In the digital age, the subscription economy has reshaped the way we consume products and services. From streaming platforms like Netflix to software services like Adobe, subscriptions have become a ubiquitous part of our daily lives. For many, subscriptions mean increased flexibility and greater options. But it’s not all rosy, particularly when it comes to subscription traps. Here, we’ve got everything you need to know about subscription traps, including how to avoid them.
Why do we all love subscriptions?
The sound Netflix makes when you open the app has become a familiarity, and subscriptions are now a cornerstone of modern commerce. They offer consumers access to a range of services at a predictable cost while providing businesses with an opportunity to maximise revenue. Companies like Netflix and Spotify have harnessed the power of subscriptions and revolutionised their respective industries.
The allure of subscriptions extends beyond these big names, however. According to Oberlo, the global online subscription market is expected to increase by 64.6%, hitting $120 billion (£91 billion).
A survey studying why US shoppers use subscription services shows that variety, comfort, convenience and accessibility were cited among their top motivations. Quality also plays a significant role, with as many as 12.4% saying subscription services offer better quality than they’re able to acquire elsewhere.
What is a subscription trap?
Subscriptions are great for using products and services – when you want them. Unfortunately, too many consumers have fallen foul of subscription traps over the years. A subscription trap is a deceptive practice where consumers unknowingly agree to regular product deliveries or services, often following a free or discounted trial period.
The trap lies in the difficulty of cancelling these recurring charges, with the terms and conditions often unclear or misleading. These traps can lead to unexpected charges and a sense of feeling trapped, causing financial and emotional distress for consumers.
According to a survey by Citizens Advice, as many as two million people in the UK struggle to cancel continuous payments for subscriptions. This only highlights how common these traps have become.
What impact do subscription traps have on our wallets?
The cost of subscription traps is high. According to the same Citizens Advice survey, half a billion pounds was spent on subscriptions that auto-renewed without people realising in the last year in the UK alone.
Beyond that, people in the UK spend over £300m a year on unused subscriptions. It’s an issue across the pond in the US, too. Just over half of consumers using subscriptions ended up with unwanted charges.
These traps can drain our finances, especially when you fail to notice them for an extended period. The financial impact is even more significant for those on tight budgets or facing financial hardships and can come as an unpleasant surprise when viewing our bank statements.
How can I spot a subscription trap?
Spotting a subscription trap can be challenging, but there are several signs to look out for. Let’s take a look at key things to look out for so you don’t fall into an unwanted and unnecessary subscription trap.
Discounts and free trials
Be wary of free or discounted trials that ask for your payment details upfront. These often automatically convert into paid subscriptions without clear notification. There’s nothing wrong with signing up for a free trial or discount, but make sure you log into your account afterwards and change the subscription setting so it’s not set to auto-renewal. Alternatively, set a reminder in your calendar a day or two before the subscription is due to expire so you don’t forget.
Read the Ts and Cs
We get it – terms and conditions are long and tedious. That’s why a staggering 91% of people consent to the Ts and Cs without even reading them properly. However, this can often end in frustration. Scrutinise the terms and conditions carefully because subscription traps often have unclear or misleading terms, especially around cancellation policies.
To check or not to check the box
Keep an eye out for pre-checked boxes or opt-out settings during the sign-up process. These can often lead to unwanted subscriptions. Even if it doesn’t lead to a subscription, you may end up receiving unwanted marketing material from the provider.
Check your bank statements
Lastly, monitor your bank statements regularly for any unexpected charges. If you notice a charge for a service you don’t recognise or didn’t knowingly agree to, it could be a subscription that you’ve paid for. Staying vigilant and informed is key to avoiding these traps.
What is the role of businesses and regulators?
Businesses have a fundamental role in ensuring that subscription terms are transparent and fair. This involves clearly stating the cost, duration and renewal terms of the subscription and making the cancellation process straightforward.
But the responsibility doesn’t end with businesses. Regulatory bodies also play a role in safeguarding consumers from subscription traps. In the UK, the Competition and Markets Authority (CMA) has been proactive in this regard, taking action against several companies for unfair subscription practices, including Microsoft Xbox and its use of auto-renewing.
The CMA’s actions serve as a reminder that businesses must adhere to consumer protection laws and that any breach can result in significant penalties.
Avoiding subscription traps with ScribePay
In the complex world of subscription traps, ScribePay helps you avoid paying unnecessary costs. Imagine having a personal assistant that keeps track of all your subscriptions, ensuring you never lose sight of where your money is going. That’s what ScribePay does for you.
We help you manage all your subscriptions in one convenient place and alert you if the cost of a subscription is due to increase. This makes cancelling subscriptions you don’t intend to continue or no longer need easy and entirely hassle-free.
Don’t fall for the trap
Vigilance and having access to information are key to avoiding subscription traps. As consumers, reading the fine print, keeping track of our subscriptions and using tools like ScribePay to help us navigate the subscription landscape make a difference. By doing so, you can enjoy the benefits of subscriptions without falling into the traps.