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If you’re paying out on subscriptions you don’t use or need, it’s tempting to pull the plug by cancelling payments, but you must check the small print first to avoid being clobbered with bigger bills.
Signing up to the likes of Netflix, Amazon Prime or for beauty boxes or snacks by post is easy, but when it comes to cancelling, you need to check the rules.
How do subscriptions work?
Subscriptions can work in different ways. With some, like gym memberships, you may sign up for a minimum period, like a year, but still need to give notice or the contract may ‘auto renew’.
Many of the streaming services like Netflix or Apple TV have monthly ‘rolling contracts’, which means you’ll typically need to give 30-days' notice or risk shelling out forever.
Subscription contracts boomed back in lockdown, with two in three households having an average of seven, and spending over £550 a year. Many of us have since cut back, ditching over 1.5 million services, including Netflix, Amazon Prime and Disney+ in the first three months of 2022.
But we still spend a whopping £1.8 billion a year on subscriptions that are poor value for money, according to government research. New rules making it easier for customers to cancel, and clamping down on subscription traps will be included within the Digital Markets, Competition and Consumers Bill. However, this is unlikely to come into effect until at least Autumn 2024.
How do I cancel subscriptions?
If you sign up and change your mind, in most cases, you get a 14-day ‘cooling off’ period, under the Consumer Contracts Regulations. This means you can cancel with the service provider and get a full refund.
However, the rules are slightly different with streaming services like Netflix, according to Matthew Cotton, a solicitor with Hedges Law. “In these circ*mstances, the subscription provider can only supply the digital content before the end of the 14-day cooling-off period if the consumer has given consent and waives their 14-day cooling-off period,” he explains.
With all subscriptions, once you’re beyond any cooling-off period, you should check your contract or the company website for cancellation terms. Details of whether you can cancel by logging into your online account or need to call should be included.
Once your subscription is cancelled, you can cancel future payments like direct debits with your bank. It's always worth keeping a screenshot of cancellation confirmations or emails, in case there’s any problem.
How do I find all my subscriptions?
If you can’t remember what you’ve signed up to, check if your banking app has a subscription management tool or log into your bank account for a list of direct debits and standing orders.
A ‘Continuous Payment Authority’ (CPA), can be harder to track down. This is when you make payment by giving a company the long number from your debit or credit card.
Some banks may list these under a ‘subscription’ list, but others may not have this option. In this case you may need to trawl through twelve months of bank or credit card statements checking for payments that may only come out once a year.
If you’re juggling multiple subscriptions, you could download a free subscription management app like LittleBirdie or RocketMoney.
How do I cancel a subscription that won't let me?
If your requests to cancel are ignored, (and you’re giving the relevant notice), your bank can cancel direct debits and CPAs, to stop future payments.
Ideally, you should contact the subscription company first, to check you’re beyond any minimum contract and giving the correct notice so you don’t incur penalty fees. However, banks can, and must, cancel CPAs when asked under rules set by the Financial Conduct Authority.
In certain situations you may be able to leave without giving the full notice. “There may be circ*mstances which make it “unfair” for the trader to continue the contract, for example if you are injured or have been made redundant and need to cancel your gym membership,” says Matthew Cotton.
“In these circ*mstances, a trader should allow the cancellation term or condition to be removed from the contract, to enable it to be cancelled before the end of any fixed term which may apply.” This comes under the Consumer Rights Act 2015.
If you’re struggling to pay, some companies may allow you to temporarily ‘pause’ subscriptions for a limited time.
How can I prevent subscription nightmares in the future?
Check small print before signing up
Note down when free trials end, and check minimum contract and cancellation terms before signing up.
With rolling subscriptions, like beauty boxes or delivery services, you’ll usually need to give 30-days notice to cancel.
Pay by direct debit
This makes for a much easier way to cancel than setting up a continuous payment authority. While your bank can cancel both, paying by direct debit means protection under the Direct Debit Guarantee. This means if mistakes are made, your bank will reimburse you.
Always tell the subscription company you’re cancelling before stopping payment.
Check your cancellation rights
Contracts may seem watertight, but if providers don’t fulfil their side of the deal, you may be able to cancel early.
With broadband and mobile deals, if the supplier tries to hike the price mid-contract, by more than any amount stated in the contract, (typically inflation plus a bit more), you have the right to cancel.
