New York – Automatic payments certainly make paying bills easier. However, it also puts consumers at greater risk for unexpected subscription fees. According to a new Bankrate study, more than half of U.S. adults (51%) who have ever had a subscription or membership account have incurred unwanted charges (such as a free trial that turned into a paid subscription without their permission/knowledge, accidentally signing up for a membership, forgetting they signed up, etc.). For more information click here.
Younger generations tend to fall victim to these situations more frequently than their elders.
Millennials, ages 26-41 (58%) and Gen Zers, ages 18-25 (57%) have had this happen the most, well ahead of Gen Xers, ages 42-57 (48%) and baby boomers, ages 58-76 (45%). They’re also much more prevalent among higher-income households (59% in households making $100,000 or more) compared with middle-income (51%, between $50,000 and $99,999 of annual income) and lower-income (49%, under $50,000).
Over a third of U.S. adults (34%) who have had a subscription/membership account say it’s difficult to cancel or turn off automatic payments for subscriptions or memberships. That includes 10% who say it’s very difficult. Older Americans are much more likely to find terminating the service somewhat or very difficult compared to younger adults (41% of boomers vs. 28% of millennials).
These unsought charges can really add up. Recent data from Chase shows that 71% of Americans waste more than $50 per month on unwanted subscription fees. As a result, several credit card issuers and networks have taken steps to protect consumers.
“Unwanted subscription fees are a significant pain point for consumers. On the bright side, Visa and Mastercard have both introduced consumer-friendly policies that require merchants to disclose free trial and recurring payment terms more clearly, including instructions for how to cancel if desired. Still, some merchants surely aren’t following the rules properly, and in other cases consumers are overlooking the key details,” said Ted Rossman, senior industry analyst at Bankrate.
Perhaps due to more time to take online classes or watch streaming services at home, 54% who have incurred unwanted charges have had this happen since the COVID-19 pandemic was declared in March of 2020. This includes 71% of Gen Zers, 61% of millennials, 49% of Gen Xers and 41% of boomers. More than half (65%) who incurred unwanted charges had this experience happen prior to the start of the pandemic. That includes 18% who said it happened both before and after March 2020.
Rossman notes, “With streaming platforms and other subscription services continuing to grow in popularity, this will remain a key issue for quite some time. If you need help staying on top of this, I like how Chase lets credit cardholders track where their card number is saved. Capital One is another card issuer with helpful tools for keeping track of your recurring payments and free trials.”
Bankrate.com commissioned YouGov Plc to conduct the survey. All figures, unless otherwise stated, are from YouGov Plc. The total sample size was 2,497 adults. Fieldwork was undertaken January 12-14, 2022. The survey was carried out online and meets rigorous quality standards. It employed a non-probability-based sample using both quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.