Meal Kit Subscriptions Under Fire as ACCC Targets Alleged Cancellation Barriers

Australia’s consumer watchdog has taken Federal Court action against meal delivery giants HelloFresh and Youfoodz, alleging widespread use of misleading subscription practices that left tens of thousands of consumers charged despite attempting to cancel on time.

Subscription cancellation barriers under scrutiny as the ACCC targets digital business practices that may breach Australian Consumer Law.

The Australian Competition and Consumer Commission (ACCC) commenced separate proceedings on 16 December 2025, alleging both companies breached the Australian Consumer Law (ACL) through confusing sign-up and cancellation processes that obscured when consumers were entering into paid subscriptions.

What the ACCC Is Alleging

According to the ACCC, HelloFresh and Youfoodz represented to new customers that subscriptions could be easily cancelled online before a specified cut-off time for the first delivery. In practice, many consumers who followed those steps were still charged and received their first order.

Critically, the ACCC alleges:

• Consumers could sign up easily online, but could not cancel the first delivery online

• Cancellation often required speaking directly with customer service

• Thousands of consumers cancelled before the cut-off time but were charged regardless

• Payment details were required to view menus, despite representations that customers would not be charged unless meals were selected

The alleged conduct spans lengthy periods:

• HelloFresh: 1 January 2023 to 14 March 2025

• Youfoodz: 1 October 2022 to 22 November 2024

During those periods, the ACCC claims 62,061 HelloFresh customers and 39,408 Youfoodz customers were charged despite cancelling before the relevant cut-off time.

“Confusing and Unclear” Subscription Practices

ACCC Commissioner Luke Woodward described the alleged conduct as a suite of confusing and unclear subscription practices that caused significant consumer harm.

In HelloFresh’s case, the ACCC alleges some consumers were unknowingly signed up to an ongoing subscription simply by entering payment details to view meal options, without selecting any meals at all.

For Youfoodz, the ACCC alleges consumers were told via online account messages that their first delivery had been cancelled and they would not be charged, when in fact cancellation was not effective through that process.

Real Consumer Impact

The ACCC outlined individual consumer experiences that highlight the risks of poorly designed digital subscription models, including:

• Consumers discovering unexpected charges while experiencing financial distress

• Customers cancelling within minutes, only to receive delivery notifications and partial refunds

• Difficulty contacting customer service once payment had been taken

These examples reinforce the regulator’s warning that businesses must clearly communicate when a consumer is entering a subscription, how charges apply, and how cancellation actually works.

Why This Matters for Australian Businesses

Subscription-based business models remain a key ACCC enforcement priority for 2025–26, particularly in the digital economy, supermarket, and retail sectors.

From a compliance perspective, this case is a timely reminder that:

• Ease of sign-up must be matched by ease of cancellation

• Payment details should not be used to silently trigger subscriptions

• Representations made during onboarding must reflect actual system behaviour

• Dark patterns and friction-based cancellation processes attract regulatory scrutiny

The ACCC is seeking penalties, compensation for affected consumers, compliance programs, publication orders, and costs.

Need Help Navigating Consumer Law Risks?

Bane Legal Services is not a law firm and does not provide legal advice. However, with over 30 years of commercial experience, Bane Legal Services acts as a trusted legal matchmaker, connecting business owners and operators with the right consumer, franchising, employment or commercial lawyer for their specific circumstances.

If your business uses subscriptions, digital sign-ups, or recurring billing models, obtaining properly tailored legal advice is essential, particularly as regulatory expectations continue to rise.

Source: This article is based on an ACCC media release dated 16 December 2025: “HelloFresh and Youfoodz in court over alleged subscription traps”. All allegations remain before the Court.