Subscription traps come under the spotlight in Scams Awareness Month

Subscription traps come under the spotlight in Scams Awareness Month

Consumer advice organisation the UK European Consumer Centre is issuing a warning to consumers during Scams Awareness Month (July) that the online purchase of health or beauty products such as slimming or diet pills, face creams and tooth whitening merchandise pose a potential problem for some consumers.

The UK European Consumer Centre received just under 500 complaints in 2015 and the first quarter of 2016 from consumers who had thought they were getting a good deal and found out in reality that they weren’t.

Andy Allen, UK ECC service director, said: “Consumers made the vast majority of these purchases online, for a large range of beauty-type products. Although this is not a universal problem – there are good health or beauty product companies supplying such products to consumers in an honest and above-board way under contracts which are fair – we are still concerned. This is a significant number of consumers who are falling foul of online purchases of goods such as slimming pills and face creams which can only be called ‘scams’.

“On some websites, consumers may be billed a monthly fee of something like £90. Consumers are often unaware that this is a subscription as the initial price is misleading.”

Andy explained how the ‘scams’ work: “What most people don’t see is the intention of some of these companies to use this attractive initial offer as a means to extract money from people’s bank accounts.  This is usually done in the form of an ongoing subscription.

Office, laptop, switch accounts - Free for commercial use No attribution required credit - Credit Pixabay MT“Consumers are often hooked by an advert placed, for example, on social media for a ‘free trial’. The adverts can sometimes be pop-ups on other websites too. Consumers click on the link and sign up to the free trial. The websites often state that the pills themselves are free but that consumers need to pay P&P so they insert their card details, thinking that they are only paying the £1.99 or whatever the P&P is. And bingo, the consumer is caught.”

Terms & Conditions can be one problem area for consumers caught in these subscription traps.

Andy said: “In some cases, there may actually be no Terms & Conditions, so consumers are quite right in thinking that all they should pay is the postage and packing. Consumers receive the pills and then find that larger payments are debited from their account. When they complain, consumers are then presented with Terms & Conditions which state that they have agreed to a subscription. This is often the first time the consumer is aware of the Terms & Conditions.

“Even if the Terms & Conditions are available to consumers, the companies involved in these ‘subscription traps’ rely on the fact that many of us can be blinded by these great offers and as a result don’t read the Ts&Cs, which has a negative effect on our bank balance.”

And Andy had this caution for consumers: “Very few, if any companies, will offer you a trial of anything unless it is going to lead on to further purchases and this is often done by an automatic renewal system which places the responsibility on the customer to actively cancel an ongoing contract. In most of these cases the customer doesn’t realise what is happening until the next payment or maybe the payment after that when the money they knew they possessed had just disappeared.”

But is there any protection for consumers in such circumstances? People shopping online within Europe are protected by the Consumer Contracts Regulations which came into force in June 2014. They state that a consumer needs to actively ‘tick’ a box to say they agree to any further payments. If a consumer is not made aware of any further charges, they are not liable for them.  Pre-ticked boxes are also banned.

The regulations also mean that consumers have a 14 calendar day cooling-off period, during which a contract can be cancelled for any reason, including a change of mind. Unless otherwise stated in the terms and conditions, consumers have to pay the return postage costs. The trader must then provide a refund within 14 days.

However, in some of these cases, the products are only distributed through a European channel and the manufacturer may be in America or the Far East, which makes getting a consumer’s money back more challenging.

If you find yourself in a position where you have ongoing payments being taken from your account, contact the UK European Consumer Centre for advice on 01268 88660 – weekdays between 9am and 5pm.