The heads of the Victoria and Albert Museum, the National Trust UK and, according to The Times, the Tate, have warned the UK government that new consumer legislation could sabotage their lucrative membership schemes.
The UK-wide Digital Markets, Competition and Consumers Act (DMCCA) allows consumers a two-week “cooling-off” period during which they can cancel organisational memberships and receive a full refund. The act, which received royal assent under the previous Conservative government, is due to come into force next year.
In a letter seen by The Times, representatives from some of the UK’s largest cultural organisations told the UK Prime Minister Keir Starmer that the DMCCA has not only “put at risk our ability to claim gift aid on memberships, but it creates onerous new burdens”. The letter continued: “This threatens to cripple the very future value of membership itself as a functional model of income generation for charities with visitor models, currently worth hundreds of millions [of pounds] to charities across the UK every year.”
As Frances Morris, the former director of Tate Modern, recently pointed out in Towards the Ethical Art Museum: “Membership schemes are also a huge part of the museum economy. Tate membership is probably the single biggest driver of income beyond grant-in-aid. What we know about membership schemes suggests that while they are superficially transactional, they are also built on love and respect.”
The Art Newspaper understands that the DMCCA sets out new requirements regarding subscription contracts, including the new “cooling off period” and new requirements around reminder notices, both of which could have implications for cultural organisations which have millions of members. The new obligations are covered in Chapter Two of the Act.
A National Trust spokesperson says: “Up to now membership has been treated as a charitable donation by law and this is part of a long-held recognition that UK charities are fundamentally different from commercial businesses. Charities are currently facing sustained financial pressures, due to the difficult economic climate.
“This legislation would add to that cost burden and see more charities having to reduce their vital services. Just last month the government made a firm commitment through the Civil Society Covenant to support our sector: closing this loophole would be a clear demonstration of that commitment.” The National Trust has 5.38m members according to data from February 2024, with an individual membership priced at £96 per year.
A government spokesperson tells The Art Newspaper: “We are engaging with charities on this issue. The Digital Markets, Competition and Consumers Act does not change the definition of what constitutes a consumer contract. Our plans to protect consumers from rip-off subscriptions will not unfairly affect charities, and we continue to engage closely with them to understand their concerns.”
