Yes, people often forget to cancel their monthly subscriptions — and the costs add up

Many consumers forget to cancel their monthly subscriptions, leading to unnecessary or unwanted expenses.

The challenge of subscription services: Consumers often subscribe to services such as streaming platforms or delivery services, but forget to cancel when these become redundant.
* Economist Neale Mahoney discovered a significant increase in cancellations carried out when customers are alerted to update their card information when it expires, implying people tend to forget about their ongoing subscriptions.

The cost of forgetfulness: The research found that average subscription cancellations stand at roughly 2% per month, but increase to around 8% in the months when customers are asked to actively renew their services.
* Consumer advocates suggest that businesses are profiting from customers’ forgetfulness and inertia, calling subscription services a “cash cow for companies”.

Challenges in cancellation: Customers often encounter difficulties in trying to cancel their services, with some businesses making the termination process intentionally difficult.
* Homeowner Deb Shelby had to make seven phone calls to cancel a non-functioning home security system subscription, suggesting a level of resistance from businesses in allowing subscriptions to end.

Proposed solutions: The Federal Trade Commission is considering a “click to cancel” rule that would require companies to make subscription terminations as easy as starting them, and would also necessitate annual reminders to customers of their active subscriptions.
* Economists argue that infrequent, perhaps bi-annual, reminders to renew could significantly reduce unwanted payments.

The irony: Mahoney notes that a new industry has sprung up to help consumers spot and stop unwanted payments – these services are, predictably, offered as a monthly subscription.

View original article on NPR

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