Record number of households spending £265 a year on subscriptions they do not even use, according to research by Compare The Market
A record number of households are spending £265 a year on subscriptions for goods and services they do not even use, according to research released today by Compare The Market.
The comparison website says one in five consumers are spending this amount on such services, often without realising it.
This is a result of people failing to notice that the subscription they signed up to years ago renews automatically. Such subscriptions are commonly known as ‘continuous payment authorities’ and The Mail on Sunday has long campaigned for the rules surrounding them to be tightened up.
Renewal: One in five consumers are spending on services, often without realising it
We believe that letters, texts or emails informing customers of an impending automatic renewal date should be sent one month beforehand – including a right to cancel. Details of continuous payment authorities should also be more clearly marked on bank statements.
Currently, businesses are allowed to take regular payments from a customer’s debit or credit card until the instruction is cancelled. Among those that have embraced this payment method are Amazon, Apple, Netflix, Now TV and Spotify.
James Daley, founder of consumer website Fairer Finance, believes a crackdown on continuous payment authorities is long overdue. He says: ‘It is high time that it was put into law that customers must be asked if they want to renew a service after a year – rather than it be sneakily continued without the subscriber being aware.
‘It should also be far easier to cancel a service – too many firms make it hard for people to quit by luring them back with special offers or demanding they phone to stop it.’ Lockdown created a boom in people signing up to continuous payment authorities, with people bingeing on TV and shopping online.
An estimated £7.5billion a year is sucked out of bank accounts via the payments – yet only a fifth of us realise they are different from easier to manage direct debits or standing orders.