14 April 2023 , 21:30
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Firms will be banned from duping customers into signing up for subscriptions that automatically renew under plans announced by Labour today.
The party will legislate so companies have to give customers the choice of whether they want payments to renew or not.
At present, subscriptions automatically renew and consumers only need to be informed about their continued subscription, not given a genuine choice to cancel or continue paying.
This means many end up trapped into contracts for various services that they no longer want or use.
Citizen’s Advice estimates that a staggering £306 million per year is spent in the UK on unwanted subscriptions that customers are unable to get out of.
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Shadow business secretary Jonathan Reynolds said 'it is vital we protect customers' (Martyn Wheatley / i-Images)Under Labour’s new plan, companies will be forced to offer customers default manual renewal where they must agree each time to continue to pay. They can then later agree to automatic renewal if they wish to.
Shadow business secretary Jonathan Reynolds said: “In a cost of living crisis it is vital we protect customers and make sure they are getting the best value for money possible.
“Labour will take action to stop companies trapping customers in contracts they no longer want and put power back in customers hands.
“All good businesses know the way to get customer loyalty is through good service and value for money, not through customers paying for products they don’t want.
“A Labour government would take action on the cost of living crisis, freezing council tax this year, lowering energy bills for good and standing up for consumers.”
The new proposal comes as Labour unveil their plans to help families tackle the cost of living crisis.