Oliver Peterson:
It’s 8 past 3. You know that free trial that you signed up for but maybe you forgot to cancel? Do you realise how much you are actually paying? And I’m talking about streaming services, apps, airline bookings, gyms, antivirus software – the list goes on and on. Now you might not even realise the few dollars that you are missing. Well, the federal government wants to do something about it and crack down on these hidden fees and charges. The Assistant Minister responsible is Andrew Leigh, who is drafting some new laws and he joins you and me live on Drive. Good afternoon!
Andrew Leigh:
Good afternoon Ollie, great to be with you.
Peterson:
Good to have you on the program there Assistant Minister. What are you trying to stop with these new laws?
Leigh:
Well, subscriptions are super convenient. Many of us use them for magazines, meal delivery, streaming services, fitness memberships and software. But too many Australians are finding it hard to get out of their subscriptions Ollie. Three out of 4 Australians with subscriptions have been caught in subscription traps. And one estimate says it’s costing the country $46 million a year. So we’re putting in place reforms which will make it as easy to end a subscription as it was to start it and stop these ‘dark practices’ that make it too difficult for people to get out of a subscription when they’ve decided they’ve had enough.
Peterson:
Why are you cracking down on this now?
Leigh:
Well, we know it’s been a big issue and we’ve done a couple of big consultations on this with consumers and industry groups last year and the year before. Based on that, we’ve now got these draft laws out there just for a short, sharp consultation for a couple of weeks. We’ve got agreement from states and territories to work on this, which is really important because it means that WA Fair Trading and the Australian Competition Consumer Commission will be enforcing these laws when they’re in place.
Peterson:
What are the kind of hidden fees or subscriptions that have particularly prompted this Assistant Minister?
Leigh:
Look, it’s everything from the virtual to the in‑person. It’s incidents like when we hear about subscriptions that can be signed up for on an app, but then when you want to cancel they tell you to have to go and find a person. You know, it reminds me of the ‘Hitchhiker’s Guide to the Galaxy’ thing where he says, ‘Well you could have seen the Council plans. You just had to go on a Thursday afternoon down to the basement, past the Beware of the Dog sign…’.
So you know, people are having to jump through these hoops. And I’ve even spoken to people, Ollie, who say that they’ve cancelled a credit card because it was easier than cancelling the underlying subscriptions. It just shouldn’t be that hard to get out of a subscription. And people tell us that if it was easy to cancel a subscription, 9 out of 10 would be more likely to do business with that company in the future.
Peterson:
1300 222 720 our talkback number. You might have some examples of your own. Those hidden fees or subscriptions that are so difficult to cancel. You just heard Assistant Minister Leigh indicate an example there of somebody who had to cut up their credit card. It was easier to do that than actually cancel the subscription. So ultimately Assistant Minister, the next time we go to book a flight or sign‑up online and maybe not next time, it’ll take a little longer to get through the laws and through the parliament. But ultimately, what would you like to see change?
Leigh:
Well, I’d like people who are offering subscriptions to offer an easy way out. They should clearly disclose key information before they sign people up for a subscription. If a free trial is about to end, you need to tell the customer before you roll them over to the paid service. And you’ve got to provide customers with an easy and straightforward way to cancel a subscription.
I’ve had a beef with Apple on various things they’ve done, but Apple on subscriptions is actually a pretty good player. They provide monthly emails and you’ve got a one stop shop on your iPhone where you can cancel a subscription when you want to. That sort of model shows that you can make plenty of money in business while offering fair subscription cancellations to your users.
Peterson:
If companies ignore these new laws, what will happen to them?
Leigh:
Well, the fine is pretty substantial. It’s the greater of $50 million, 3 times the value of the benefit from the breach or 30 per cent of turnover. So for multi‑billion‑dollar firms, these could be multi‑billion‑dollar fines. We hope it doesn’t come to that. We hope that firms just step into line and do the right thing by their customers. Because we know that subscription traps are a bane of many people’s existence and that’s why we’re getting rid of them. It’s got cost‑of‑living benefits, but it also means that other firms don’t feel as though they have to pull a swiftie over their customers in order to gain market share. We’re setting a level playing field for everyone. Do the right thing by your customers if you’re offering subscriptions.
Peterson:
Is that hard to enforce though? If they’re operating in a global online marketplace?
Leigh:
No, those firms are subject to Australian law if they’re offering services to Australians. We already do that. For example, charging GST on low value parcels that are coming into the country. And those streaming services are subject to GST in the same way. So similarly, the consumer protections will apply to them, just as they’ll apply to a local fitness centre. People will just have to offer a fair deal if they’re offering subscriptions to consumers.
Peterson:
Just stick with me for a moment there Assistant Minister. I want to bring in Dave who’s got a question, and you might be able to help him with that one. Good afternoon to you Dave.
Dave (Caller):
Hi Ollie and Assistant Minister. I was subscribed to a streaming service. I cancelled and about a year later I suddenly got a charge on my credit card. When I queried it, they reversed it straight away. What concerns me is that they still have my banking details. I believe that if you cancel a subscription, that organisation should be duty bound to cancel all your details.
Peterson:
That’s a good comment there from Dave. Is that a possibility there Assistant Minister? That once you have unsubscribed, then the onus would be on the company to then delete all of your data?
Leigh:
Yeah David, certainly sounds like good practice to me because companies are of course liable if their data systems are breached. So holding too much credit card data isn’t just a risk to you, it’s a risk to the company itself. Consumer law doesn’t tend to go down to that sort of micro level of managing business, but if you ask a business to get rid of your credit card details, it seems reasonable to me that they should do that.
Peterson:
Just finally Assistant Minister, people can be pretty cynical about this sort of stuff. Will they work, these new laws?
Leigh:
Look, I think they’re going to have a big impact. At the moment, we’ve got laws that ban misleading and unconscionable practices but they don’t go as far as these laws. What this new ban on unfair trading practices, subscription traps and drip pricing will do is to put more power in the hands of our consumer regulators. They’re doing good work. We provided them with additional enforcement resources, but they also need the right laws.
Peterson:
Andrew Leigh, appreciate your time. Thank you very much.
Leigh:
Thanks so much Ollie.
Peterson:
He is the Assistant Competition and Treasury Minister, Andrew Leigh joining us on 720 ABC Radio Perth.