Is Australia ready to say goodbye to subscription hassles?
- Replies 4
The convenience of subscribing to our favourite platforms, from streaming services to fitness apps, has become second nature to many.
But as we've all likely experienced, the ease of signing up is often starkly contrasted by the tedious process of cancelling a subscription.
It's a frustration that's been felt across the globe, and one that the United States has recently taken steps to address with the introduction of a 'click to cancel' rule.
This rule mandates that businesses make unsubscribing from services as straightforward as subscribing to them.
But what about here in Australia? Are we on the brink of a 'click to cancel' revolution of our own?
A report by the Consumer Policy Research Centre (CPRC) revealed that a staggering 75 per cent of Australians have encountered negative experiences when attempting to cancel subscriptions.
The report also found that 32 per cent of consumers felt coerced into maintaining subscriptions they no longer wanted.
The tactics employed by businesses to retain subscribers are varied and often insidious. Some of the common strategies include making the cancellation process different from the sign-up process, offering discounts or incentives to dissuade customers from cancelling, employing emotional manipulation, hiding fees associated with cancellation, and bombarding former subscribers with communications to rejoin.
According to Paul Harrison, a Professor of Marketing and Consumer Behaviour at Deakin University, several businesses leverage consumer behaviour and psychology in the cancellation process.
‘It's very easy to get a subscription and sign up and commit to all sorts of expenses, and it's very difficult to stop that subscription,’ he said.
Under The Australian Consumer Law, there are some safeguards against these so-called 'subscription traps’.
The Australian Competition and Consumer Commission (ACCC) has stated that subscriptions involving false or misleading representations during sign-up or cancellation may be in violation of the law.
Additionally, the law protects against unfair contract terms, considering factors such as the balance of rights and obligations, the necessity of the term for the business's legitimate interests, and the potential detriment to the consumer.
However, there are gaps in the current legislation that allow some subscription services to operate within legal grey areas, making it challenging for consumers to extricate themselves from unwanted commitments.
For instance, a service may offer cancellation via phone but then fail to provide adequate staffing to handle the volume of calls, effectively trapping consumers in their subscriptions.
ACCC has acknowledged this challenge, saying, ‘Some aspects of subscription service providers making it difficult for consumers to cancel their subscriptions may not be covered by existing laws.’
Recognising the need for reform, the Australian government has announced its intention to tackle ‘general prohibition on unfair trading practices’, including the issue of difficult-to-cancel subscriptions.
‘We need to make sure, when it comes to subscriptions, it can't be incredibly easy to sign up to a subscription and incredibly difficult to get out of it,’ Treasurer Jim Chalmers said at a press conference after the announcement.
‘We get a lot of feedback about that. We want to work with the ACCC to crack down on that.’
The ACCC has welcomed these developments, saying, ‘More generally, we think this reform will better protect consumers as it will set an improved standard for business behaviour and promote better conduct in the market.’
The path to resolution for consumers facing difficulties with subscription services is not always clear.
While the ACCC can investigate and enforce action against companies breaching consumer law, it does not handle individual complaints.
Consumers are directed to state and territory consumer protection agencies, but even then, they may need to resort to legal action to have their issues addressed.
This situation is a ‘real problem’, according to Professor Harrison.
‘It's often just advice you get from your local consumer affairs or fair trading [body],’ Professor Harrison said.
‘If governments are serious about protecting consumers…they need to put in independent mediators who can make rulings. It's not going to [a tribunal] or petty court, it has to be easy.’
Have you found yourself ensnared in a subscription trap? What changes would you like to see to make cancelling subscriptions easier? Let us know in the comments below!
But as we've all likely experienced, the ease of signing up is often starkly contrasted by the tedious process of cancelling a subscription.
It's a frustration that's been felt across the globe, and one that the United States has recently taken steps to address with the introduction of a 'click to cancel' rule.
This rule mandates that businesses make unsubscribing from services as straightforward as subscribing to them.
But what about here in Australia? Are we on the brink of a 'click to cancel' revolution of our own?
Will Australia have a ‘click to cancel’ revolution soon? Credit: Shutterstock
A report by the Consumer Policy Research Centre (CPRC) revealed that a staggering 75 per cent of Australians have encountered negative experiences when attempting to cancel subscriptions.
The report also found that 32 per cent of consumers felt coerced into maintaining subscriptions they no longer wanted.
The tactics employed by businesses to retain subscribers are varied and often insidious. Some of the common strategies include making the cancellation process different from the sign-up process, offering discounts or incentives to dissuade customers from cancelling, employing emotional manipulation, hiding fees associated with cancellation, and bombarding former subscribers with communications to rejoin.
According to Paul Harrison, a Professor of Marketing and Consumer Behaviour at Deakin University, several businesses leverage consumer behaviour and psychology in the cancellation process.
‘It's very easy to get a subscription and sign up and commit to all sorts of expenses, and it's very difficult to stop that subscription,’ he said.
Under The Australian Consumer Law, there are some safeguards against these so-called 'subscription traps’.
The Australian Competition and Consumer Commission (ACCC) has stated that subscriptions involving false or misleading representations during sign-up or cancellation may be in violation of the law.
Additionally, the law protects against unfair contract terms, considering factors such as the balance of rights and obligations, the necessity of the term for the business's legitimate interests, and the potential detriment to the consumer.
However, there are gaps in the current legislation that allow some subscription services to operate within legal grey areas, making it challenging for consumers to extricate themselves from unwanted commitments.
For instance, a service may offer cancellation via phone but then fail to provide adequate staffing to handle the volume of calls, effectively trapping consumers in their subscriptions.
ACCC has acknowledged this challenge, saying, ‘Some aspects of subscription service providers making it difficult for consumers to cancel their subscriptions may not be covered by existing laws.’
Some subscription service providers make it difficult for consumers to cancel their subscriptions. Credit: Shutterstock
Recognising the need for reform, the Australian government has announced its intention to tackle ‘general prohibition on unfair trading practices’, including the issue of difficult-to-cancel subscriptions.
‘We need to make sure, when it comes to subscriptions, it can't be incredibly easy to sign up to a subscription and incredibly difficult to get out of it,’ Treasurer Jim Chalmers said at a press conference after the announcement.
‘We get a lot of feedback about that. We want to work with the ACCC to crack down on that.’
The ACCC has welcomed these developments, saying, ‘More generally, we think this reform will better protect consumers as it will set an improved standard for business behaviour and promote better conduct in the market.’
The path to resolution for consumers facing difficulties with subscription services is not always clear.
While the ACCC can investigate and enforce action against companies breaching consumer law, it does not handle individual complaints.
Consumers are directed to state and territory consumer protection agencies, but even then, they may need to resort to legal action to have their issues addressed.
This situation is a ‘real problem’, according to Professor Harrison.
‘It's often just advice you get from your local consumer affairs or fair trading [body],’ Professor Harrison said.
‘If governments are serious about protecting consumers…they need to put in independent mediators who can make rulings. It's not going to [a tribunal] or petty court, it has to be easy.’
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