Major crackdown on subscription traps that could save you £168 a year and make it easier to cancel
A MAJOR crackdown on subscription traps could save households up to £168 a year.
The Department for Business and Trade (DBT) wants to make it easier for people to cancel unwanted subscriptions and obtain refunds.
Nearly 10million active subscriptions in the UK are unwanted, costing consumers a staggering £1.6billion annually.
Subscriptions for anything from magazines to pet treatments often have complicated cancellation processes, like long wait times on phone lines and restrictive opening hours, leaving consumers feeling trapped.
These so-called 'subscription traps' mislead people into signing up through "free trials" or reduced-price offers.
If they don't cancel in time, they're automatically moved to an expensive payment plan.
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The DBT is now looking to simplify refunds and cancellation processes to make it easier for consumers to get out of unwanted subscriptions.
They aim to save people an average of £14 per month, or £168 a year, for each subscription they cancel early.
Business Secretary Jonathan Reynolds said: "Everyone hates seeing money leave their account for a subscription they thought they’d cancelled, or a trial that unexpectedly gets extended.
"We're looking to hear from as many businesses, consumer groups, and other interested groups as possible to allow us to set fair regulations that stop this corporate abuse of power whilst retaining the benefits of subscriptions for consumers and businesses."
The DBT is now looking at how refunds should be handled when a consumer wishes to exit a contract and how to effectively notify consumers about renewals or the end of a free trial.
It also wants to ensure that businesses have clear, user-friendly websites that simplify the cancellation process.
But be careful if you agree to a fixed-term contract, for example, a year’s gym membership.
Depending on your contract, you might still be required to make ongoing payments for that period of time or you might get hit with a penalty.
Speak to the company and say why you need to cancel, for example if you have moved house or are in financial difficulty.
CHECK YOUR PHONE BILL TOO
Some companies may add their subscription charges to your phone bill.
Most mobile providers also let you pay for apps, music, TV and video-streaming services, and gambling and gaming services.
You can be charged a maximum of £40 on a single purchase and up to £240 in each billing period.
You can cancel at any time by texting "STOP ALL" to a phone number you can get from your mobile provider. But it doesn’t always work.
According to regulator the Phone-paid Services Authority, one in four people who have made payments via their mobile bill had been signed up for a subscription without their knowledge.
And one in five of these customers said they couldn’t stop the service.
If you see strange charges, ask your mobile provider to cancel the payments and block third-party charges.
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Check your Apple, Google, Amazon or PayPal payment accounts and report subscriptions you don’t recognise.
They should cancel future payments, but you must contact the subscription service to get your money back and confirm you’re cancelling.
CUT SUBSCRIPTION COSTS
SUBSCRIPTION services can be a great way to access your favourite food, films, music and more.
However, rising prices mean they aren't always good for your bank balance.
There are several ways you can reduce some of the costs so you can continue to stream and subscribe without hurting your pocket.
- Pay annually: Sometimes, it can seem daunting to pay for a whole year's subscription all at once. But if you know you're going to stick with the service, it can save you money to pay in one lump sum.
- Rotate and downgrade: If you have multiple TV and film subscriptions, you could save money by rotating what you pay for each month. So, if you can plan what you want to watch, you could alternate which service you're signed up to and save.
- Buddy up: Sharing streaming subscriptions between households is one of the easiest ways to save money.
- Use free trials: Streaming services often let you try before you commit and will give you one month for free. Just remember to set a reminder to cancel before the end of the promo period so you don't end up with an unwanted subscription.
- Check for freebies: Hundreds of films and box sets are available via free streaming services such as All 4, ITVX, UKTV Play, and My5. You'll usually need to sit through ads, but the savings tend to make it worthwhile.