BEN FORDHAM:
Now check your bank account. We're being warned about a dodgy practice called subscription traps. Australians are being stung by subscriptions that they simply don't use and they come in a number of forms; news websites, music platforms, phone apps, streaming services. You lock in with a click of a button and often you get a free trial and then suddenly you're rolled over for twelve months. Or they deliberately make it hard for you to cancel. Data from the financial institution ING reveals that some Aussies are losing more than $1,000 a year on unused subscriptions. The ACCC is urging everyone to conduct an audit of their bank statements. They're also calling for government intervention, as we've seen overseas. The Assistant Treasurer and Minister for Financial Services Stephen Jones is joining us this morning. Stephen, thanks for being with us.
STEPHEN JONES:
Good to be with you Ben.
FORDHAM:
How many subscriptions have you got?
JONES:
Look, last time I had a look, over a dozen. I was surprised, I've got to say. There were a few that I thought I'd unsubscribed to only discover that I was still paying. And I reckon I'm the same as hundreds of thousands of Aussies out there listening.
FORDHAM:
So, you've had some of those subscriptions where you've used it, then you haven't used it and you probably haven't realised you're still paying for it.
JONES:
Exactly right. Whether it was a magazine subscription, learn a foreign language subscription. I think you mentioned video streaming platforms. I've had a few there where I thought I'd cancelled, but for one reason or another, my attempts to cancel the subscription had not succeeded and that gets to the heart of the issue. Easy to subscribe, they make it very very difficult to unsubscribe and stop the money flowing to them.
FORDHAM:
What can we do about it?
JONES:
Looking into it Ben, the Australian Consumer Law has got a big gap in it at the moment and we want to fill that gap, proposing to look at two separate models. One is whether we just introduce a general prohibition against unfair trading, which this would clearly be an example of. They've done that in the United States. In some other countries, they've just targeted in on these subscription traps and said, "we're going to put a prohibition on the sorts of practices to lead to that".
FORDHAM:
Yeah, they've done that in the European Union, Britain, Singapore and America. But wouldn't the subscription companies, wouldn't they just say, "hey, buyer beware, you're the one who signed up for it"?
JONES:
Look, they may try and run that argument, but good luck when you look at how difficult it is to unsubscribe. There's a huge subscribe button on their web page and an almost impossible to find unsubscribe button. A process that makes it more difficult if you've lost your password, it might be difficult to get back into the site or confirm or do all the sorts of processes that are put in place. We want a simple process Ben.
FORDHAM:
Our money man on this program Peter Switzer told a story to us last week where he said, look, I was going through the business subscriptions in his business, and he realised that there were a lot of overseas publications that he was subscribed to. He tried to cancel them, but the publication said no, whoever took out the subscription needs to cancel. And he said, hey, I'm paying the bills. So, that goes to that tricky element. Right. And I know Netflix, for example, they pause accounts that have been inactive for two years. But that's a lot of time if you're paying $17 a month.
JONES:
Yeah, well, some of these platforms are pretty quick to suspend or cancel your program if you think that you're not complying with their terms and services. We want to ensure that we have the same swift response if a consumer wants to cancel the product. It seems pretty basic to us. So, a bit of a process we've got to go through, Ben. We'll kick off a consultation process very soon. We want to ensure that we don't create one problem while trying to fix another. But this one is definitely in our sights.
FORDHAM:
So, there's a possibility that we can put some new rules in place around these companies, including saying to them, we need a very clear, large cancel button.
JONES:
It seems to me to be that should be one of the things, plus just making it easier for people to back out. Yes, a large cancel button, but ensuring once you click that button, you don't have to go through a whole bunch of other unreasonable processes to cancel your subscription. And I note that last week, one of our major banks is introducing a service which will make it easier for their clients to just cancel at the back end, I think we'll start to explore all avenues to ensure that consumers are protected.
FORDHAM:
We're chatting to Stephen Jones, the Assistant Treasurer and Minister for Financial Services. You mentioned the banks. If I could raise another issue. Last year, 31,000 customers at the big four banks fell victim to fraud. They lost a total of $558 million Of those losses, the banks paid back a piddling $21 million, 3.7 per cent of the total. Are you considering following the lead of the United Kingdom, whereby law, from the start of next year, British banks will be required to reimburse fraud victims who've been tricked into sending money to scammers?
JONES:
Yeah, looking at this right across the board, Ben. Putting in place new obligations on banks and other companies, I should say, to refund customers if the bank's done the wrong thing will definitely be a part of that. Ensuring that banks lift their obligation to put in place more protect sorry, lift their standards, I should say, to put in place more protections is also going to be a part of it. So, right across what I call the fraud or the scam ecosystem, having new codes of practice. Social media companies, banks, telecommunications companies will be our starting point, because if we leave one of those areas unchecked, the scammers will just go to that. We need everybody lifting their standards together. You mentioned $500 million. The number actually right across the economy is closer to $3 billion that were lost last year in scams. That's a huge amount of money, that belongs in the wallets of households doing it tough. And we want to ensure that we're lifting the bar and going after the scammers who are preying on Australians.
FORDHAM:
Yeah, the big telecommunications companies need to take some responsibility, too, because that's how so many of the scammers climb through the window. We really appreciate you jumping on the line. Let's talk again.
JONES:
Good on you, Ben.
FORDHAM:
Good on Stephen Jones, the Assistant Treasurer. And just on the subscription issue, I love the line from the colleague of Stephen Jones, Andrew Leigh, who says, digital subscriptions are like the online equivalent of Hotel California. You can check out, but you can never leave.