Over a Quarter of Brits Face Unwanted Subscription Charges
New research has uncovered a troubling trend in consumer finance, revealing that more than a quarter of Brits have experienced payments taken for subscriptions they believed were cancelled. Specifically, 27% of respondents reported having a payment deducted after they thought they had successfully terminated a subscription service.
Widespread Struggles with Subscription Cancellation
Almost one in four Brits, equating to 23%, have encountered significant difficulties when attempting to cancel a subscription in the past. Subscription-based payment models have become increasingly prevalent in recent years, often marketed as offering value for money on an individual basis. However, these payments can quickly accumulate, leading many consumers to seek ways to reduce their financial commitments.
The research, conducted by Compare the Market, indicates that a substantial number of these subscription payments are processed via credit cards. This method can make the charges less conspicuous on monthly statements, complicating efforts to track and manage expenses.
The Hidden Nature of Continuous Payment Authorities
Continuous Payment Authorities (CPAs) enable companies to automatically collect recurring payments from credit or debit cards, commonly utilized for online and digital subscriptions. While CPAs are favored by subscription providers for their flexibility and ease of online setup, they pose visibility challenges for consumers.
Charlie Evans, a personal finance expert at Compare the Market, explained the issue: “Unlike Direct Debits, which typically appear clearly on bank statements, recurring card payments do not always stand out as fixed financial obligations. Instead, they often resemble ordinary card transactions, allowing them to blend seamlessly with everyday spending on a credit card.”
Obscure Payment References Compound the Problem
The lack of clarity is further exacerbated by how CPAs are displayed on bank or credit card statements. Payment references may appear as abbreviated names, unfamiliar trading titles, or even random combinations of letters and digits. This obscurity makes it difficult for consumers to associate a charge with a specific subscription or service.
Evans added: “Without a clear indication that a payment is recurring, small charges can be easily overlooked during statement reviews. If statements fail to distinctly highlight recurring payments, subscriptions are prone to being neglected, especially when the payment reference is ambiguous.”
These automatic payments will continue until the consumer explicitly instructs the company or their bank to halt them, underscoring the importance of vigilance in managing subscription services.
