Beware of Online Subscription Traps, Warns Citizens Advice Scotland

March 15, 2016

Consumers across Scotland have been warned to watch out for traps laid by online service providers who use underhand tactics to trick unsuspected people into long-term financial commitments.

Citizens Advice Scotland has said that the issue is an increasingly serious one with more and more people apparently agreeing to make regular monthly payments for long periods without really understanding what they’re signing up for.

Part of the problem is that consumers often find themselves agreeing to the terms of Continuous Payment Authorities (CPAs), which effectively allow service providers to take money directly from people’s bank or credit card accounts.

Unlike with Direct Debits, CPAs allow companies to alter the amounts being charged as they choose which can soon leave consumers with a serious financial headache.

Worryingly, research from Citizens Advice Scotland has found that roughly 81,000 Scots have been prevented from cancelling a CPA subscription despite the fact that they have a legal right to do so.

Furthermore, some 75 per cent of all Scots, which equates to around 4 million people, do not know the difference between Direct Debits and CPAs, according to Citizens Advice research.

“Many online companies are luring people into signing up for long-term subscriptions, often without even realising it,” said Fraser Sutherland from Citizens Advice Scotland.

“We’ve all seen pop-up adverts for a ‘free trial,’ e.g. of a healthcare product, like slimming pills. Unfortunately in many cases these end up being anything but free.

“The internet is a fantastic tool for consumers, but it brings with it many traps and scams. We need to iron these out, so that people can enjoy the online experience without having to worry about whether they are being exploited.”

More than 2 million Scots are believed to have signed up for some form of CPA over the course of the past 12 months.

As many as 30,000 people living in Scotland are thought to have been rejected by their banks after making requests for specific CPAs to be stopped, despite high street banks being legally obliged to stop these authorities on request.

If you are finding it difficult to manage your personal finances, Scotland Debt Solutions may be able to help. Call us today to arrange a free consultation.

John Baird

Insolvency Adviser

Tel: 0800 063 9250

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