The UK government is taking steps to protect consumers from “subscription traps” that are costing Britons an estimated £1.6 billion per year. Justin Madders, the Minister for Employment Rights, Competition, and Markets at the Department for Business and Trade, has announced plans to make it easier for consumers to cancel unwanted subscriptions and secure refunds. Subscription traps often entice consumers with free trials or discounted offers, automatically enrolling them in costly payment plans if they fail to cancel within a set period.
Madders shared his own experience of inadvertently signing up for a subscription while purchasing train tickets, using it as a test case to gauge the ease of unsubscribing. According to government data, UK consumers spend around £26 billion annually on subscriptions in non-regulated sectors, from streaming services to beauty products. Nearly 10 million of the 155 million active subscriptions in the UK are believed to be unwanted, amounting to £1.6 billion a year.
The Digital Markets, Competition, and Consumer Act, which became law this year, establishes the principle of making it simpler for consumers to exit unwanted services.
Cracking down on subscription scams
However, secondary regulation is required to implement the regime.
While the US Federal Trade Commission has adopted specific measures to address similar issues, Madders indicated that the UK plan might not be as prescriptive. The government is initiating a consultation on proposals that include streamlined refund and cancellation processes. The consultation, open until 10 February, aims to gather input from businesses offering subscriptions, consumer groups, and enforcement agencies.
It will also explore topics such as how people are informed about renewals or the end of a free trial and how businesses signpost their cancellation process. By implementing these measures, the government hopes to empower consumers and protect them from the financial burden of unwanted subscriptions. The consultation marks an important step towards creating a fairer and more transparent marketplace for all.
