Sahar Lone: Consumer NZ spokesperson issues warning about 'subscription traps'

More consumers are falling into subscription traps - prompting warnings from advocacy groups. 

The Commerce Commission has filed criminal charges against HelloFresh.

It's accusing the meal company of reactivating subscriptions without clearly seeking customers' permission - during cold calls between February 2022 and July 2023.

Consumer NZ's Sahar Lone says it's important to check your bank account regularly to offload anything you don't need - and to check the terms and conditions of any new subscription.  

"There's also reading the T&C's before signing up to make sure there's no hidden costs or cancellation fees - you can diarise renewal dates...you can make sure that doesn't keep rolling on."

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Episode Transcript

Speaker 1 (00:00):
Do you how many subscriptions do you have? I was
counting up mine today at least thirteen subscriptions for Netflix
and iCloud and all that sort of stuff. Consumers, that's us.
We're being warned of subscription traps as meal kit company
hellow Fresh is facing criminal charges. This is from the
Commerce Commission. They say that the Hello Fresh business misled

(00:26):
its consumers during cold calls. They offered a discount voucher
without making it clear that this reactivated an old subscription.
Sahar Loan is with Consumer enz Edge's with me this afternoon.
Hi Saha, Hi Ryan, how are you very good? Thank you.
Let's talk just generally about this subscription issue. What is
a subscription trap? What does that mean?

Speaker 2 (00:49):
Well, let's start with what's not a subscription trap? So
people should be able to understand what they're signing up
for and be able to cancel subscriptions and services really easily.
So when that doesn't happen, you know, if a company
makes you jump through hopes essentially just to opt out,
that's when it becomes a trap.

Speaker 1 (01:08):
Is it something that's easy to get into, hard to
get out of?

Speaker 2 (01:12):
Yeah, that's exactly right. And I think you know businesses
are incentivized to make it hard to quit because they
want you to stay with them, they want, you know,
customer attention. So I think that's where things are starting
to get a bit trickier.

Speaker 1 (01:26):
What does the law actually say about you know, what
rules do you have to follow to cancel subscriptions?

Speaker 2 (01:33):
So there is a little bit of a gap there.
So there is the Consumer Guarantees Act, which requires traders
to exercise reasonable care and skill, and then there's also
the Fair Trading Act, which prohibits misleading and deceptive conduct
and unfair contract terms. But neither of those addresses some
of the you know, those really questionable subscription cancelation practices.

(01:56):
And in the US we've seen a click to cancel bill,
So some of those rules would actually make it a
bit simpler for people to get out of a contract
the same way they got in.

Speaker 1 (02:08):
What does that mean? You just one click and it's over.

Speaker 2 (02:11):
Yeah, one or two, or you know, rather than having
to make a phone call or you know, some gyms
will make you actually go into cancel rather than doing
it online.

Speaker 1 (02:22):
So you can sign up online, but you have to
go in personally to get out of it.

Speaker 2 (02:27):
Yeah, in some cases with apps, for instance, you might
be looking for the actual mechanism or the button or
where that lives, and so it's increasingly harder for people
to understand how to actually get out of that.

Speaker 1 (02:40):
So if people and it seems an odd thing to say,
I mean money's tight at the moment, so you would
presumably know if you had subscriptions you didn't need that
you were paying for. But if people discover that they
are paying for stuff that they don't actually need or
don't want anymore, what advice do you have for them?
What should they do?

Speaker 2 (02:57):
Well, there's a couple of things you can do. You know,
having a through your bank account is a good way
to start, So you might want to sit down once
a year and look at what's going out of it
in case there's something you haven't realized you'd like to
get out of. There's also just reading the t's and
c's before signing up to make sure there's no hidden
costs or cancelation fees. You can diorize renewal dates. Say

(03:20):
you're signing up for a free trial and you just
want to make sure that that doesn't keep rolling on
after you intend it to last, or if you don't
actually appreciate the service. You can also document any attempts
to cancel that service and use that for chargeback request
for your bank. If you have no luck with the
service itself and you decide you need to escalate it.

(03:43):
There's also going to the Commerce Commission to complain if
you think that that difficulty of experience could be the
result of a breach. Okay, so it sounds like a lot.

Speaker 1 (03:55):
I just want to breach one buttons. Bugger off.

Speaker 2 (03:59):
You know that's the point. That shouldn't really be a pain.

Speaker 1 (04:02):
It shouldn't. It shouldn't, sah Thank you for that, Saharlan,
who's with Consumer in Z. For more from Hither Duplessy
Allen Drive, listen live to News Talk zid B from
four pm weekdays, or follow the podcast on iHeartRadio.