Subscription services are everywhere – from streaming on our electronics to groceries at our doorsteps. They’re convenient. They give us stuff we want, usually with a free trial. Who doesn’t like free? Of course, there is a price of free trial subscriptions. Because a credit or debit card is required to sign up, Americans lose a surprising amount of money to free trials. That’s the hook.
“[It’s] convenient if you actually enjoy the service and plan on using it again in the future,” said Courtney Moore in a recent report for Fox Business. “But a number of Americans get trapped and lose money to auto-renewing subscriptions when these trials expire.”
About 46 percent of us subscribe to at least one online streaming-media service (i.e. Netflix, Hulu, Sling), according to consulting firm McKinsey & Company. About 15 percent of online shoppers subscribed to an e-commerce service in the past year, mainly subscription boxes (i.e. Ipsy, Dollar Shave Club, BarkBox); 35 percent have three or more. The monthly fee for popular subscription services is about $10 or less, which seems reasonable (by design). But that adds up over time and with multiple services. People get busy and often forget to cancel the subscriptions they no longer use. When they do remember, the process for cancellation can be cumbersome or even deceptive.
The Federal Trade Commission (FTC) warns: Some dishonest businesses make it tough to cancel, hiding the terms and conditions of their offers in teensy type, using pre-checked sign-up boxes as the default setting, and putting conditions on returns/cancellations that are so strict it could be next to impossible to stop deliveries and billing.
A recent Bankrate report found that nearly 60 percent of consumers had been charged against their wishes for a subscription service. If you’ve been wrongly charged, or if a provider refuses to cancel your subscription, report it to the FTC and file a complaint with the Better Business Bureau.