Online shoppers beware! ACCC warns of subscription trap costing Aussies hundreds
Thursday 23 June 2016
The ACCC has warned Aussie shoppers to be wary of falling into the ‘subscription trap’ when making discount purchases online.
The ACCC cited US-based exercise clothing retailer Fabletics and Singapore-based discount retailer ScootPrice as two of the examples of online retailers whose subscription conditions were unclear, leading to “a spike in complaints from unhappy consumers.”
“Issues being encountered by consumers range from lack of disclosure of conditions and monthly payments as with Fabletics and Scootprice, to ‘subscription trap’ conduct by online retailers,” ACCC Chairman Rod Sims said.
The ‘subscription trap’ is when customers are unwittingly signed up to a paid, ongoing subscription service by online retailers, who treat “a single purchase as consent to signing them up.” The shopper is usually unaware of the fees involved in membership to the subscription service, and this trap can wind up costing hundreds of dollars before the problem is even noticed.
Although all businesses are required to disclose the costs of goods and services, including subscription fees, these can sometimes be “buried at the bottom of long webpages, a number of clicks away, or in fine print or confusing terminology,” making it hard for shoppers to know exactly what they are signing up for.
“We are putting online retailers on notice that they must clearly and prominently display any ongoing membership fees and we are warning consumers to look out for them when shopping online,” Sims said.
Both Fabletics and ScootPrice have cooperated with the ACCC and committed to making any ongoing membership fees more clear on their websites, but Aussie shoppers should still be on the lookout for online retailers using misleading subscription services.
“The ACCC will continue to monitor any further complaints in relation to these issues and will not hesitate to take appropriate enforcement action against online retailers who attempt to utilise subscription traps in the future,” Sims promised.
Don’t fall into the subscription trap
Follow these tips to make sure you’re not getting stung by unwanted subscriptions when shopping online.
- Review bank and credit card statements. It’s important to regularly monitor the payments automatically being charged to your bank account or credit card and be on the lookout for unexpected and unusual transactions. If you find that you’re being charged for a subscription you don’t want, cancel it right away.
- Know your cancellation rights. Some retailers put restrictions on how and when you can cancel subscription services. Check the fine print when you cancel any unwanted services to be sure the charges are stopped as soon as possible.
- Remember to opt out. Some online retailers use pre-checked boxes to sign shoppers up to subscription services, which means you have to actively opt out to avoid being charged.