What are the new rules on automatic subscription renewals?

The government has announced new rules to protect people from being stuck in subscriptions.

It says the move will save a collective £400 million a year.

ITV News explains what the new rules are and how you could be affected.

What are the new rules?

Companies offering subscriptions will have to send reminders before free or discounted trials end or before contracts of 12 months or more automatically renew.

They will also have to allow people to easily cancel a subscription online if they originally signed up directly through the company, which should prevent lengthy waits on the phone to end a contract.

There will be a 14-day cooling off period after a free or discounted trial ends, or when a contract renews for 12 months or longer.

Which organisations are exempt?

The new rules won’t apply to certain membership of charitable, cultural and heritage organisations because of “their role in preserving and providing access to locations and cultural collections”.

When will the new rules apply?

The new rules should come into place sometime next year.

How many people will be affected?

There are 155 million active subscriptions held by people across the UK, with almost 10 million of them believed to be unwanted, the government said.

More than 3.5 million people are being “quietly rolled” from free or discounted trials into fully costed contracts, while another 1.3 million are caught out by unexpected autorenewals, it added.

How much money will be saved?

The government said the new rules could save people around £14 a month on average per unwanted subscription, or almost £170 a year.

Collectively, that adds up to £400 million a year.

Why are these rules being introduced?

Minister for Consumer Protection Kate Dearden said there’s “nothing more frustrating than seeing money you’ve worked hard for, disappear from your account for a subscription you’ve forgotten you had”.

“These new rules will put consumers back in control of their money – making subscriptions clearer, fairer and far easier to cancel,” she added.

So-called “subscription traps” can be “costly and wreak havoc” on finances, Which? head of consumer rights policy Sue Davies said.

“The strengthening of subscription laws will be welcome news for those struggling with rising costs.

“These new rules will help put consumers in the driving seat with proper transparency and protection.”

How can you avoid subscription traps in the meantime?

Get Safe Online says subscription traps are particularly common with products such as slimming pills, health foods, pharmaceuticals and anti-aging products, but any company can use them.

The online safety organisation recommends:

Read the small print or terms and conditions carefully before entering into any agreement or making a purchase
Make sure the terms and conditions box has not been pre-ticked
If there is a limited timescale to cancel the agreement, make sure you do so before the due date if you want to cancel it
Never provide bank details to companies with doing some research first
Keep a copy of any advertisement (print it or take a screenshot) and keep a note of the webpage
Remember you will have a better chance or cancelling subscriptions or getting a refund if the company is UK-based
Check your bank statements regularly for unexpected payments