Government proposes crackdown on “subscription traps”

The UK Government has launched a consultation to tackle so-called “subscription traps,” aiming to make it easier for consumers to cancel unwanted subscriptions and secure refunds.

These proposals are designed to simplify cancellation processes and improve transparency, potentially saving UK families up to £1.6 billion annually. 

The problem: Trapped in subscriptions 

“Subscription traps” occur when consumers are misled into signing up for subscriptions, often via free trials or introductory offers, only to find themselves locked into costly plans due to unclear terms or complex cancellation procedures. 

New figures reveal that nearly 10 million of the UK’s 155 million active subscriptions are unwanted, costing an average of £14 per subscription per month. From magazines to beauty boxes, many businesses employ cumbersome cancellation methods, including lengthy phone calls or restrictive opening hours, leaving consumers feeling trapped. 

Proposed solutions 

The consultation seeks input on measures to protect consumers while ensuring businesses can still offer subscription-based services. Key proposals include: 

• Simpler cancellation processes: Looking at the arrangements businesses need to put into place to help customers conveniently cancel a contract.
• Clearer communication: Consumers would receive reminders about trial periods ending or auto-renewals for long-term contracts.
• Improved refund rights: Proposals explore how refunds should work when consumers exercise their right to cancel within the statutory 14-day cooling-off period or if businesses fail to meet their obligations.

Next steps 

The consultation is open to businesses offering subscription services, consumer groups, and enforcement agencies, so that all perspectives can be considered.

To see further information about the consultation and participate, see: https://www.gov.uk/government/consultations/consultation-on-the-implementation-of-the-new-subscription-contracts-regime

Looking for advice? Check out our full range of services. From payroll help to taxation advice, our expert team is available to lend a hand.