Culture, Media and Sport select committee chair Caroline Dinenage has raised concerns over a lack of government action to ensure its new consumer protection legislation does not adversely impact charities.
Speaking during a debate in parliament this week Dinenage warned that the government has “been very slow to tweak well-meaning and necessary consumer protection legislation despite the imminent impact of the Digital Markets, Competition and Consumers Act 2024 on membership charities’ cashflows”.
Charities are concerned that the law, which comes into force next year, could lead to a loss of membership subscription revenue.
Through the legislation the public will be able cancel a subscription during a two-week cooling off period, which would harm charities finances as they would be forced to change their membership arrangements.
Dinenage said: “Fundamentally, the Act alters the way that membership charities process memberships and the benefits of them, leading to a potentially huge loss in revenues at a time when charities’ finances are already overstretched.”
In her response civil society minister Stephanie Peacock said the government has consulted on secondary legislation through the Act and “has since been engaging regularly with the sector to understand its concerns better and make sure its voices are heard”.
She added that the government continues to “consider these issues, particularly the cooling-off period and the additional administrative costs”.
Chartered Institute of Fundraising director of policy and communications Claire Stanley welcomed Dinenage’s comments as “a positive step forward towards rectifying the many challenges charities and non-profit associations are facing” through the Act.
The fundraising body is calling for charitable donations that qualify for Gift-Aid to be excluded from the Act, a waiver that limits misuse of the cooling-off period, and co-creating guidance with the Department of Business and Trade that alleviates administrative burdens.
“We remain committed to working with government departments, charities and non-profits to find a way forward that will ensure donors continue to receive the highest standards of consumer protection, whilst allowing this essential source of income to thrive,” added Stanley.
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