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It’s a common experience, you sign up for a service, and one day you notice a payment has gone through your account, even though you hadn’t wanted to renew.
You were sure you hadn’t ticked that button, so you chalk it up to bad memory and try to get a refund, but this is often easier said than done.
The Commerce Commission, has seen an increase in concerns regarding ‘subscription traps’, including the way consumers are being signed up to ongoing service contracts, and difficulties in cancelling subscriptions.
Earlier this month, the Commission filed criminal charges against HelloFresh, for what they allege was misleading conduct used to “re-activate” customers who had cancelled their food delivery service.
Commerce Commission competition, fair trading and credit general manager, Vanessa Horne says HelloFresh isn’t the first business to face these sorts of allegations as the commission also recently issued Dick Smith with a warning for likely misleading customers by automatically signing customers up for a $149 membership subscription.
“This sort of practice is something we’re seeing more frequently which is why we’ve identified illegal online sales conduct, including subscription traps, as one of our enforcement priorities.
“Fair trading laws apply to all businesses who advertise or sell to New Zealand consumers, even if the business is based outside New Zealand. Under the Act, businesses should make sure that the subscription terms are clear to consumers when they sign up and all important information is disclosed clearly upfront, to avoid the risk of misleading consumers.”
This means, consumers have a right to be informed before subscriptions are renewed.
“Customers should know their obligations such as how long their contract is due to run and how to cancel it. We do see excellent practices from some businesses who contact consumers well ahead of renewals and make it very easy for their customers to cancel or renew.”
The commission encourage anyone who believes a business has breached the Fair Trading Act or one of the other laws they enforce, to report it, using the ‘report a concern’ form on their website.
