Subscription Trap Scams: How to Spot and Escape Hidden Charges

Subscription traps, sometimes called negative option marketing, have become one of the most common sources of unexpected charges on consumer bank and credit card statements. The FTC receives hundreds of thousands of complaints about recurring charges annually.

How Subscription Traps Work

The free trial setup. You sign up for a free or heavily discounted trial, often for a skincare product, streaming service, weight loss supplement, or software. The offer requires entering a payment card "for shipping" or "to verify your identity." Fine print buried in the terms discloses a subscription that begins when the trial ends.

The pre-checked box. During an online purchase, a checkbox for a subscription or add-on service is pre-checked by default. If you do not notice and uncheck it, you are enrolled.

The hard-to-cancel design. Cancellation requires calling a phone number during limited hours, navigating multiple confirmation screens designed to retain subscribers, or waiting on hold indefinitely. Some companies require written cancellation by mail.

Continuous service plans. You sign up for a one-time purchase that turns out to be a subscription. The initial terms are clear but the recurring nature is understated.

The FTC Click-to-Cancel Rule

In 2024, the FTC finalised the Click-to-Cancel rule, which requires companies to make the cancellation process at least as easy as the signup process. Specifically:

• If you can sign up online, you must be able to cancel online
• Companies cannot require cancellation by mail if signup was digital
• Companies must clearly disclose all subscription terms before charging
• Companies must honour cancellation requests promptly

Violations of this rule can be reported to the FTC and may result in enforcement action.

How to Protect Yourself Before Signing Up

• Read terms before entering payment information for any "free" offer
• Look for pre-checked boxes on checkout pages
• Use a virtual card number (many banks and credit cards offer this) for trial subscriptions, this limits exposure if the subscription becomes difficult to cancel
• Search the company name plus "cancel" or "subscription scam" before signing up
• Set a calendar reminder for before the trial ends

How to Cancel a Subscription Trap

Step 1: Attempt to cancel through the company's website or app. Under the Click-to-Cancel rule, there must be an online cancellation option if you signed up online.

Step 2: If the website method does not work, call the company and specifically request cancellation. Get a confirmation number.

Step 3: If the company refuses or makes cancellation impossible, dispute the charges with your credit card company. Explain that you attempted to cancel and were unable to. Under the Fair Credit Billing Act, recurring charges you did not authorise or cannot cancel are disputable.

Step 4: Contact your bank to block future charges from that merchant if the dispute does not resolve the issue.

Where to Report