Craig Reucassel:
Now look, subscriptions – they can be tough to get out of. The new model is kind of getting you into subscriptions. So many things want to get you into it. Steve texts in. He says, ‘I ordered a product to try and stop my jack russell pup from peeing in the same spot. The kit contained a deodoriser as well, being about 500 mLs which I thought would last a while. The next month I received another delivery and money deducted from my bank account. Yeah, so I ended up having to phone up to get out of this subscription.’ So, phoning up thinking you’re getting a single product, but you actually end up in a subscription It can be quite difficult.
Somebody else says, ‘Good morning, The Australian newspaper – very hard to cancel the subscription. You have to call to cancel, and the phone line took me several goes over several days to speak to a person who could cancel the subscription, but only after the next payment,’ says Carly. Yeah, that’s absolutely the case. I think The Chaser website at one point had a thing where it could automatically help you unsubscribe from The Australian website as well.
Somebody else says they got ‘anti‑advertising for TV – didn’t work and couldn’t unsubscribe. Had to change bank details. What a nightmare.’
And somebody else says, ‘It’s easier to get out of Long Bay Jail than a Fitness First contract.’ Yeah absolutely, I totally agree with that. But what’s going to be done about this? Well, the federal government is proposing new laws to make it illegal. Assistant Competition Minister Andrew Leigh is making a speech in Canberra about the new legislation today. He joins us now. Morning Andrew.
Andrew Leigh:
Good morning Craig, great to be with you.
Reucassel:
Yeah, good. So, talk us through the subscription traps that you’re going to be looking at. It’s not your kind of Fitness First, is it? What is it you’re going to be trying to get rid of?
Leigh:
It’ll be across the board Craig. Right now, subscriptions are incredibly useful in many Australians’ lives. But too many of us find that when we want to quit them it’s a bit like the Hotel California situation – you can check out but you can never leave. And so we’re making it more straightforward by putting control back in the hands of consumers. It’ll be a breach of the consumer law if you attempt to trap consumers in subscriptions by for example, allowing them to sign up online but then requiring a physical phone call in order to cancel.
Reucassel:
Yeah okay, so that will be – so, you will be able to kind of cancel the same way you signed up. Is that part of it?
Leigh:
That’s right, yeah. It should be as easy to get out of the contract as it was to get into it.
Reucassel:
Halle‑bloody‑lujah!
Leigh:
No more of this ‘confirmshaming’ approach whereas somebody tries to leave, you have a tiny little faint text saying, ‘confirm cancellation’ and a big button saying, ‘No, I want to stay.’ There’s lots of little tricks that are going on, basically hacking our psychology and the fact that sometimes we’re just too busy to fight the online systems. I was talking to somebody the other day who said that she’d cancelled a credit card because she found it was easier than trying to get out of the subscriptions that were linked to the credit card.
Reucassel:
I think that is a few people’s approach actually. It can be an absolute nightmare to actually get – and to even figure out, I mean, I think it’s interesting. One of the things – I don’t know if you’re looking at this, with rolling subscriptions, so streaming services and that kind of thing, most of them will not tell you each month that they’re deducting money from you. Some of them do. I think Paramount’s a good one. They will kind of say, ‘Hey, we’re about to deduct from your bank account again.’ Most of them don’t do that. And this can lead to you sometimes having multiple subscriptions and not even realising it. Is part of your policy to make sure people are told, ‘Hey, just a reminder, we are charging you for this?’
Leigh:
Yeah, there’s not going to be a mandate for monthly emails and certainly we’ve had a conversation with some of the providers about this. Personally, I really like it. You know, I have some problems with Apple, but Apple on subscriptions is terrific. You get a monthly email for all your subscriptions and you can cancel them all at one place on your iPhone or iPad. Others firms though say that customers don’t want to be getting a monthly email saying that money’s coming out and so then, you know, they’ll need to show that they are complying in broad terms with the rules around subscription traps.
Reucassel:
Yeah, absolutely. Now we’ve got Liz on the line. Morning Liz. What have you struggled to get out of subscription-wise?
Caller (Liz):
Well, I think one thing you’ve got to do is have time and patience and be really tech savvy. But I was on Audible and I am with Prime. And with the Audible, I wanted to not, you know, proceed with the subscription, and it took me forever to find it. Eventually I scrolled down to one of my, you know, places and found that I could make a phone call and the phone call was to America.
Reucassel:
Gee whizz.
Caller (Liz):
It was just crazy as. Crazy as, you know?
Reucassel:
It is crazy. Exactly. Hopefully these laws will solve it. Thank you Liz. You see a great example there from Liz. So are you kind of making it so it’s as easy to find the cancel button as it is to find the subscribe button as well?
Leigh:
Yes, exactly. It should be as straightforward to go out as it was to come in. And in fact, Amazon has recently been sued by the Trump administration for subscription traps around Amazon Prime in the United States. It was a US$1.5 billion dollar settlement in the United States. Amazon Australia has told me that they’re fixing their practices. But historically Amazon has not been good on subscription traps.
Reucassel:
I literally spent some time on the weekend trying to get out of Amazon subscriptions. It’s extraordinary. You’re also looking at drip pricing. Explain the examples of drip pricing. What are you looking at here?
Leigh:
Well, drip pricing is when you go to buy a product and you discover that there are mandatory fees only revealed late in the purchase process. So, for example, you might go and buy a concert ticket and discover at the end that there is a mandatory processing fee. Or you might sign up for an internet service and discover at the end that there’s a mandatory installation fee that wasn’t disclosed at the start.
What we’re saying Craig, is that if there is a mandatory fee and then it needs to be advertised upfront. And that’s good for consumers, but it’s also good for competition because right now you’ve got honest firms that are advertising all their fees up front being undercut by dishonest ones who are pretending that their price is lower than it really is.
Reucassel:
When will we see this legislation come into force?
Leigh:
We’re aiming to bring the legislation in next year. We want to get moving on this. We’ve got agreement from states and territories through the Consumer Ministers meeting that I convened in Canberra recently. And that means that the state and territory consumer regulators will also be enforcing these laws.
Reucassel:
Okay, so if the legislation passes next year will it be coming to power immediately or will there be like a kind of year wait or anything?
Leigh:
Typically there’s a bit of time between when the legislation passes and when it comes into force. We’ll come back to you on the precise details. We’re just keen to get it done as quick as possible. And so, the federal ACCC and all those state and territory consumer regulators can get out there and crack down on processes that are, I think, annoying a lot of Australians.
Reucassel:
Yeah absolutely. Well Sue’s on the line. Morning Sue, what’s your experience?
Caller (Sue):
I’m being taken to debt collectors for something I didn’t order, and the bank had already cancelled my credit card because somebody had tried to do a fraud transaction.
And the courier where they delivered it wouldn’t take it back to the company and so I’m stuck with it now. It’s less than $100, but on principle I refuse to pay it.
Reucassel:
Yeah, I can imagine Sue. That’s a nightmare this example. Well hopefully this legislation will make a difference when it comes in next year. Thanks for speaking to us this morning Andrew Leigh.
Leigh:
Real pleasure. Thank you Craig. And in Sue’s case, it may be that existing consumer laws will cover that. Certainly, they do cover misleading conduct. So, I would encourage Sue to get in touch with the ACCC or her state or territory consumer regulator just in order to see whether they’re able to do something under the existing system. But as you say, things will get better under the new laws.
Reucassel:
Let’s hope. There you go Sue, bit of a tip from Assistant Competition Minister Andrew Leigh.