Half a billion pounds has been spent on subscriptions that auto-renewed without people realising in the last year, according to new research from Citizens Advice.
The charity, which is calling for a ban on subscription auto-renewals, warns that many contracts rollover automatically, without a customer needing to give consent. This can lead to people being trapped in unwanted or unused subscriptions for months and even years. Calls for a ban on auto-renewals are supported by four in five people in the UK.
Citizens Advice found that people in the UK spend over £300m a year on unused subscriptions, with over four fifths (82%) of people with an unused subscription reporting that it had auto-renewed.
Subscriptions – which can include services such as TV streaming, newspapers/magazines, food/drink, and beauty products – are a growing market. Three in four people in the UK (73%) have at least one subscription. However, the way that they are sold can leave some feeling like they are unwittingly caught in a trap.
Techniques include luring people in with a free trial – after which they have to cancel but many don’t remember to – and burying future costs and exit fees in the small print of terms and conditions. Through its research, Citizens Advice found one in four (26%) have signed up to a subscription by accident, with most doing so because they didn’t get round to cancelling a free trial.
Worryingly, the charity found that this is having a greater impact on people in already difficult circumstances. Citizens Advice found that almost half (46%) of people with mental health problems have signed up to a subscription by accident. The charity also found almost half (45%) of people on Universal Credit had signed up to one accidentally.
When trying to cancel a subscription, customers are often met with unnecessary barriers or pushback. One in five (21%) people 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. While it may only take a single click to sign up, there may be no option to close an account online. When trying to cancel, customers may find that there’s a minimum period before they can leave, be asked to pay an early exit fee, or offered an incentive
All of this puts extra pressure on already stretched budgets during the cost-of-living crisis. The charity found that two thirds (66%) of people currently paying for unused subscriptions have cut back on essentials over the last six months.
With the crisis significantly impacting household finances and people’s mental health, having to deal with an unwanted subscription can add extra pressure. A third (33%) of people who are currently feeling anxious as a result of their financial situation have fallen into a subscription accidentally in the last year.
The 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 is calling for the problem to be addressed at the root with a ban of automatic renewals. In a newly released report, the charity also wants to ensure that customers are asked for their consent at the end of a free trial before being put onto the paid subscription.
Dame Clare Moriarty, Chief Executive of Citizens Advice, 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.”
