Mastercard users to be told when free trials end in a bid to cut down on pricey unwanted subscriptions
More than 16.8million adults in the UK sign up to subscription services but consumers are wasting an average of £640 a year on unwanted subscriptions
MILLIONS of Mastercard customers will soon be notified when free trials of subscription services come to an end.
The move is a bid to stop people from being stuck with difficult to cancel recurring subscriptions.
More than 16.8million adults in the UK sign up to subscription services such as gyms, music and video streaming services and delivery services, according to Citizens Advice.
These often begin with an initial free trial, after which customers have ongoing payments taken directly from their bank account.
The charity says consumers are wasting an average of £640 a year on unwanted subscriptions.
But from April, Mastercard, which has more than 2billion card customers worldwide, is launching a new notification service that will warn people when their free trials are coming to an end.
How to make sure you're not being penalised for being loyal
THE best way to beat the loyalty premium is to check if you can switch and save.
These are some of the best websites to use to find a better deal on your provider. Remember though, if you are thinking about switching before your term is up then you could face an early exit fee.
- Broadband -
- Home insurance -
- Mobiles -
- Mortgages - or use a free broker such as to help you find the best deal
- Savings accounts -
This will require retailers and service providers to send cardholders - either by email or text - the transaction amount, payment date, retailer's name, and explicit instructions on how to cancel the trial.
In addition, all charges that appear on the cardholder's statement must include the retailer's website URL or the phone number of the store where the cardholder made the initial purchase.
But the alert will only apply to retailers supplying physical goods - and not to services.
So monthly shaving products would be covered, for example, but streaming services such as Netflix and Spotify won’t be.
Card provider Visa says it has runs a similar scheme since April 2015. But its scheme requires both retailers and digital service providers to notify users when free trials are coming to an end.
They also have to provide receipts to Visa card users detailing the transaction.
Mastercard chief franchise officer Paul Petta wrote in a blog: "For some consumers, a free trial is a great way to test out a new product and get comfortable with it before making a purchasing decision.
"And with so many merchants offering them, free trials are becoming the new norm.
"But sometimes a free trial can unwittingly turn into a recurring subscription that is difficult to cancel.
"These situations can be frustrating and costly for both consumers and their banks.
"The new rules will help in increasing transparency and ensure an outstanding experience for cardholders."
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Loyal customers meanwhile, are being charged a loyalty penalty of £1,440 per year.
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