Half a billion pounds spent on subscriptions that rolled over without people realising during the cost-of-living crisis
Four in five (80%) people in the UK in support of the banning of auto-renewals
Half a billion pounds has been spent on subscriptions that auto-renewed without people realising in the last year, according to new research from Citizens Advice.
The charity, which is calling for a ban on subscription auto-renewals, warns that many contracts rollover automatically, without a customer needing to give consent. This can lead to people being trapped in unwanted or unused subscriptions for months and even years. Calls for a ban on auto-renewals are supported by four in five (80%) people in the UK.
Citizens Advice found that people in the UK spend over £300m a year on unused subscriptions, with over four fifths (82%) of people with an unused subscription reporting that it had auto-renewed.
Caught in a trap
Subscriptions - which can include services such as TV streaming, newspapers/magazines, food/drink, and beauty products - are a growing market. Three in four people in the UK (73%) have at least one subscription. However, the way that they are sold can leave some feeling like they are unwittingly caught in a trap.
Techniques include luring people in with a free trial - after which they have to cancel but many don’t remember to - and burying future costs and exit fees in the small print of terms and conditions. Through its research, Citizens Advice found one in four (26%) have signed up to a subscription by accident, with most doing so because they didn’t get round to cancelling a free trial.
Worryingly, the charity found that this is having a greater impact on people in already difficult circumstances. Citizens Advice found that almost half (46%) of people with mental health problems have signed up to a subscription by accident. The charity also found almost half (45%) of people on Universal Credit had signed up to one accidentally.
When trying to cancel a subscription, customers are often met with unnecessary barriers or pushback. One in five (21%) people who tried to cancel a subscription found it difficult to do so, with a third (35%) only wanting a free trial in the first place. While it may only take a single click to sign up, there may be no option to close an account online. When trying to cancel, customers may find that there’s a minimum period before they can leave, be asked to pay an early exit fee, or offered an incentive to stay.
Subscription traps adding to cost-of-living and mental health pressures
All of this puts extra pressure on already stretched budgets during the cost-of-living crisis. The charity found that two thirds (66%) of people currently paying for unused subscriptions have cut back on essentials over the last six months.
With the crisis significantly impacting household finances and people’s mental health, having to deal with an unwanted subscription can add extra pressure. A third (33%) of people who are currently feeling anxious as a result of their financial situation have fallen into a subscription accidentally in the last year.
The government has announced plans to tackle subscription traps, with reminders sent at the end of free trials and at the point of renewal, but Citizens Advice is calling for the problem to be addressed at the root with a ban of automatic renewals. In a newly released report, the charity also wants to ensure that customers are asked for their consent at the end of a free trial before being put onto the paid subscription.
Dame Clare Moriarty, Chief Executive of Citizens Advice, said:
“With budgets increasingly squeezed and everyday living costs spiralling, it’s vital consumers feel in control of their spending. But many are currently feeling trapped in unused or unwanted subscriptions that can be difficult to break free of.
“Whilst the government’s plans to tackle subscription traps are a positive first step, they don't go far enough. More can and has to be done.
“Banning auto-renewals and ensuring people have to opt in, rather than opt out of subscriptions after receiving a free trial would lead to safer and better designed subscriptions, and would save consumers millions of pounds.”
Citizens Advice has seen a number of situations where consumers have been drawn into subscriptions with free trials or introductory deals that they've then struggled to get out of:
Simon (available for print/online/broadcast media interviews) signed up to a dating website subscription for a year. He met 'the love of his life' and had no plans to renew his subscription, but received an email saying he owed £358 - his membership was automatically renewed without his knowledge. He is still being chased for payment and has been threatened with a possible debt collection agency.
Adam signed up online for a newspaper subscription which gave him three months access for free. He wanted to cancel but the only way to do this was to call during business hours. He had to call whilst at work and it was impossible to get through.
Sally bought some activewear from an online retailer for her son, and was automatically signed-up to a VIP subscription that cost £55 per month. She felt like the only option available to cancel was through a web chat. Whilst she has been refunded, she was left feeling angry that the subscription wasn’t made clearer to her when purchasing the clothing in the first place.
Citizens Advice’s top tips to help people avoid getting caught in a subscription trap:
Know what you’re signing up for - Before signing up to anything, make sure you know what you will actually get, how long you’re committing to and what it will cost. There should be no pre-ticked boxes for any payments, as they aren’t allowed.
Set a reminder - If you sign up for a subscription with a free introductory period, set a reminder for a week before the free period ends so you don’t forget to cancel if you decide you don’t want the subscription to continue.
Check the T&Cs - Want to cancel? Check the terms and conditions to see what you need to do - such as, how much notice you need to give. When cancelling, give the company your details, membership number, product/service name, date when the subscription started and your request to cancel. Ask them to acknowledge your cancellation.
Check your bank account - To see which subscriptions you’re paying for, check your bank or credit card account. If you find subscriptions you don’t want, contact the company to cancel them.
Amidst a cost of living crisis, subscription traps are just one area of online spending where the charity warns customers are being tricked into spending more than they want or can afford. Citizens Advice is calling for greater oversight of how websites and apps lead consumers to purchases, so that people are better protected across a range of areas, including online gambling and Buy-Now-Pay-Later credit.
For more information, read the ‘Tricks of the Trade’ report.
Notes to editors
- All data referenced in this release, unless otherwise stated, is from nationally representative polling of 3,002 UK adults commissioned by Citizens Advice and conducted by ICM Unlimited between 11 - 21 October 2022
- ‘Half a billion pounds spent on subscriptions that auto-renewed without people realising in the last year’ - calculated using (1) the nationally representative polling commissioned by Citizens Advice and conducted by ICM Unlimited to obtain (a) the percentage of UK adults with subscriptions, (b) the proportion of people with a subscription who have had a subscription auto renew without realising and (c) the average amount spent on these subscriptions; and (2) the estimated UK adult (18+) population in 2022 of 53,200,200 taken from the Annual Population Survey estimates via Nomis. This method was used to give an estimate of the number of UK adults with subscriptions (38,836,146), which was used to calculate the number of UK adults who had paid for a subscription via autorenewal without realising (7,767,229) in the past year. This figure was then multiplied by the individual mean £ average of spend on accidentally auto renewed subscriptions per year (£64.37), calculated from the ICM polling data. This gives a figure of £499,976,543.60.
- Citizens Advice is calling for a ban on automatic renewal of fixed term subscriptions - instead calling for people to be asked to give active consent before a contract renews onto a new fixed term. Some subscriptions could be exempt from a ban, including ones linked to prescriptions or insurance, where there could be harm from having a gap in provision. For rolling contracts, such as those which are paid monthly with no end date, customers should be asked to give consent for the contract to continue on at least an annual basis, but not necessarily every month.
- Citizens Advice is made up of the national charity Citizens Advice; the network of independent local Citizens Advice charities across England and Wales; the Citizens Advice consumer service; and the Witness Service.
- Our network of charities offers impartial advice online, over the phone, and in person, for free.
- Citizens Advice helped 2.55 million people face to face, over the phone, by email and webchat in 2021-22. And we had 40.6 million visits to our website. For full service statistics see our our monthly publication Advice trends.
- Citizens Advice service staff are supported by more than 18,500 trained volunteers, working at over 2,500 service outlets across England and Wales.
- Citizens Advice is the largest provider of free, multi-channel debt advice. Providing that help gives Citizens Advice unique insight into the types of debts people struggle with.
- You can get consumer advice from the Citizens Advice consumer service on 0808 223 1133 or 0808 223 1144 for Welsh language speakers.