Lurking on your bank accounts or credit card statements are the ghosts of contracts that you once signed up to.
Very expensive ghosts. These are the forgotten, unwanted or unrequested regular subscriptions for services that we neither want nor need, but haven’t realised we are still paying for them.
In the last few years, we’ve heard a lot about how the Government is going to clamp down on ‘subscription traps’ – contracts for goods or services that are either misleading or downright cons. Many of us sign up to these subscriptions by way of a free trial, only to be hit with massive charges for poor quality or non-existent services. The rather clunkily named Digital Markets, Compositions and Consumers Bill is currently wending its way through the process of becoming law and should clamp down on this practice.
But millions of people are paying billions more for legitimate subscriptions. As the cost-of-living crisis bites, one of the most effective ways to scrape back some cash is to cancel these services. I put my money where my mouth is and saved over £1,000. Here’s my guide.
How businesses debit your accounts
You might think that tracking down unwanted subscriptions is a simple matter of going on to your online banking apps and checking your direct debits and standing orders. You should be able to get a list of these payments easily through online banking (or in a branch, if you can find one that’s open). But that won’t show you the half of it.
Most businesses debit for subscription services using a ‘continuous payment authority’ or CPA. These don’t show up on your regular payment lists but work in more or less the same way to debit you on a regular basis monthly or annually. CPAs work on a ‘trust’ basis. Businesses can tell the bank, credit card or payment service that you use that you’ve given permission for your account to be debited. If challenged, the business has to prove it. If they can’t, you should get your cash back.
The good news is you can cancel a CPA straight away, on the phone or online. The bad news is this method of payment is widely abused by businesses and facilitates the majority of dodgy debiting of accounts by businesses.
What accounts do you need to check?
You might think that you only need to check your bank accounts and credit cards for subscriptions. But you’d be surprised. You can be debited through:
- Bank accounts
- Credit cards
- E-payment services (like PayPal)
- Your mobile phone bill
- Other online payment services (like Apple Pay or Google Pay)
Your phone bill can be used to ‘add on’ all kinds of payments, not just phone or broadband-related services or goods. So try to remember your password and log on to see if you’re paying for something you didn’t realise you had authorised.
What do I have to check on my accounts?
To my immense annoyance, I’ve yet to find a bank, card or service provider that can provide a simple list of every subscription that you have that’s active on your account. Many banks have a ‘subscriptions’ option, but having crowdsourced friends and colleagues to check their own accounts, I’ve not found one yet that actually did this. I’m happy to be corrected by any financial businesses btw…
There are some free apps out there that will help you track down lots of subscriptions, but because of the rather crafty way some payments are listed (obscure terms, irregular billing dates, etc.) there isn’t a definitive option.
So that means you have to go back through your accounts for one year and one month in order to track down every rouge subscription.
Why one year and one month? Well in the last few years, many businesses have changed the way they bill us from monthly debits to annual ones. This works on the basis that while we might spot a big debit from our accounts, if we don’t, we might not notice for a whole year that the money has been taken. Adding that 13thmonth to check means you hoover up any of these annual debits that might have been taken slightly earlier last year.
Now when I started going through my own accounts, I rapidly lost the will to live. So set yourself some attainable targets. Pop the tele or radio on in the background so you’re not sitting in silence and go back through your accounts in three-month chunks. It’s much quicker to do this than you might think.
If you spot anything that looks a bit weird, note down the date and name of the debit. If you don’t recognise it, search your emails for similar payments to see if it’s something you recognise. If you dispute that you’ve ever agreed to the payment, tell the business that’s been debited that you want to file a claim for an ‘unauthorised transaction’. If it really is unauthorised, you could potentially claim back some or even all of the cash!
Here are some of the key things to look for.
Cloud storage, streaming and anti-virus software
We worry about losing things like photographs or documents that are saved to various bits of tech. So many of us opt to store data in ‘the cloud’ – even though we might not understand how this works in practice. Because it’s possible to sign up to cloud storage when you buy laptops, phones, tablets, anti-virus software, or anything linked to the internet, chances are you’re paying for more than one service – which you don’t need.
The same goes for music streaming. Did you get nudged in to paying for YouTube or Spotify ad-free? Was Apple Music the easiest way to hold on to your music collection? Pick one streaming service and settle for adverts.
As for anti-virus software, it’s vital, but do you know some firms charge you three times more when your deal auto-renews?
Savings and claims
Cloud storage prices can range from £1.99 to £9.99 a month and more. Save up to £150+ a year.
Music streaming services all start at around £9.99 – cancel two and save £240 a year.
Anti-virus software ranges from £25 to £90. You could claim back £100+
Mobile phone and gadget insurance
Whenever you buy a new phone or upgrade, chances are the business will try to sell you a new mobile phone insurance policy. If you assumed that the old policy would be cancelled, you may be in for a nasty surprise when you check your accounts. Though it should be obvious to businesses that you don’t need your old policy any more, they often don’t remind you to cancel.
I recently helped a reader claim back over £700 for three forgotten policies she hadn’t realised she was paying for. Look for gadget insurance and other small value policies you just don’t need or want.
Even better, a multiple gadget insurance policy can cover five or more items for £20 to £30 a month, so if you combine your phone, laptop, tablet and gaming machines in to one policy you could save hundreds.
Savings and claims
Mobile phone and gadget insurance can range from £8 to £20 a month, saving you £100+ for each cancelled policy each year. Combining 5 policies in to one could save you £500.
Love costs, especially if you’ve signed up for a free trial of ‘premium’ dating services and forgotten about them. Record numbers of complaints about dating websites and premium services were made after the pandemic when people realised, they were being charged and the sums involved can be an ardour killer.
After the pandemic killed the chances of actually going on dates in reality, you may not have checked the websites you’d previously signed up to. Dust off those apps to see if you are paying for potential partners you don’t need anymore.
Savings and claims
Prices range from £7.99 to £50+ a month. If you forgot you’re paying for two, then cancelling could save you £200+
From magazines to gym memberships, we waste thousands of pounds each year on subscriptions we don’t want or need. So be honest with yourself. What can you ditch? A gym membership alone can save you £300 or more a year depending on where you go.
Subscriptions are crafty because they’re often low value, so you might not think too much of a £7.99 debit, but that works out to just under £100 a year. It’s important to support the arts and industries that are struggling but make sure you’re only paying for things you use or want to support.
Savings and claims
Just by cancelling a few subscriptions that you aren’t using anymore, you could save anything from less than one hundred pounds to over £1,000 a year.
Subscription traps and fraud
As I mentioned at the start of this column, subscription traps are regular payments that appear after you sign up to a free trial only to be debited large amounts for poor value deals or for non-existent products. The firms are often based abroad and difficult to contact. But if you tell your bank to cancel and claim back your cash chances are you’ll get rid of the problem. It’s for the firm to prove they can debit you for each transaction. If they can’t, you can ask for the money back.
Because we pay for lots of stuff using contactless, it’s hard to keep on top of all the transactions. Mistakes do happen – as does fraud. It’s not hard for someone to put in the wrong figure into the machine you pop your pin in to or tap your card on.
Fraudsters will also use information floating around on the internet to crack your shopping, banking or social media accounts – and once they’re in they can spend or syphon off cash too. Report anything suspicious. As a general rule, these genuinely unauthorised transactions should be refunded by your bank or card provider.
Featured in Times Money Mentor – Martyn James