Subscription traps: how to spot them and how to ditch them - Martyn James

If you want to save some cash, then cancelling subscriptions and regular payments that you no longer want or need is the number one way to do it. In fact, you can even claim money back.

Businesses are often able to disguise the money they debit from you in the depths of your accounts with cryptic terms

I’m preparing to launch myself back in to my own accounts next week, to see what things are lurking there that I haven’t authorised. This is worth doing, because last year I saved over £1,000 by cancelling these sneaky payments.

Spotting regular and unauthorised payments isn’t easy. Most of the banking apps I’ve seen that list subscriptions seem to only highlight obvious direct debits, standing orders or utility bills. However you can use free apps like Little Birdie, which can trawl your accounts in search of these payments for you. It’ll even remind you when some payments are coming up for renewal.

However, businesses are often able to disguise the money they debit from you in the depths of your accounts with cryptic terms. So for now, you’ll still need to go back through your bank and credit card accounts for a year to find all these debits. Astoundingly, payments can even be taken from your mobile phone bill!

Above all else, keep an eye out for subscription traps.

What is a subscription trap?

The term ‘subscription trap’ is most commonly used to refer to offers where you sign up for a free trial, like an online shopping membership scheme or an annual contract for goods or services. Many subscriptions are legitimate, but others are outright rip-offs, charging you for things you neither want or need. Citizens Advice estimated that people were forking out £160 on average on unwanted services.

How does this happen?

Subscription traps work on the basis that most of us aren’t very good at remembering when we’ve signed up to free deals – and more importantly when they expire.

Often people don’t realise they’ve continued to be charged for services they’ve forgotten about. Others find themselves saddled with overpriced goods being sent through the post or locked in to ‘contracts’ for a year or more.

What are the common traps?

The most controversial subscription traps involve trials for things like cosmetics or health supplements. You sign up for a free sample, but if you don’t cancel in time, other goods arrive – often with huge price tags each month (I’ve seen upwards of £100 a month). To compound things, many businesses are based abroad and dealing with them can be tricky.

Here's what to watch out for:

· Before you sign up to a free deal, run a few simple checks. If the business isn’t based in the UK, think twice. It can be much harder to get out of a contract - and your rights aren’t as strong in other places around the world.

· Read the small print. I know it’s a pain, but do you need 18 pages of text for a free trial? That’s a warning in itself. If it’s a phone salesperson, get them to email you the full details of the offer.

• Check the ‘contact us’ details. If the business makes it hard for you to speak to a person direct, be wary.

• You may have a cooling off period of 14 days. If you think you’ve made an error, cancel!

• If you’re being debited and you didn’t want the payments to happen or wanted to cancel the deal, instruct the business that you don’t want their goods or services. Do it in writing and keep a copy of your letter or email.

• Speak to your bank. Subscription traps use ‘continuous payment authorities’, a kind of flexible direct debit from your account or credit card. The law says your bank has to cancel these payments the moment you tell them to.

If you’re in a dispute with the business because they say you’ve signed a contract. Ask for proof (that includes calls). If they can’t prove you’ve agreed to a year’s worth of payments then they can’t enforce it. So don’t delay – cancel and save today!

Martyn James is a leading consumer rights campaigner, TV and radio broadcaster and journalist.