Beware of subscription traps

September 6, 2016

Have you ever worked out how much you are spending on regular subscriptions? You may be paying a monthly fee to a gym you rarely or never use or have signed up to a “free trial” online but never unsubscribed when the free period ended. You should review any subscriptions you have once or twice a year to make sure you are not wasting money.

Review your subscriptions regularly
  • Review your monthly bank or credit card statements and work out exactly how much you are paying for regular subscriptions. These could include online subscriptions to a newspaper, video or music streaming service, donations to a charity or gym membership.
  • Ask yourself: do I use this service regularly or am I paying for something I get no benefit from?
  • If you are spending money on a service you never use, see if you can unsubscribe from it. However, you may have signed up for a period of time without knowing it and you may not be able to cancel until the term is up.
Remove unwanted subscriptions if you can
  • Increasingly, subscriptions are set up as a recurring charge on your debit or credit card as opposed to a direct debit. You cannot cancel a recurring charge with the bank (as you can with a direct debit) so you must cancel directly with the company.
  • Contact the company to cancel the recurring charge. This should be done in such a way so that you have proof that you asked them to cancel your subscription. This can be in writing, by email or letter but also in some sectors such as telecommunications, a phone call will do. In this case just make sure you make a note of when you made the call.
  • Check your bank/payment card statements to see that a recurring charge that you have cancelled is no longer being taken out of your account.
  • If that doesn’t work, you may want to contact your card provider (usually a bank), and look for a chargeback on your credit card account. You should also provide evidence to your bank that you have attempted to contact the company to cancel the subscription but have not been successful, for example, send them a copy of emails you have sent to the company. If all else fails, your last resort may be to cancel your card and apply for a new one. You should also continue to apply for the chargeback.
  • If you request a chargeback and you are not happy with the response from your card provider, you can make a complaint to the Financial Services Ombudsman.
 Watch out for subscription traps online
  • Online subscriptions generally involve an eye-catching advert for an offer such as a free or low-cost trial of a product, or cashback on your next purchase.
  • To claim the offer you are asked to enter your credit card details, for example, to pay a small shipping fee or to get your future discount.
  • Read the small print as this should detail the terms and conditions of the offer that you are signing up to.
  • Also, the terms and conditions may specify that you only have a certain timeframe to cancel (usually 14 days) if you change your mind.
  • Sometimes, the advert on the website may not be for the same company. So when you click on the advert you are actually brought to the website of another company to sign up with them. Without realising, you have authorised this company to take the monthly subscription fee from your account so check the url at the top of the page so you know who you are signing up with.
  • All EU-based businesses must provide clear information to consumers about the cost of goods and services, including the right to cancel when you are buying online.
  • However, you should be aware of companies who
    • are not upfront about additional costs such as subscription fees.
    • do not clearly disclose the nature of subscription services.
    • do not make the terms and conditions readily available by hiding them away on separate pages, in hard to read grey text or fine print.
    • place restrictions on the cancellation of the unwanted services.
    • use pre-checked boxes that require consumers to actively opt out.
Avoid subscription traps
  • Ask the company if you can pay a subscription using a direct debit, as unlike a recurring charge, you can cancel a direct debit directly with your bank.
  • If you are given a limited time to cancel the agreement, make sure you do so before the specified date. You could set a reminder in your phone to unsubscribe when the free period ends.
  • If you see an attractive advert online, don’t commit to the offer without spending time reading the full terms and conditions.
  • Know exactly what company you are signing up with. Take a look to make sure they have listed their contact details on the website such as a physical address, telephone number and an email address.
  • Never provide bank details to a company you don’t know without doing some research on them beforehand. Search the company online to see if there are any negative reviews. Don’t sign up if you have any doubts.
  • If signing up for a trial, make sure you know what happens after the trial period ends. In many cases, you have to cancel the subscription yourself. Otherwise, the free trial period may automatically rollover to a subscription where you pay a monthly fee.
  • Check your bank/payment card statements regularly for unexpected payments or charges.
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