20 August 2024

Australians Trapped Paying for Unwanted Subscriptions

RESEARCH FINDS THREE IN FOUR ARE TANGLED IN ‘SUBSCRIPTION TRAPS’

The latest Consumer Policy Research Centre (CPRC) study reveals Australians are struggling with subscription traps, costing them time, money, and peace of mind.

As subscription services proliferate – from streaming services to meal plans — CPRC’s Deputy CEO and Digital Policy Director highlights the imbalance.

“Subscription traps are the online Hotel California – you can sign-up any time you like, but you can never leave; with sign-ups taking mere seconds, while cancelling can be a difficult, frustrating and time-consuming ordeal,” Ms Gupta said.

This practice, known as a ‘subscription trap’ a form of ‘dark pattern’ – deceptive designs that manipulate consumers to make choices benefiting the business, is currently not illegal in Australia.

The report found:

• 75% of Australians with subscriptions have had a negative experience when trying to cancel a subscription
• 32% have felt pressured into keeping a subscription they wanted to cancel
• 1 in 10 Australians give up trying to cancel, continuing to pay for unwanted services
• 48% have spent more time than intended trying to cancel a subscription
• Unlike other countries, Australia lacks specific laws to prevent these unfair practices

The report comes at a crucial time when cost of living pressures are mounting for many Australians, making subscription traps an unnecessary burden.

“Australia lags in consumer protection – it’s time for our laws to catch-up with global best practices. Europe, UK,  India, and the U.S. are crossing the finish line with protections, while Australian consumers are left behind at the starting blocks of unfair subscription practices,” Ms Gupta said.

“Businesses also don’t need to wait for new laws to do the right thing. They can choose to make subscriptions as easy to leave as they are to join today.  Most Australians (90%) would likely purchase from the same organisation if cancelling a subscription was quick and simple, so it’s not just good ethics—it’s good business.”

“The report includes examples of businesses using subscription traps against Australians, including large companies like Adobe, Amazon, eBay and LinkedIn, as well as businesses with good subscription practices. Netflix, Apple subscription management services and media company Mamamia are examples that show that successful subscription companies can operate without trapping customers,” Ms Gupta said.

The report calls for three main actions:

• The introduction of an unfair trading prohibition in the Australian to require businesses to make cancellation as easy as subscribing.
• Immediate action from businesses to voluntarily revise their cancellation processes.
• Banks and businesses working together so consumers can cancel subscriptions via their bank transactions, right at the source.

More information, including the full report, is available at: cprc.org.au/let-me-out

Chandni Gupta is available for comment on request contact Liliana Campos via media@cprc.org.au or ph: 0493 539 466.