Monthly subscription bills might be slipping through your budget. Here's how to keep them in check

When Mississauga, Ont.-based money coach Vanessa Bowen sat down with a client last year to go through the woman's finances, the pair realized something was askew: a monthly Spotify charge had seemingly appeared out of thin air. 

Did she know that she was paying for the music streaming app? No, because she doesn't use it. Had the company somehow charged her mistakenly? Probably not, Bowen told her. Then, the woman remembered.

"She's like, 'Oh my gosh, I've been paying for my ex-boyfriend's Spotify!'" Bowen recounted. "She was spending all this money on someone who was not even in her life anymore."

Canadians are signing up for subscriptions left and right, and companies are all too happy to oblige. It's quick and easy for the buyer, and a steady flow of cash for businesses that can automatically renew the subscriptions on a regular basis. But some people forget that they've signed up at all — and then the bills start piling up.

"Maybe we use it for a couple of weeks, but then we forget about it," Bowen said. "Life gets in the way ... but that charge is still hitting our credit card, still impacting our finances."

CBC News spoke with experts who shared how to stay on top of those subscription fees — and what to do when you just can't find the unsubscribe button.

'A fundamental shift in the way companies do business'

Anyone with a newspaper subscription can tell you that the model has been around for a long time. 

But a 2010 wave of direct-to-consumer e-commerce brands — like Dollar Shave Club, which delivers grooming products by mail — is what started the modern subscription boom, according to Adam Levinter, the Toronto-based founder and CEO of Scriberbase and author of The Subscription Boom.

Now, it's a ubiquitous fact of life. Sure, you've probably got Netflix or Disney Plus, but you can also get a monthly mystery box filled with cosmetics, or quirky flavours of tea and coffee, or meal-kits with pre-measured ingredients — down to the teaspoon.

"The last 10 years has seen just a massive shift in more and more companies moving in this direction, not just e-commerce companies, but platform companies, software companies, services companies," Levinter said.

The UBS financial services firm predicts the global subscription market will grow to $1.5 trillion US by 2025, more than double the $650 billion US it was estimated to be worth in 2021.

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One in three Canadians have cancelled their subscriptions to streaming services in the last six months, according to a survey by the Angus Reid Institute.

"This is a big fundamental shift in the way companies do business. And at the same time, it's a fundamental shift in how consumers interact with companies."

Businesses are more interested than ever in building long-term relationships with the consumers who buy their products. While it used to be up to companies to bring customers back for repeat transactions, the emphasis on subscriptions has changed that.

"In a subscription business, the onus now shifts to the customer, so the company assumes the customer is otherwise satisfied with the product or service and will continue to bill that customer in perpetuity unless the customer decides to cancel," Levinter said.

Bowen, who runs a financial coaching firm called Mintworthy Co., said the problem is that people rarely want to part ways with their subscriptions. More than 85 per cent of Canadians have at least one monthly subscription, an Angus Reid survey from October found.

But the same survey showed that one in three Canadians had cancelled a subscription in the prior six months, with half of them citing the ongoing cost of living crisis. Those who hung onto their subs might just have a tough time saying so long, Bowen said.

"Once you have a subscription in your life, even if you're not using it consistently, your mindset comes to this point of, 'Well, maybe I will need it next month or next week,'" said Bowen. 

"Once you have it, it's very hard to say goodbye." 

A longer goodbye

Saying goodbye can be especially tough when the company wants to make it so: the dreaded "subscription trap." A Vancouver woman told CBC's The Cost of Living last year that she was forced to cancel her credit card after a company made it exceedingly difficult to get out of a subscription. 

"It would help if there was greater standardization of subscription contracts and time intervals," said Kenneth Whitehurst, the executive director of the non-profit Consumers Council of Canada, in an email to CBC News.

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Whether subscriptions can be cancelled easily is a matter of opinion, usually related to whether a website is user-friendly, he added. The council doesn't get many complaints about online subscriptions, but "I think the worry for people is that they authorize term agreements with recurring payments, unwittingly."

"There need to be clearer rules around cancellation, in general, for small-value, recurring subscriptions."

A Canadian company pleaded guilty last year for trapping buyers into a monthly subscription for health and dietary supplements, and was fined $15 million following an investigation by the Competition Bureau. But the bureau isn't a regulatory equivalent to the stricter Federal Trade Commission in the U.S., as Canada's consumer market is much smaller, said Levinter.

Horror stories led the U.S. federal regulator to ramp up its enforcement measures in 2021, after several high-profile companies — from SiriusXM radio to Apple — faced lawsuits from customers who said the businesses had made subscriptions too difficult to cancel or had engaged in suspect auto-renewal practices.

That's why it's crucial that companies make it easy for customers to reach them with questions and concerns — and give them the ability to control their subscription packages, added Levinter.

"If you make it difficult for the customer to do that, you're going to end up in lots of trouble," he said. 

'A black eye on the merchant'

Cutting up your credit card is a desperate measure. But most Canadians will have a more simple route to navigating unwanted subscription charges: they can ask their credit card company for a chargeback, in which a bank transfers money from the merchant's account back to the client.

"Chargebacks are a black eye on the merchant," said Levinter. 

Businesses that accept Visa or Mastercard, for example, have a responsibility to keep their chargebacks below a certain threshold. If chargebacks spike up, that's bad news for the company.

"You can have your card processing shut off, meaning that as a company you won't be able to process Visa or MasterCard transactions anymore, and without the ability to process transactions, you have no business."

The process is a little bit murkier if you've made a purchase using a debit card, because a company can't protect you if you've shared your pin or somehow encouraged its unauthorized use.

Maybe you just want to cut back for the sake of your wallet. If so, tracking monthly expenses — poring over your credit card statements for an errant Spotify charge here or there — is the best way to catch money slipping through the cracks, Bowen said.

A whole host of subscription management apps have also emerged in recent years, from MySubscribe to Mint to Bobby.

But automatically renewable subscriptions are a two-way street.

"I think companies should have [the] responsibility of reminding consumers, 'Hey, your subscription is coming up, do you want to cancel?' and have an easy way to click that cancel button so that we can say 'thank you, goodbye,'" said Bowen. "It's been nice, but I'm gonna put my money to something else right now."