A HUGE rule shake-up to ‘subscription traps’ is set to help Brits save £400million a year, the government has announced.
New rules, expected to come into force early next year, will ensure customers receive reminders before free or discounted trials end or contracts of 12 months or more automatically renew.
Consumers will have to be allowed to cancel easily online if that is where they originally signed up, ending lengthy waits on hard-to-find phone numbers.
Under the new rules, consumers will also have a 14-day cooling off period after a free trial ends or when a contract auto-renews for 12 months or longer to receive a full or proportionate refund.
However, certain memberships of charitable, cultural and heritage organisations will be exempt from the new rules due to their role in preserving and providing access to locations and cultural collections.
Minister for Consumer Protection Kate Dearden said: “These new rules will put consumers back in control of their money – making subscriptions clearer, fairer and far easier to cancel.”
There are 155million active subscriptions held by consumers across the UK, with almost 10million of them believed to be unwanted.
More than 3.5million people are being “quietly rolled” from free or discounted trials into fully costed contracts, while another 1.3million are caught out by unexpected auto-renewals, the Government said.
These so-called “subscription traps” mislead people into signing up through “free trials” or reduced-price offers.
If they don’t cancel in time, they’re automatically moved to an expensive payment plan.
Some subscriptions often have complicated cancellation processes, like long wait times on phone lines and restrictive opening hours, which can leave consumers feeling stuck.
By making it easier to cancel unwanted services, consumers could save around £14 every month on average per unwanted subscription, or almost £170 a year, the Government added.
Which? head of consumer rights policy Sue Davies said: “Subscription traps can be costly and wreak havoc on finances that are already under strain from the cost-of-living crisis.
“The strengthening of subscription laws will be welcome news for those struggling with rising costs.
“These new rules will help put consumers in the driving seat with proper transparency and protection.”
Lord Richard Walker, the Government’s “cost-of-living champion”, said: “At a time when every pound matters, these new rules will give consumers the clarity and control they deserve.
“By stopping companies from quietly rolling people onto costly contracts and making cancellations far simpler, households can stay on top of their budgets and keep more of their money where it belongs: in their own pockets.”
Three ways to save on subscriptions
Rotate your subscriptions
Many of us end up signing up for multiple streaming services because we want to watch different films or TV shows.
But you can easily save by rotating your subscriptions.
Choose a few films or shows on one streaming platform that you’re planning on watching that month, then cancel the rest.
Kara Gammell, personal finance expert at MoneySuperMarket, said: “Cancelling or rotating subscriptions is a quick way to cut costs without feeling deprived, and you can always restart later.
“Think of it this way: Dropping two £10 subscriptions now is £20 back in your pocket for groceries or bills.”
Bundle up
Bundling subscriptions is one way you can quickly save cash.
For example, Sky offers a TV bundle that includes Netflix, Discovery+, Paramount+ and Sky Cinema.
It costs £25 a month, but it’s worth £39.97 – meaning you save £14.97 or £179.64 per year.
Apple, Amazon Prime and Disney+ also offer similar bundle deals.
The online bank’s data reveals that men have 14% more subscriptions than women, and are likely to spend more money on them.
Eye up offers
You may be missing out on cheap or even FREE subscriptions without realising.
For example, Disney+ costs £99 a year for a standard plan, but you can get it free for 12 months if you have an annual Uber One subscription costing £49.99 — saving almost £50 a year.
Or if you’re with Lloyds Bank and have a Club account, which costs £5, you get a free Disney+ subscription for 12 months.
This costs £5.99 a month in the UK, meaning you’d save almost £12 a year.
