Are subscriptions turning your bank account into a leaky bucket?
A recent Citizens Advice online survey found that 84% of people did not realise they had agreed to a subscription.
These “subscription traps” can turn a spur of the moment free trial sign up into an annual liability costing consumers hundreds of pounds per year.
In the same survey, it was found that more than 16 million people had signed up to Continuous Payment Authorities (CPAs) over a 12-month period. Most of these were set up online.
CPAs differ from the more widely recognised Direct Debits in a number of ways, however, the most contentious issue for customers is that CPAs allow companies to take payments from their accounts without them being notified and giving explicit authorisation before each payment. Companies are, therefore, able to lure consumers into signing up for monthly, quarterly or yearly contracts using long winded terms and conditions statements (we even know lawyers who don’t read these!) and take payment even if users do not use their service.
A new tactic increasingly used by companies is offering discounts for annual recurring plans. These lengthy plans mean that there is an increased likeliness that a service is forgotten about and not cancelled, before the payment is renewed and paid for in advance. Sneaky, hey?
At Bean, we believe that consumers should not be tricked into signing up for lengthy and costly contracts without realising, effectively creating leaks in their bank accounts. There are a number of initiatives which can be put in place to increase consumer protection from a legislative point of view. We are excited to see what Philip Hammond announces in the Budget later today. However, in the meantime we are busy working away to create the best technological solution to enable consumers to take control of their subscriptions and plug these leaks.
Bean is the UK first consumer subscription management platform. By linking your bank account to Bean, we will find and track all your recurring payments including your utility bills, mobile phone contract and loans. We help highlight contracts that you no longer need such as unused gym subscriptions, online TV streaming contracts and free trials that have overrun, helping you cancel these contracts in one click. Bean will then notify you, at the right time with the right information, if you can get a better deal on any of these contracts.