Government plans to protect consumers from recurring payment 'subscription traps', tackle unclear T&Cs and fine companies that mistreat consumers will be outlined in next week's budget, the Treasury has revealed.
Though it's today announced almost no details of the proposed changes, the Treasury promises the new measures will represent a "crack-down on misleading consumer practices, including those which end up costing people money they aren't expecting".
In a statement issued today, the Treasury said Chancellor Philip Hammond will use next Wednesday's Budget to announce some of the details of the Government's upcoming Consumer Green Paper. All we know so far is that the proposals will aim to:
- End the cycle of subscription traps:The Government says people can end up in 'subscription traps' after they sign up to a paid-for service without intending to - for example, when a paid subscription starts automatically after a free trial. To address this, it plans to "swiftly develop options" to put a stop to this and ensure customers are "notified in good time" before a payment is taken.
- Shorten and simplify small print: The Government will consider options for making terms and conditions clearer to consumers, including making the key terms much more obvious, examining the use of tick boxes, introducing rankings on good practice and improving understanding of which terms cause most confusion.
- Create new powers to fines companies that mistreat customers: Consumer enforcement bodies such as the Competition and Markets Authority will receive powers to ask civil courts to fine companies - including those in unregulated markets - which breach consumer law.
The full document, to be set out by Business Secretary Greg Clark in the coming months, will examine markets which are not working fairly for consumers and explain how the Government intends to address those issues.
'Companies must be far clearer'
Responding to the Government's planned measures to tackle subscription traps, MoneySavingExpert.com managing editor Guy Anker said: "It's a common story - you sign up for a free trial and then BANG, when it’s over you’re hit by an unexpected charge."
"Whether you’ve signed up to a music or TV streaming service, shopping service, wine club or beauty club, the key is to look out for these subscription traps when joining and diarise when to cancel if you don’t want it.
"But companies must also be far clearer by highlighting when signing up and just before the first payment is to be taken."
See our Direct Debit Danger guide for more help on how to spot these recurring payments on your bank statement, and how to cancel them.
On Budget Day (Wednesday 8 March) check out the MSE news page for up-to-the-minute coverage of this and other announcements, and what they mean for you.