale before regulatory scrutiny begins.
The ban appears size-neutral. If you operate subscription services or consumer-facing checkout processes within the prohibition scope, business size doesn't create exemptions.
Current focus is consumer protections, but government has indicated extending protections to small businesses facing unfair conduct from larger firms.
Industry standard practices don't create safe harbour if those standards developed around reducing cancellations rather than operational necessity.
Well before legislation passes. Waiting until requirements are finalised means restructuring under time pressure and training staff while regulators are watching.
