A subscription trap is where people are lured in by a free trial or discounted fee but don’t get around to cancelling the service or have difficulty cancelling the service. In the UK, the government has identified subscription traps as a £1.8 billion cost to consumers on a yearly basis, and in this current cost of living crisis consumers need to be informed and better protected.
This article covers how people get into a subscription trap and the tools you can use to ensure you are always in control of your money.
How do people get into subscription traps?
The simple answer is through free trials or introductory deals.
Almost every subscription in the world has a free trial or some type of introductory deal. We welcome this, and in this current cost of living crisis, consumers can save money accessing services through this model. The problem with these deals is that you need to provide your full card details at the checkout in order to get a service that is supposedly free. In addition, what most people don’t realise is that by giving your card details you are signing into a continuous payment authorisation (CPA) with the merchant.
The merchant is allowed to charge your card based on the advertised auto-renewal amount until you cancel the service (CPA)
What is Continuous Payment Authorisation?
One of the big problems with continuous payment authorisation is that 1 in 4 consumers don’t know they have signed up for a subscription. A good example- you purchased a ticket on and to get a certain amount off your next train fair you are asked to sign up for a Cashback site. However, you don’t know by accessing the service you are signed into a £15 monthly recurring payment.
Another issue is the cancellation process. Based on our own primary research, it takes less than 3 minutes to sign up, but when it comes to cancelling the process can be extremely difficult.
- Presented with multiple screens as part of the cancellation process
- Need to call a premium customers service to cancel
- Finally, go through the painful process of cancelling but still get charged
Making payments online to unfamiliar merchants or trying a subscription service should not leave you unexpectedly out of pocket. We believe there are tools and tips you can use to have more control and peace of mind over your money.
Manage your subscriptions from one app.
Say goodbye to forgotten missed trials, missed payments and unwanted charges.
Manage your subscriptions from one app.
Say goodbye to forgotten missed trials, missed payments and unwanted charges.
How to prevent Subscription traps?
An unrealistic approach is to only use your card details with merchants you know. However, well-known merchants like Amazon Prime have customers in subscription traps. You select quick delivery for goods, but don’t realise you are signing up for Amazon prime at the same time.
Another approach is to track every subscription, even the free trial to know when it is about to auto-renew and cancel the subscription before being charged. This approach should work for most subscriptions, but it is time-consuming. Plus, your money is not 100% protected, in the scenario where you have subscribed by accident.
With our ScribePay app, we put the power back into your hands by alerting you before any money is taken from your account. Plus, because this is a more secure way of subscribing online it will give you the freedom to try new services.
How ScribePay can help you avoid traps
We’ve built ScribePay Premium to help you automatically track any subscription the minute you opt-in. Get reminders few days before the trial is due to expire so you don’t forget to cancel.
Even if you forget to cancel, with ScribePay Premium App you make the ultimate decision about who takes money out of your account. For the first time, you’ll have the ability to approve or decline free trials turning into auto-renewals, subscription price increases, and stop subscriptions in two clicks.
Editor’s note: Don’t fall into subscription traps. Check out our ScribePay app that helps you track and manage all your subscription payments, while Premium users can get an instant bank account (UK) and virtual prepaid card (UK) to approve/decline payments on the fly. Welcome to the future of subscription payments.
