How to avoid and stop 'grey charges'

By Michael Lloyd

Failing to keep tabs on subscription services you sign up for could end up costing you hundreds of pounds a year.

Many companies that charge a monthly subscription fee for their services - such as TV streaming websites, gyms or credit reference agencies - lure people in by offering a free trial period. The hope is new customer will either decide to stay or forget to cancel the trial, allowing the firm to start charging the customer's credit card for a full membership and resulting in "grey charges" for you.forgotten-subscription-charges

According to research conducted by TopCashback.co.uk, UK consumers were spending £410 million a month on forgotten subscriptions as of March 2016, up from £338 million a year earlier.

"Companies profiting from ‘grey charges' rely on you not checking your bank statements thoroughly every month," Dominic Baliszewski, director of consumer strategy at finance service website Momentum, said in response to emailed questions. "While each individual charge may be small, these can add up."

However, these charges are easy to avoid, and in some cases, you can get your money back. Here's how:

Apply for free trial offers with care
Everybody likes to get stuff for free - even stuff you don't necessarily need. That's why free trial offers are such a popular marketing method among companies that run subscription services. The offer won't seem so great, however, if you fail to cancel your trial and find out months later that you've been charged for something you forgot you signed up for in the first place.

The simplest solution is to resist the urge to partake of free trials you have no use for, but if the temptation becomes too great, make a note to cancel well within the introductory offer period. Read the terms and conditions of the offer: you might even be able to cancel the service immediately after signing up for it and still benefit from the free trial.

"As you sign up for these services, ask yourself how long you'll need it," Kimmie Greene, consumer finance expert for money management app Mint, said in an emailed response to questions. "Is the trial period enough, or will you want to access the service or content on a longer term basis?"

If you want to take advantage of a free trial, but don't want the service after that, Greene recommends setting a reminder on your calendar or smartphone a few days before the trial period ends, giving you time to call and cancel. If it's a subscription you want to keep longer, she said, set a reminder about every six months to consider whether you still are using the service.

Take proactive steps
The terms and conditions will tell you if you'll be locked into a contract after the trial period expires.

"Make sure you read the fine print of everything you sign up for, even if it claims to be a free trial," Baliszewski said.

You also can be proactive by knowing what's going on with your credit card at all times.

"Avoid grey charges by putting some time aside each month to go through your statements carefully," Baliszewski said. "Checking your bank statements regularly ... can help you spot grey charges and empower you to stop them."

Disputing forgotten subscription fees
If you find that you're locked into a contract that you feel you were not made aware of, you may be able to take action.

It's always worth asking for your money back if you find you've been paying for a subscription service you forgot you signed up for, even if you've been doing so for many months. Contact the company, cancel your subscription and ask for your payments to be returned.

If you haven't used the service, the firm may refund your money as a gesture of goodwill, despite it being your responsibility to cancel within the trial period.

Always contact your bank or online payment service to cancel any direct debits or recurring payment instructions once you've closed a subscription to make sure the company can't take any more money from you. 

If you feel you've been misled by a company, you may need to lodge a formal complaint with the company.

For instance, online retail giant Amazon agreed to refund thousands of customers in 2015 after the Advertising Standards Authority ruled an Amazon mailshot failed to make it clear that customers would be charged after a 30-day free trial of its Prime delivery service. Customers who had not used the service after their trial expired received refunds for the £79 fee.

Sometimes restitution and refunds require more work and diligence.

If a company refuses to either cancel your subscription or return money that you feel you've already paid, you still have access to possible redress.

"In the event of a dispute regarding a free trial, we would look to ensure that the consumer was made aware of the terms of the agreement they were entering into," Mike Waldron, of the UK's Ombudsman Services, said in an emailed response to questions.

If the Ombudsman finds that the appropriate information was not clear to the consumer, or that the company did not give sufficient prominence to a condition that would impact that, and it leads to the consumer incurring charges, the Ombudsman would consider ordering a refund, Waldron said.

See related: 'Buy now, pay later' offers can leave you with debt headache, Skip the fine print, skip vital information

Published: 21 November 2016