The plans aim to stop firms from keeping consumers committed to long-term contracts for unwanted products or services after signing up for a free trial.
The proposals will make it easier to cancel and claim refunds from companies. They hope to put an end to phone calls with operators tasked with convincing customers not to cancel a contract.
Websites will also need to clearly signpost customers directly to the cancellation process to ensure cancelling a contract is as easy as signing up for one.
UK adults lose an average of £14 on unwanted subscription services, which can range from magazine purchases to monthly alcohol deliveries. The consultation follows the Digital Market, Competition and Consumers Act brought in earlier this year.
Part of the plans includes giving customers clear reminders about their ongoing subscriptions, plus a 14-day period to cancel a subscription after a long-term subscription auto-renews.
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It comes as almost 10 million of the 155 million active subscriptions in the UK are for unwanted services, which totals a loss of £1.6bn per year.
In some cases, this is caused by customers automatically being put onto the most expensive payment plan if they miss cancelling a trial within a certain time.
The Government will speak with consumer groups, enforcement agencies, and retailers to finalise the details so customers don’t have to pay for products they no longer want before the bill is made law in Parliament.
Earlier this year, Citizens Advice warned businesses that subscription traps do not only cause frustration and loss of income for customers but can have a negative effect on their turnover, too.
Over half of UK adults surveyed by the charity said they have decided not to sign up for a product due to worries over how difficult it would be to cancel.
‘Stop this corporate abuse of power’
Jonathan Reynolds, Business Secretary, said: “Our mission is to put more money back into people’s pockets and improve living standards across this country, tackling subscription traps that rip people’s earnings away is an important part of that.
“Everyone hates seeing money leave their account for a subscription they thought they’d cancelled or a trial that unexpectedly gets extended.”
Reynolds added: “We’re looking to hear from as many businesses, consumer groups, and other interested groups as possible to allow us to set fair regulations that stop this corporate abuse of power whilst retaining the benefits of subscriptions for consumers and businesses.”
Rocio Concha, Which?’s director of policy and advocacy said: “Subscriptions can be a convenient way for consumers to receive products and services, but in recent years, many consumers have been trapped in unwanted subscriptions.
“It’s encouraging to see the Government press ahead with much-needed laws to tackle this, which will hand consumers far greater control over the subscriptions they take out.”
