Martin Lewis is warning households to stay on top of their subscriptions so they aren't hit with unexpected price hikes. He also told fans how important new consumer laws are on the way.
The advice comes after a listener to his BBC podcast shared their unhappy story of being hit with a price increase they were not expecting. They signed up for a DNA family tracing website a year ago for a deal price of £80. But when it automatically renewed, the company charged them £229 - almost three times as much.
Set a calendar reminder
Reacting to this cautionary tale, Mr Lewis urged everyone to keep track of their renewal dates. He said: "This is why I always tell people on subscriptions you need to diarise a strong date, three or four weeks before your subscription is due to renew, so you can make an active decision yourself as to whether it should renew or not."
He noted that people are drawn in by these cheap introductory deals "all the time", only to be caught out by sudden price increases later. When the customer complained, the company offered them a partial refund of £46.
The company said they had sent an email explaining their auto-renewal policy right after the initial purchase. The listener asked Mr Lewis if companies are legally required to send a reminder before renewing, and if customers have a right to cancel for a full refund.
How to fight back
Mr Lewis explained that while he thinks companies should send reminders from a moral standpoint, they do not currently have to by law - although this is changing soon. He also explained that while you usually get a 14-day cooling off period to cancel and get a full refund when you first buy a service, that right does not normally apply to automatic renewals.
He suggested the listener contact Citizens Advice to talk through the specifics of their contract, though he admitted it's "not looking very hopeful."
However, Mr Lewis did have some ideas for how the customer could do battle with the company to try and claw back their cash. He said the customer could try complaining directly to the company, arguing that the huge price jump without a reminder is "really unacceptable."
He shared a key piece of advice for negotiating: "When you write that, my big suggestion would be tell them what you want. What would be an acceptable amount?
"I mean, you could even go back and say, 'I'm willing to pay the same price as I did last year. I don't want this subscription anymore. I'd happily cancel it, but I'm willing to give another year at £80.' This is assuming Citizens Advice have told you you haven't got any rights after looking at the specific contract."
New rules coming in 2027
Mr Lewis pointed out that while the law doesn't protect consumers right now, stronger protections are coming. He explained: "Currently, there is no legal requirement to send consumers a reminder before an auto-renewal or before a free trial converts into a paid subscription. It isn't there.
"Traders will be required to send written reminder notices to consumers before the first payment after a free or discounted trial ends, at least every six months during a subscription, and on two occasions before a renewal payment that is not due for 12 months or more. So if this was in a year's time, the answer would strongly be, 'Yes, they need to remind you.' And this is why right now people still need to be very careful."
Starting in January 2027, new laws will mean:
- Companies must send reminders before free trials or discounted rates roll over into a full price, and before yearly renewals
- Consumers will get a 14-day cooling-off period to cancel and get a refund after a free/discounted trial ends or when a yearly contract renews
- Cancelling must be quick and easy. If you signed up online, you must be able to cancel online just as easily
