New government plans aim to better protect consumers from “subscription traps”, a move expected to save the public a collective £400 million annually.
The rules, anticipated to come into force early next year, will ensure consumers receive reminders before free or discounted trials end, or when contracts of 12 months or more automatically renew.
Consumers will also be able to cancel easily online if that was their original sign-up method, ending lengthy waits on hard-to-find phone numbers. Additionally, a new 14-day cooling-off period will apply after a free or discounted trial concludes, or when a contract renews for a year or longer.
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: “There’s nothing more frustrating than seeing money you’ve worked hard for, disappear from your account for a subscription you’ve forgotten you had.
“These new rules will put consumers back in control of their money – making subscriptions clearer, fairer and far easier to cancel.”
There are 155 million active subscriptions held by consumer across the UK, with almost 10 million of them believed to be unwanted.
More than 3.5 million people are being “quietly rolled” from free or discounted trials into fully costed contracts, while another 1.3 million are caught out by unexpected autorenewals, the Government said.
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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, it 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.”
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