Consumer harm from subscription traps worsening

Citizens Advice finds consumer harm from subscription traps is worsening and warns the Government’s plans to fix the problem will fail

More than 13 million people – or 26% of UK adults – have accidentally taken out a subscription in the last 12 months for services, new research from the consumer advice charity has found. 

It estimates unused subscriptions have cost consumers £688 million in the last year, up by £382 million since it last looked into the problem at the end of 2022.

Of those who ended up with an accidental subscription, 40% said it renewed automatically without their knowledge.

This was followed by 39% who took out a subscription for a free trial but forgot to cancel it later, while 24% thought they were making a one-off purchase.

Alex Neill, co-founder of Consumer Voice, said:

‘Preying on consumer inertia or deliberately misleading consumers to prop up profits is completely unacceptable. Regulators across all consumer markets have repeatedly said businesses have to be transparent and fair to customers. 

If this isn’t happening at the point of purchase or renewal for any subscription service then action must be taken and consumers should be compensated.’

Subscriptions were accidentally taken out for services including fitness apps, food delivery services, repeat pet food purchases and magazine subscriptions. Opinium surveyed 3,000 UK adults between January 26 and February 1.

Consumer support a ban on automatic subscriptions 

Citizens Advice warned that the failure to tackle subscription traps was not only a risk to consumers, who could end up parting with more money than they originally bargained for or could afford, but is also harming businesses.

More than half of people (54%) said they had decided not to sign up for a subscription due to concerns about how difficult it would be to cancel.

The charity found 74% of UK adults supported a ban on automatic subscription renewals where consumers had not actively agreed to it.

Government clamp down on subscription traps

It is calling on the Government to clamp down on the practice in the upcoming Digital Markets, Competition and Consumer Bill.

It wants to see consumers given the choice over whether their subscriptions are subject to automatic renewal, and over whether they want to continue to use a subscription service at the end of a free trial.

The government has previously estimated subscription traps are estimated to cost consumers £1.6 billion a year. Proposals in the bill will make it easier for consumers to exit subscription traps when a free trial or introductory offer comes to an end. 

Citizens Advice is calling on the government to do more

Citizens Advice chief executive Dame Clare Moriarty said: ‘With budgets increasingly squeezed and living costs often exceeding the amount people have coming in each month, it’s vital consumers feel in control of their spending.

‘Companies relying on people forgetting to cancel at the end of a free trial is an unacceptable business model that exploits busy, cash-strapped consumers.

‘While the Government has acknowledged subscription traps are a problem that need to be fixed, the plans laid out in the upcoming Consumer Bill risk failing to fix them.

‘We need to see the root cause of subscription traps tackled head on. Consumers should be offered a choice over whether their subscriptions auto-renew and whether they want to continue after a free trial.’

New law for subscriptions traps expected this year

A Department for Business and Trade spokesman said: ‘We know it’s frustrating to find out you’re still paying for something you weren’t expecting.

‘That is why we are delivering legislation this year that will ensure consumers have clear information about their subscription terms and can exit unwanted subscriptions easily, giving them peace of mind and greater control of their cash.’

The bill is expected to become law in autumn 2024.