The subscription economy is booming – and fraudsters are trying to get their piece of the cake. Here are four common ways you can suddenly find yourself in a subscription trap.
Subscriptions are a great way to get access to movies, music and even cars without owning any of it. They make our lives easier in so many ways. The convenience is also one of the reasons why some subscription companies are bordering on the edge of what is legal, luring you into an unwanted recurring payment cycle – or what is commonly known as a subscription trap.
The number of complaints from consumers ending up in subscription traps is rising according to the report Misleading Consumers online is a cross-border issue. Consumers lose on average 115 euro on these types of tricks. So there’s good reason for you as a consumer to read the terms and conditions thoroughly next time you enter into a subscription. Even banks have to be cautious in this space. The Danish Consumer Ombudsman recently published a decision forcing banks to pay back unauthorized payments of subscriptions to consumers who have been caught in subscription traps.
While they can be used by totally legitimate companies, the following are examples of the tools that subscription traps can use to trick you.
Subaio and Nordea case study
Take free trials
“Start your free 14-day trial”, “Click here and start your free trial now” or “Why wait! Start your free trial today” are common phrases used online. But once you click, only 42% of consumers notice the stated length of the trial period according to a 2016 European Union publication, and so a lot of consumers end up subscribing to something that they only wanted to try. So be aware whenever you sign up for something with the word ‘free’.
Fraudulent companies can draw you in via online endorsements from well-known brands or celebrities. This puts a veil of trust over the subscription trap. If you also see a ‘scientifically proven’ stamp on the product, then it’s even harder to keep the skeptical mindset and check if this is for real. The organization Better Business Bureau shows in its publication how celebrities like Oprah Winfrey and Ellen DeGeneres are being misused in subscription traps.
Get a gift
Getting a gift on top of the subscription plays on the principle of commitment. Gifts such as a book, a perfume or a phone can be used to blind you as a consumer. You only see the prize, while you ignore the terms and conditions,. Unfortunately, those can hook you into a subscription that starts automatically.
Good design can make you understand a product intuitively – or confuse you intentionally. As the global revenue within mobile apps surpassed the 100 billion dollar mark in 2018 so did the incentive for setting out even more subscription traps. Some of the tools include misleading design where app-makers can affect the behaviour and choices of the customers in a desired direction. In one example a simple barcode scanner started a yearly subscription of 156 dollars, while so called dark pattern design hides the basic payment and cancellation information.
Making it impossible to get out of the subscription once you’re in.
As the subscription economy is growing so is the return on investment in the subscription traps. So this problem is only going to get bigger – and in the future we might see even more inventive tools. Luckily governments, consumer organizations and more are pushing back. So be aware of the signs.
How to get out of a subscription trap
Once you’ve identified that you are stuck in a subscription trap, the next logical step is to figure out how to get out of it. Some business have very specific requirements for canceling a subscription, which will make you waste time, effort and your sanity. The easiest way to get out of unwanted recurring payments is to use a subscription management tool.
At Subaio, we offer a subscription management solution that allows you to access all your subscriptions and recurring payments in your bank account. Moreover, after you sign a power of attorney, you can ask Subaio to cancel the subscription for you. Eight banks have already partnered with Subaio to provide this service for their customers.
Read more on how it works here.