Jess Ong:
Now, this might be the situation at your house as it is at mine. You know, every now and then you’ll decide, ‘oh, I want to have a new movie in my life or a new TV show’. So, you go to one of those streaming services, you sign up, you get lured into some deal because you get a month or 2 free and you think, ‘oh, yeah, I’ll set a reminder in my calendar so I can cancel before I’m charged that next amount’.
And then that month comes around and you go to cancel it, to cancel your subscription. And it is just so hard to do. You’re on a loop, going round and round. You might even need to call a call centre to cancel your subscription. So, then eventually you run out of puff and you just give up and these people win and it just happens over and over again.
You’re basically stuck in a subscription trap. I wonder whether that’s your situation like it is at my house every now and then. These subscription traps, they’re not illegal in Australia, but the government does have plans to change that, and Dr Andrew Leigh is the Assistant Minister for Productivity Competition, Charities and Treasury. Hello Minister.
Andrew Leigh:
G’day Jess. great to be with you.
Ong:
Why is this of national interest? Subscription traps, why is that on your radar?
Leigh:
Three out of 4 Australians with subscriptions say they’ve had a negative experience from trying to cancel one. And as many as 1 in 10 have actually given up trying to cancel a subscription and just kept on reluctantly paying for the service. I’ve heard stories from people who’ve cancelled a credit card because it was easier than cancelling the subscriptions that were attached to it. Many subscriptions can be useful. They can make daily life more straightforward. But it ought to be as easy to cancel a subscription as it was to start it in the first place.
Ong:
Absolutely. You don’t really think about that when you’re signing up for that free month of your streaming service. You just think, ‘oh, this should be a walk in the park, like it was to sign up. Surely it’s the same thing when I want to cancel it?’
Leigh:
Exactly. And many of us find it’s a bit like the Hotel California situation. You can check in any time you like, but you can never leave. So, what we want to say to these platforms is if you’re offering subscriptions, then don’t make it hard to quit. Don’t use these psychological traps and tricks. What one psychological researcher has called ‘confirmshaming, in which as you try to leave, you’re asked ‘are you sure you don’t want to keep enjoying the benefits of this service?’ and then in a tiny little greyed out box that says, ‘yes, confirm cancellation’. Don’t play those tricks with your consumers. Just treat us honestly and upfront. Don’t make us jump through hoops to cancel.
Ong:
Do you know how much these subscription traps are costing Australians each year?
Leigh:
The Consumer Policy Research Centre estimates it’s $46 million a year, which is nearly 2 bucks a year for every Australian. So, it’s a pretty substantial cost and it’s also hurting the competitive ecosystem.
So, we don’t want a competitive dynamic where firms think they have to pull a fast one over their customers in order to win business. Firms ought to be competing based on offering good prices and great services, not on competing with subscription traps from their competitors. So, these reforms that we’re putting in place with the support of states and territories are going to ensure a level playing field.
Ong:
It is 16 past 2 on ABC Radio Darwin and the Northern Territory. You’re hearing from Dr Andrew Leigh. He is the Assistant Minister for Productivity, Competition, Charities and Treasury. Having a chat to me, Jess Ong about subscription traps. That’s the name for that cycle you get into when you sign up for something, you think you’re getting a good deal and then it is really hard to cancel your subscription. Sometimes you just don’t even bother.
Deb in the Doo saying to cancel the myriad of subscriptions that my husband had. I just cancelled all of our credit cards and ordered new ones. Ain’t nobody got time to deal with their crap reckons Deb in the Doo.
So, something you just also said there Andrew. People, you know, cancelling their cards in order to just get out of a subscription cycle. Why hasn’t this been addressed before? Why hasn’t this been on the radar of other governments given how much it is costing Australia each year?
Leigh:
Yeah. Subscriptions are just becoming bigger and bigger. And it’s not just online services. People are signing up to a 24‑hour gym on their app these days, whereas a couple of decades ago you would have walked in and paid a regular subscription fee with a credit card or cash. So, they’ve become an important part of modern life.
We’re not getting rid of subscriptions, we’re just saying to firms that they need to be honest with their customers. And we’re seeing this right around the world. The United States Federal Trade Commission just took an action against Amazon for subscription traps which saw a $2.5 billion settlement. So, it’s an issue that’s raising the ire of competition regulators around the world.
Ong:
You said just a little bit earlier that these proposed changes that you’re putting forward, they have the backing of state and territory governments. What does the Northern Territory Government need to do locally to enact these changes?
Leigh:
Well the reforms will go through consumer law, which is legislation that’s passed through the national parliament. But then what’s key is that the NT will be enforcing it as well. So, it won’t just be the federal competition consumer regulator – the Australian Competition Consumer Commission, it will also be all of its counterpart fair trading bodies. They’ll be the eyes and ears out there cracking down on subscription traps and using the increased penalties we put in place. So, those penalties go up to $50 million, thanks to changes we made during our first term.
Ong:
Wow $50 million. That’s fairly significant. Have you had any feedback from, you know, companies or businesses who are offering these subscriptions that people often get stuck in?
Leigh:
We had an extensive consultation process and as you’d expect, some of those offering subscriptions said ‘nothing to see here, no problem at all’. The fact is, as soon as you go to the consumer groups, as soon as you ask regular constituents what’s going on, you get this cavalcade of stories about problems that people have had cancelling subscriptions.
So, we’re cracking down on them, along with unfair trading practices and drip pricing. And it’s been a really productive reform. We had all of the state and territory consumer ministers here in Canberra on the 21st of November, and that’s where we agreed to make the crackdown.
Ong:
And do all states and territories agree with this? You know, everyone’s on board?
Leigh:
Absolutely. Yes. Strong agreement from states and territories. And the bipartisan nature of the reform, I think, really does indicate the depth of feeling that people have towards it, and also the way in which good businesses can do better by having an appropriate subscriptions policy. So, 9 out of 10 people say that they’d be more likely to do business with a firm if they had proper subscription practices that made cancellation easy.
Ong:
And does this extend – you know, at the moment we’re talking about things that you’re paying for, you know, like streaming services or access to news sites behind paywalls. Gym memberships is also something you mentioned as well. But what about, you know, when you’re just hounded by emails as well? You know, where companies may just spam market you all the time and that’s a really difficult thing to get out of as well in terms of unsubscribing. Does it extend or are there ways or thought to extend it that far also?
Leigh:
Yeah, it’s a great question Jess. I mean, this is focused around the issue of payments which are coming out of your account. The consumer law is largely about commercial transactions, but that ongoing email harassment really is a big issue.
Our focus has been principally on the most brutal end of it, which is the scams. And we’ve set up the National Anti‑Scam Centre and resourced that appropriately in order to try and tackle scams. But I share your frustrations in terms of websites that just won’t let you appropriately unsubscribe from their marketing emails.
Ong:
What’s something you’re trying to unsubscribe from?
Leigh:
I used to be an academic and I have not been an academic for 15 years but somehow they have found my old email address and they keep on sending me invitations to present at conferences and places far and wide. Academic spam turns out to be a real thing, even when you’re 15 years on from being an academic.
Ong:
I’ll have to trust you on that one Assistant Minister. So, what’s the next steps? There’s consultation on a draft for this new law. When’s that set to take place?
Leigh:
Yeah, we’ll consult in the early part of next year and then bring legislation into parliament. There’s a lot of enthusiasm to get this done quickly. The work with the states and territories has enthused us and we want to get the crackdown going as quick as possible.
Ong:
All right. Good to talk to you, thank you.
Leigh:
Likewise, thanks Jess.
Ong:
That’s Dr Andrew Leigh. He is the Assistant Minister for Productivity, Competition, Charities and Treasury talking about subscription traps you may not have realised that you were caught up in.