Online shopping has become more popular over the past few years. In April 2016 alone, UK consumers spent £12.6 billion online using credit and debit cards. Although very convenient it is not without risks – online fraud in the UK totalled £261.5 million in 2015.
Earlier this year Citizens Advice published “Locked in” on one kind of online scam, subscription traps. In this article I will explain what a subscription trap is, how you can protect yourself and what to do if you do become a victim.
What is a subscription trap?
A subscription trap is where someone is tricked into signing up for a costly monthly subscription usually for a health or beauty related product.The offer is a free trial of the product and all you have to pay is a small fee for postage and packing.
The reason for this fee is to obtain your card details. Hidden deep in the terms and conditions, is a clause which states that if you do not cancel within the trial period, you will be auto-enrolled into a regular subscription. You could end up paying up to £99 per payment. The products themselves may not be genuine either and sometimes they do not even turn up.
Things to look out for and how to protect yourself
Be wary of unexpected pop-ups: Several subscription traps make use of pop-ups which appear while you are browsing a site that you trust. This may then link you to a website promoting the subscription trap and could make it look like it is linked to the trusted site. Be wary of giving out your card details on these pop-ups.
Resist pressurising tactics: Subscription trap websites often use wording such as “only 10 left, hurry now!” or “act now to get this time limited offer”
to encourage you into making a decision without thinking it through. Don’t let yourself be rushed by pushy marketing, if need be take 5 minutes to think it over.
Don’t always believe endorsements: Adverts for subscription traps often use celebrity endorsements or “reviews” from the press. These may not be the real thing and may not have the consent of the celebrity involved.
Always check terms and conditions: It is always worth checking if you can easily find the terms and conditions when signing up to something online; if you can’t, don’t sign up!
What to do if you do become a victim
Try to cancel the payments: subscription traps typically use a payment method called a Continuous Payment Authority or CPA. You set this up by giving a trader your card details. It is your right to cancel a CPA with either the trader or your bank / card issuer. If your bank asks you to contact the trader, tell them this is not necessary or that you have already done so and not been successful – whichever applies. If you do cancel the CPA with your bank / card issuer it is still good practice to inform the trader that you are cancelling the subscription. This is best done in writing, so try and source an address you can write to. Always keep a copy of any letter sent and send by recorded delivery so you can prove it arrived.
Chargeback and Section 75 claims: Many debit and credit cards offer protection on your purchases. Contact your bank saying you want to start a chargeback claim and explain why. Most card issuers have a time limit to do this in – typically 120 days.
If you paid more than £100 on a credit card you are protected by Section 75 of the Consumer Credit Act 1974. This allows you to hold the credit provider jointly liable for the money you have lost. Again, contact your bank/card issuer to request to start a claim and explain why.
Both chargeback and Section 75 claims may not always be successful as the trader can contest the claim. The key thing to communicate to the bank is that the true costs of the agreement were not made sufficiently clear to you when you agreed to the purchase.
Contact the Citizens Advice Consumer Service on 03454 040506. We can give you advice and alert Trading Standards.
Daniel VandenBurg is a Consumer Intelligence Analyst in the Partnership Intelligence Team at Citizens Advice and also Knowledge Hub manager for the Consumer Protection Partnership. Daniel can be reached at email@example.com
Daniel VandenBurg, Consumer Intelligence Analyst, Citizens Advice 12 July 2016