A national consumer law organisation is warning consumers against online subscription services that have been withdrawing money from the accounts of vulnerable customers without consent.
There have been a number of reports of e-commerce businesses “inadequately disclosing conditions and ongoing costs of membership programs” that charge consumers with ongoing subscription fees after purchasing products online.
The Australian Competition and Consumer Commission (ACCC) states that “all businesses must provide clear information to consumers about the cost of goods and services, including ongoing subscription services”. While some businesses fail to display their terms and conditions by making them hard to read in fine print or concealing them on a separate page, other businesses choose not to display them at all.
With their first purchase of discounted activewear,the website was charging customers a monthly total of US $49.95 (AU $66.60) as a subscription fee for “VIP” membership.
Fabletics customers claimed they were “unaware they had signed up to monthly subscription payments” as there was no clear disclosure of these conditions.
“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,” ACCC Chairman Rod Sims said in a media release.
“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.”
Sophie Chant, a 20-year-old student from northern Sydney, fell victim to subscription charges after downloading Kylie Jenner‘s official app.
After subscribing to a free one-month trial, Miss Chant deleted the app as she did not want to continue to a paid subscription service.
Unknowingly, Miss Chant was being charged $4.49 a month even though she thought she had unsubscribed by deleting the app from her phone.
“They started charging me even though I didn’t still have the app,” Miss Chant told The Newsroom.
“It’s deceptive because you think you’re safe deleting an app that has a free trial, oblivious to the fact that your account is now linked to a subscription to an app that’s no longer on your device.”
Another Sydney student, 20-year-old Chana Perlgut, subscribed to a seven-day trial to Sweat with Kayla, an exercise app designed by Insta-famous fitness trainer Kayla Itsines.
Miss Perlgut was unaware that her seven-day trial had ended and was automatically charged $19.99. She believes there should be clearer terms and conditions put in place to prevent consumers from being unknowingly charged with subscription fees.
“I just wanted to unsubscribe straight away otherwise they were going to keep charging me,” Miss Perlgut told The Newsroom.
“They need to notify you when they are taking out money from your account so that you remember that you have a subscription in the first place and can decide whether to cancel it or not.”
“People also need to consider what the subscription is offering first before subscribing. You can’t just think that you’re getting everything for free in a sense, always be aware that there is going to be some sort of catch to it, especially in this technology age.” – Vivien Wickham
Photo by James Mott