Citizens Advice is calling for a ban on subscription auto-renewals after finding that many people had been lured in with a free trial and then forgotten to cancel. Worryingly, new research from the charity discovered that consumers have spent half a billion pounds in the last year on subscriptions that automatically renewed - without them realising.
Consumers in the UK spend a staggering £300 million a year on unused subscriptions, with 82 per cent of those paying out on one reporting that it had renewed automatically, the Citizens Advice study found. Subscriptions, which can include services such as TV streaming, mobile phone apps, newspapers and magazines, food and drink and beauty products are part of an ever-evolving market.
Nearly three in four people across the UK (73%) have at least one active subscription that they know about.
Citizens Advice said the way in which people are being sold subscriptions includes techniques such as luring people in with a free trial - after which many do not remember to cancel - and burying future costs and exit fees in the small print of terms and conditions.
One in four (26%) had signed up to a subscription by accident, with most doing so because they did not get round to cancelling a free trial.
One of the best ways to never get caught out with a free trial subscription is to create a note or alarm in your mobile phone diary to cancel it the day before it’s due to expire.
Most subscription services will contact you prior to the free trial period ends, but many do not.
Citizens Advice found that almost half (46%) of people with mental health problems had signed up to a subscription by accident, as had 45 per cent of people on Universal Credit.
One in five (21%) who tried to cancel a subscription found it difficult to do so, with a third (35%) only wanting a free trial in the first place.
Consumers had found that while it may only take a single click to sign up, there could be no option to close an account online and when trying to cancel there can be a minimum period before the customer can leave, an early exit fee or an incentive to stay.
The charity found that two-thirds (66%) of people currently paying for unused subscriptions have cut back on essentials over the last six months and 33 per cent of people who are currently feeling anxious as a result of the cost of living crisis had fallen into a subscription accidentally in the last year.
The UK Government has announced plans to tackle subscription traps with reminders sent at the end of free trials and at the point of renewal, but Citizens Advice said it wants a complete ban of automatic renewals.
The charity is keen to see providers contact people nearing the end of a free trial to ask permission to move them on to the paid subscription service.
Citizens Advice chief executive Dame Clare Moriarty said: “With budgets increasingly squeezed and everyday living costs spiralling, it’s vital consumers feel in control of their spending. But many are currently feeling trapped in unused or unwanted subscriptions that can be difficult to break free of.
“Whilst the Government’s plans to tackle subscription traps are a positive first step, they don’t go far enough. More can and has to be done.
“Banning auto-renewals and ensuring people have to opt in, rather than opt out of subscriptions after receiving a free trial would lead to safer and better designed subscriptions and would save consumers millions of pounds.”
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