A television star's fitness app has been called out by consumer protection advocates for its "difficult" subscription model after a survey found Australian businesses regularly try to guilt their customers into staying in subscriptions they don't want.
A report by the Consumer Policy Research Centre (CPRC) surveyed 1,000 Australians on their experiences with 'subscription traps' — that is, businesses who make it difficult to cancel their services and trap customers by making the opt out process long and labour intensive.
"Our research into subscription traps found that three in four Australians have experienced some form of negative experience when trying to cancel a subscription," the report said.
"This can include feeling pressured to keep a subscription or giving up and continuing to pay for a service you no longer need.
"Many survey respondents found the practice annoying or deceptive."
Bachelor Sam Wood's fitness app 28 by Sam Wood was highlighted in the survey as having a particularly difficult cancellation process for its $58.99 per month service.
"Health and fitness services have always been notorious for making it difficult to unsubscribe and online versions of these are no exception," the report said.
"The online fitness program, 28 by Sam Wood, uses false hierarchy and confirmshaming across multiple screens throughout the cancellation process, making it difficult to unsubscribe from the program."
The first screens a customer is presented with when they look at cancelling. ( Consumer Policy Research Centre)
Customers are made to click through a number of 'confirmation shaming' pages before getting to the cancellation stage. (Consumer Policy Research Centre)
Confirmshaming refers to a process that uses language in order to illicit guilt or negative emotions from customers for choosing not to engage with a service or feature.
False hierarchies are used to promote a certain option or hide others.
"The link or button to cancel the subscription is either in fine print or a lighter colour," the report said.
"The process — which takes a minimum of five screens — also includes grandiose affirmations of the expense being an investment, further shaming consumers as they proceed with the cancellation process."
A spokesperson for 28 by Sam Wood said the report was noted.
"Improving the experience for our 28 by Sam Wood customers is an ongoing priority for our business," they said.
"We will take these findings into consideration and review internally."
You can sign up, but never leave
CPRC's deputy chief executive Chandni Gupta said the increasing popularity of the subscription model had made things more difficult for consumers.
Chandni Gupta, deputy chief executive of the Consumer Policy Research Centre
"You can sign-up any time you like, but you can never leave; with sign-ups taking mere seconds, while cancelling can be a difficult, frustrating and time-consuming ordeal," she said.
The report found 75 per cent of customers had some kind of negative experience trying to cancel a subscription, and 30 per cent have felt pressured to keep a subscription they wanted to cancel.
Survey respondents also shared:
- I didn't get notified by a company that my free trial was going to end. They ended up charging me a great amount of money.
- Sent on a merry go round of automated options & questions. Finally get through to a person who has to convince you to stay and asks a lot of questions. Took approximately one hour on phone to cancel.
- Cancellation seems to involve multiple pages asking, "Are you sure…?", very small print, as opposed to the BOLD for signing up, and in some cases, having to actually phone the organisation despite all other correspondence being electronic.
Consumer advocates call for law changes
Ms Gupta called on the Australian government to adopt similar legislation to the recent Digital Services Act in Europe, which came into effect in February.
The act is aimed at cracking down on illegal content, transparent advertising and put obligations on all digital services to better protect consumers.
"Australia lags in consumer protection – it's time for our laws to catch-up with global best practices," she said.
An Australian Competition and Consumer Commission spokeswoman said some regulations for subscription traps were already embedded in Australian Consumer Law.
"Businesses that operate a subscription trap business model may breach the ACL," she said.
"For example, where a business makes a false or misleading representation in either the sign up or cancellation stage.
"Depending on the circumstances, non-disclosure, or insufficient disclosure, may also be misleading or deceptive conduct under the ACL."
The spokeswoman said the ACCC would continue to advocate for unfair trading practices to be introduced into ACL to cover some of the broader problems outlined in the report.
Assistant Treasurer Stephen Jones said consumers were at the "heart" of the government's economic agenda. (ABC News: Ian Cutmore)
Assistant Treasurer Stephen Jones said the government was working on a solution.
"Practices like subscription traps or drip pricing are egregious business practices that are frustrating at best, but often have deeply concerning financial impacts," he said.
"There is no good reason for the loopholes for a consumer to simply unsubscribe from a product employed by some unscrupulous businesses.
"The Albanese government has consulted on a prohibition against unfair trading practices and we are carefully working through options for reform."