Have you ever been lured in by a free trial? Only to later forget to cancel the subscription before the money left your account and it was too late? You’ve not only lost money, but now you’re auto-enrolled into a subscription you didn’t want to commit to in the first place. You then have to go through the hassle of cancelling the subscription, but even that is tricky.

You’re not alone. In the last 12 months, 1 in 4 consumers have ended up in a subscription without intending to. Of those, 44% of people who had unintentionally taken out a subscription signed up for a free trial and forgot to cancel. And 1 in 5 subscription users have found a subscription auto-renewed without their knowledge.

For years now, we’ve been calling for more to be done to protect people from falling into subscription traps. Whilst subscriptions can bring many benefits to people’s lives, they can also be designed to make it far too easy for consumers to be locked into paying for a product that they don’t use or, worse, didn’t want in the first place. Our recent research found that:

• 1 in 10 people are currently paying for a subscription they do not use.
• Of these consumers, 65% are paying over £132 a year for unnecessary subscriptions
• 1 in 5 people who have tried to cancel a subscription found the process difficult.

It’s designed to be difficult

Subscription models are very attractive to firms from an income generation perspective. Businesses want to make it as easy as possible for people to sign up to a subscription and want to maintain customers. But this can result in slippery design practices, or subscription traps. For example, firms might use design tactics that make the journey into a subscription effortless, but make their cancellation processes overly difficult, by putting unnecessary barriers or friction in the way. This is also referred to as ‘sludge’. You’ve probably come across practices like this, like where it takes just one click to sign up to a free trial or subscription, and yet there is no option to close the account online. Or when trying to cancel, you might have been offered incentives to stay, or been asked to pay an exit fee. These tactics can leave many stuck in unwanted subscriptions.

Katy’s* story

Katy* fell into a subscription trap after signing up to a free trial. Katy was a full-time student at the time and due to her busy study schedule and mental health problems, she forgot to cancel her free trial before the money was debited from her account. When the free trial ended she was automatically enrolled into the subscription and charged for the full year. A cost she simply couldn’t afford. Katy attempted to email the company to get a refund and cancel the subscription, but there was no reply. She then had to phone customer service which she found really hard due to her anxiety and depression, but she still didn’t get the help that she needed. The experience made her anxiety much worse, and she also ended up in her overdraft as she didn’t have the money to cover the annual subscription cost. Katy said she didn’t even need the subscription in the first place and regretted signing up to the free trial.

Finally, an end to the traps?

There is finally an opportunity to address subscription traps. The government is currently passing new laws through the Digital Markets, Competition & Consumers (DMCC) Bill. This will include new rules for subscriptions. If it goes ahead, the bill will improve some aspects of subscriptions, but it will leave gaps leaving some of the key issues causing frustration to consumers unaddressed.

So what will the bill mean for people?

The government is taking important steps forward around cancellation…

You’ll be glad to hear that the bill includes plans to make cancellation easier. This includes ensuring people have a straight-forward mechanism to cancel the subscription contract without any unnecessary or unreasonable steps. A key part of this is ensuring that when a subscription is entered into online, consumers will be able to cancel it online. So no more, unnecessary hours wasted on hold. These provisions are vital for safeguarding people against complicated cancellation processes. It is important that these make it into legislation to make it easier for people to escape subscription traps and to keep money in their pockets.

…but the bill must go further to give customers greater choice and control over their subscriptions

These are positive steps in the right direction, but the Bill could do even more to stop people from falling into subscription traps in the first place by tackling free trials and auto-renew. At the moment the bill only takes very limited steps on these, with new requirements around reminder notices. And while reminder notices may help to resolve issues around auto-renewal payments being taken without the customer’s awareness, they can only go so far and risk being largely ineffective. The consequences of this results in a lot of harm to consumers remaining unaddressed. There are three key changes that are needed to make a difference:

• Giving consumers a free choice over whether they would like to continue at the end of a free trial;
• Giving consumers an explicit choice when signing up over whether they would like their subscriptions to be subject to auto-renewal
• Allowing people to change their mind about auto-renewal with a single click

These changes would stop consumers from falling into costly subscriptions by accident, and would provide people with more choice and control over how subscriptions are set up.

Why is this so important?

Free trials are currently one of the key gateways for consumers falling into subscription traps. This could be easily resolved by giving consumers a choice over whether to continue, rather than automatically enrolling them. This will allow consumers to have more control over whether or not they want to continue with the subscription when the free trial is due to end. And it will mean many people won’t lose money on subscriptions they don’t actually want.

Auto-renewal is causing people to lose money. We previously found that £500m a year is spent on subscriptions which auto-renew without people realising. The current DMCC Bill proposals attempt to deal with this issue through reminder notices, but this just isn’t enough to protect people from subscription traps entirely. And crucially, people want a choice! 4 in 5 people in the UK support government rules being put in place to ensure they have a choice about whether a subscription automatically renews. This would give consumers much more control over how they spend their money.

People have had enough of subscription traps. The Consumer Bill could bring an end to them, but at the moment it risks being a missed opportunity.

Share your subscription trap experience with us!

We’re keen to hear from you if you’ve experienced problems due to subscription traps. Your stories will really help us to continue to build our case on why the bill needs to go further to protect consumers. For more information about this and to share your story, please click here.

* Katy’s name has been changed for anonymity purposes.