Personal Finance

How to avoid the subscription trap as £500m spend on unwanted accounts every year

Half a billion pounds has been spent on unwanted subscription services that auto-renewed, it has been estimated. Does this happen to you?

Citizens Advice is demanding a ban on auto-renewals for subscriptions after it found 82% of people with an unused account had been put on it automatically.

Subscription deals are a growing market and include TV streaming, newspapers, magazines, food, drink and beauty products.

Customers can often be lured into a subscription by taking up a free trial, which then rolls over into a paid-for service. Or they may have signed up for an account but see their subscription renewed automatically at the end of the term.

What's worse is these can even be charged at a higher price than was originally advertised due to yearly price rises.

One in four (26%) of people questioned had signed up to a subscription by accident, according to a poll of 3,002 UK adults, by ICM Unlimited for Citizens Advice, with most doing so because they didn't get around to cancelling the free trial.

The average UK household spends £60 on unwanted subscriptions, the Government estimates. with researchers ICM Unlimited calculating a more specific figure of £64.37.

Expanding its poll results to apply across the UK, Citizens Advice estimates this equates to £499,976,544 spent across the country on unwanted subscriptions.

People with mental health problems were more likely to fall victim to so called ‘subscription traps’, with almost half (46%) of people with a mental health issue signing up by accident.

Even those who did try to cancel their subscription in time found it a hassle. One in five people questioned found it difficult to cancel a subscription, with barriers including there being a minimum period before a customer can leave, an early exit fee, or incentives to stay. Some reported phone lines being jammed when trying to contact services to cancel.

Two thirds of those who said they had an unused subscription had cut their spending on essentials in the last six months, with the subscription traps putting an unnecessary burden on peoples’ finances.

Tips to avoid paying for unwanted subscriptions:

  1. Know what you're signing up for: Work out what you will get, for how long and for how much. Remember, pre-ticked payment boxes are not allowed.
  2. Set a reminder: Taking advantage of a free trial? Set a reminder a week before the free period ends so you don't forget to cancel.
  3. Read the small print: Check the terms and conditions to see how you cancel including how much notice you need to give. Citizens Advice says: "When cancelling, give the company your details, membership number, product/service name, date when the subscription started and your request to cancel. Ask them to acknowledge your cancellation."
  4. Check your bank account: Unsure what you're paying for? Check your bank or credit card statements, standing orders and direct debits. If you see something you don't want to be subscribed to, cancel it with the company. You may also be able to cancel the payment directly with your bank, although check your subscription terms and conditions.
  5. For further help and support, complain to the Financial Ombudsman.

The Government announced plans in April to force providers to send reminders to customers at the end of a free trial and at the point of renewal, and make it straightforward to quit subscriptions. But Citizens Advice wants further measures - with a full ban on automatic renewals and customers to give consent at the end of a free trial before being charged.

Dame Clare Moriaty, 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.”

Helen Barnett

Helen is a journalist, editor and copywriter with 15 years' experience writing across print and digital publications. She previously edited the Daily Express website and has won awards as a reporter. Read more here.


NimbleFins Newsletter

Get energy alerts, deals, tips, news, and more!