Online subscriptions of all kinds have exploded in recent years. Signing up is easy, but managing and reducing sign-ups is difficult for even the smartest consumers.
Clark Howard, a longtime cost-savings guru in Atlanta, recently found himself paying for streaming services even though he was getting them for free from his home internet provider. he said.
He sent a group text. “Who signed up for this?” — and found out that one of his kids did. Additional subscriptions could be canceled online, he said. But this experience shows how complicated it can be to keep track of the myriad of services that automatically charge a consumer’s credit card with just a few clicks.
“It could be so many different kinds of things,” Howard says. Video entertainment, online games, computer software, meal prep kits, weight loss apps, and clothing are just a few of the items you can purchase with a subscription. People may lose sight of all they are paying for, he says.
But government watchdogs are increasingly tracking how companies treat customers who try to unsubscribe. Last month, the Federal Trade Commission announced that sued Amazonclaimed that a major online retailer tricked people into signing up for its Prime program, which included perks like fast delivery and streaming, and made it harder to cancel.
“The primary purpose of Prime’s cancellation process was to stop subscribers, not to enable them to cancel,” the agency said in a statement. news release.
In an emailed statement, Amazon said the FTC’s allegations were “contrary to fact and law,” adding, “We designed it to make it clear and easy for customers to sign up for and cancel Prime membership. We are doing it,” he added.
The FTC also proposes rule To do that, companies will need to make canceling subscriptions “at least as easy” as when they started. For example, if you can sign up online, you should be able to cancel using the same steps at the same website.
The new rules are being finalized and are expected to go into effect next spring or summer, said James A. Combe, deputy director of enforcement for the FTC’s Office of Consumer Protection. “Help is on the way,” Ms. Comb said.
Many people and groups have submitted comments online. proposed rule. A Eugene, Oregon man wrote that he had to finally persuade his credit union to stop monthly withdrawals from his account to cancel TextNow, an app that provides messaging and calling services. And a subscriber to genealogy site MyHeritage said he “tried to no avail” to stop the company from automatically charging his credit card. TextNow and MyHeritage did not immediately respond to requests for comment.
At issue is the use of “negative option” plans, such as free trials that continue as paid subscriptions, which assume that consumers will accept an offer unless they actively decline.
Businesses prefer auto-renewing subscriptions because they don’t have to keep aggressively marketing their products, said John Braeau, vice president of public policy, telecommunications and fraud at the Consumer Federation of America.
Of course, some people prefer free trials and auto-renewal. Even the FTC acknowledged in its proposal that such options could have “substantial benefits” for consumers. But the FTC said companies are increasingly using “dark patterns” to make it harder to shut down services. Such tools include requiring customers to click multiple screens, dimming online ‘cancel’ buttons and using lighter colors for ‘continue’ buttons.
C+R Research Discovered May 2022 investigation On average, consumers initially estimated that they spent $86 per month on subscription services. However, a closer look at my spending revealed that I was actually spending $219.
Howard urged consumers to familiarize themselves with the new service and its cancellation policy by going off the service’s website and searching for cancellation policies or complaints before signing up.
“Before you get married, you have to consider how you’re going to divorce,” he said.
The FTC advises consumers to set a calendar reminder on their phone when they sign up for a free trial so they know when it’s time to cancel. But not everyone does, so Blaio’s group is urging the FTC to require companies to notify customers before recurring charges and remind them that they can cancel if they wish. said there is.
Are you annoyed by frequent emails and text reminders? “But it’s more annoying to keep getting billed for subscriptions you no longer use.”
FTC proposes issuing annual reminders for anything other than subscriptions that involve the delivery of physical goods. (The idea is that it is enough to have the product delivered to your door.)
The FTC’s proposal would also give consumers the option of hearing alternative money-saving offers before canceling service. (The FTC’s Mr. Comb said he had taken advantage of such offers himself. When he canceled his radio subscription, he was offered a much lower fee to continue, which he accepted. said.)
But the change is intended to avoid situations like those described in a letter to the FTC by 20 Attorneys General, where customers tried to cancel their subscriptions using the company’s online chat feature. there is Company representatives repeatedly urged him to reconsider, but he ignored the man’s firm demands to cancel and was online for about 40 minutes.
Here are some questions and answers about managing and canceling your subscription.
How can I best track my subscriptions?
“It requires a mental reset,” Howard said. He said that once every three months, say, at the turn of the season, he would look over his card statement for checks and credits, check the recurring charges, and “remember everything he didn’t remember.” We recommend that you confirm.
If you no longer use something, cancel it. He admits it’s not always easy, especially with some cable companies and many gym memberships. You might need to call your cable company, he said, where you might be transferred to a “retention” expert who might offer some kind of temporary discount to keep you. For the gym, you may have to travel to the location.
Should I use a subscription tracking app?
Today, there are many apps that scan your bank account or credit card statement to ask for recurring payments or offer to cancel subscriptions. However, the app requires sharing account information and may charge a fee in some cases.
In a letter to the FTC, the Attorney General took a dim view of such apps. “We believe consumers should not need to sign up for another service to manage their subscriptions,” they wrote.
What else can you do to avoid unnecessary subscription costs?
The FTC advises consumers to look out for pre-checked boxes when shopping online. Unless these boxes are unchecked, they may register for unwanted products and services. If you have canceled your subscription and are still being charged, the Commission recommends filing a dispute with your credit card company. You can also file a complaint. FTC website.