News Update


Can we stop being duped into purchasing subscriptions?

Simon, looking for love, purchased a one-year subscription to a dating service.

Fortunately for him, he met the “love of his life” within a few months.

However, his membership had been automatically renewed without his knowledge.

He was astounded to see that he was being pursued for £358 and threatened with a debt collection agency.

Simon’s tale is not rare. According to the Citizens Advice Bureau (CAB), hundreds of millions of pounds are wasted each year on unused memberships. The majority of those polled lately blamed auto-renewal.

Many of us have fallen victim to the “subscription trap,” which involves signing up for a free trial and then forgetting to cancel it, resulting in recurring payments for services we don’t use.

The government in the United Kingdom is taking steps to crack down on practices used by giant online shops to try to lock people into subscriptions.

It is proposing new rules that would compel businesses to send “reminder notices” to clients to ensure that they are aware that they are still subscribing.

The plans do not sit well with everyone. The government, according to Disney, is aiming to “micro-manage” the way subscription streamers engage with their clients.

US regulators have also warned corporations that methods such as hiding auto-enrolment messages violate consumer protection rules.

Amazon became the most visible target of that battle this month, when it was sued by the US on grounds that it duped customers into signing up for automatically renewing Prime subscriptions and made it impossible to cancel, charges that the online retailer denied.

‘I spent £6.99 over the course of 18 months.’
Subscriptions for everything from food delivery to contact lenses are now available, and the industry is expanding. Many companies provide a free trial period or discounts in exchange for consumers signing up.

However, those interviewed by the BBC said they believe they were unwittingly locked in because they failed to terminate their subscription after their free trial period expired.


For example, John told the BBC that he had signed up for Amazon Prime Video for a 30-day free trial period and then failed to cancel it when he realized he had to start paying for it.

“I’m just sorry I wasted £6.99 per month for 18 months.”

A successful business concept

According to Enders Analysis research analyst Claire Holubowskyj, auto-enrolment is a no-brainer for corporations like Amazon.

She claims that businesses can build their customer base by either investing consistently to develop their products or by subscription, which she describes as a “easier route.”

“The customer tries the product once and is then locked in, providing the company with a relatively easy revenue stream at no additional cost.”

According to Ms Holubowskyj, there has been a shift in consumer attitude in recent years, which means we are now accustomed to paying for items and services on a monthly basis. “It’s just the way things are now, and there are a lot of benefits for customers, especially with technology software, where updates are now just baked into the price.”

However, subscription models are not always a bad deal for customers, especially if they allow them to receive free products or discounts, and many businesses will notify clients when it is time to renew.

The UK government claims that its proposed law, the Digital Markets, Competition, and Consumers Bill, will “ensure consumers get a fair deal.”

However, Citizens Advice believes that it should go much further, calling for auto-renewals to be outlawed entirely and for companies to require individuals to opt in rather than opt out of subscriptions following a free trial.

“The government must recognize the financial strain on consumers.” “This has to be the beginning, not the end, of reforms,” says Matthew Upton, executive director of policy and advocacy.

John says he appreciates any effort to make it more difficult to be automatically renewed into a membership, but he is concerned that he will be ensnared again.

“It was a very stressful experience that left me with a lot of anxiety.” It’s crazy; these companies only care about money, not people.”



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