A free trial subscription, a quick click, and suddenly bills start piling up. Consumer traps are rife in everyday life and often hard to spot. This article explains typical patterns and offers guidance on what to look out for before signing up.
Key Takeaways
- Consumer traps often use automated processes, time pressure or confusing design to persuade consumers into unwanted contracts.
- Free trial periods can turn into paid subscriptions if they are not cancelled in time. Unwanted costs can also arise via mobile phone bills.
- Automatic contract renewals and cancellation periods are everyday mechanisms that can easily be overlooked. In recent years, the legislator has introduced regulations to protect consumers.
- So-called ‘dark patterns’ are design tricks on websites and in apps that are specifically designed to make certain decisions easier or more difficult.
- Before signing up, it can be helpful to check the price, contract term, cancellation procedure and the wording on the order button.
- If you encounter problems, consumer advice centres can be a helpful point of contact.
What are consumer traps?
The term ‘consumer trap’ describes situations in which consumers are persuaded to make a payment or enter into a contract that they did not intend to do so. This can happen through unclear wording, hidden costs or processes that are deliberately designed to make critical scrutiny difficult.
Why the issue is so widespread
Consumer traps are not a marginal phenomenon. People encounter them in everyday situations, such as when shopping online, signing a mobile phone contract, signing up for a streaming service or ordering a magazine subscription. People of all age groups are affected. What makes them particularly insidious is that many of these mechanisms appear entirely legitimate at first glance and are only recognised as problematic in hindsight.
What distinguishes consumer traps from deliberate fraud
Not every consumer trap is synonymous with fraud. In many cases, providers operate in legal grey areas. The terms and conditions are formally present, but designed in such a way that they are easily overlooked. The costs are mentioned somewhere on the page, but not where the eye first falls. It is precisely this grey area that makes consumer traps so effective and, at the same time, so difficult to pin down.
Subscription traps and trial periods
One of the most common mechanisms in the realm of consumer traps involves subscriptions, particularly those that begin with a free or discounted trial period.
How subscription traps typically work
The pattern is often similar. A provider advertises a product or service with a free trial period. Signing up is quick; often, just a few clicks are enough. What can easily be overlooked is the note that the subscription automatically converts to a paid subscription once the trial period ends, unless it is actively cancelled beforehand.
This information is usually provided, but it is often found in the small print, in the terms and conditions, or in a place that is easily overlooked when clicking through quickly.
Subscription traps via mobile phone bills
A particular type of subscription trap concerns mobile phones. Through certain payment methods, such as billing via the mobile phone bill, third-party providers can incur charges, sometimes simply by clicking on adverts or entering competitions. The exact procedures depend on the provider and the method in question. This can result in weekly or monthly debits appearing on the mobile phone bill, often without the user being aware that they had signed up for the service.
Many mobile phone providers offer the option to block such third-party billing. This is known as a ‘third-party block’. Whether and how this is possible in individual cases depends on the provider in question.
Why trial periods are so effective
From a psychological perspective, trial periods exploit a well-known effect. People who are already using something and have become accustomed to it tend to perceive cancelling the service as a loss rather than the original subscription as a gain. This so-called endowment effect - the tendency to attach greater value to things one already owns or uses - makes it harder for many people to cancel a subscription, even if they originally only intended to try it out. Such psychological mechanisms also play an important role in other consumer decisions.
Added to this is the fact that the cancellation deadline is often forgotten. Days or weeks pass between signing up and the end of the trial period, and without an active reminder, the deadline slips from view.
Automatic renewals and cancellation deadlines
What automatic renewals mean
Many everyday contracts contain clauses whereby the term is automatically extended if the contract is not cancelled in time. This applies to mobile phone contracts as well as insurance policies, gym memberships or magazine subscriptions. The extension takes place without any active intervention on the part of the customer, i.e. without the need for renewed consent.
For consumers, this means that a contract originally concluded for a specific period may continue beyond that period if the cancellation is missed.
The concept of the notice period
The notice period is the timeframe within which a notice of termination must be received in order for the contract to end at the earliest possible date. It is usually specified in weeks or months and typically begins from the end of the current contract term.
For example: if a contract ends on 31 December and the notice period is three months, the notice of termination must be received by 30 September at the latest. If this deadline is missed, the contract is in many cases automatically extended for a further specified period.
Legal regulations as a guide
In recent years, the legislator has introduced several regulations designed to make it easier for consumers to deal with contracts and cancellations.
For instance, the so-called Fair Consumer Contracts Act introduced various provisions concerning, amongst other things, the terms of certain types of contract and the conditions for automatic renewals. The aim of these provisions is to limit tacit contract renewals and to make terminations easier. However, the exact requirements vary depending on the type of contract and do not apply equally to all contractual relationships.
In addition, for certain online contracts, a requirement has been introduced to provide an easily identifiable cancellation button on websites. This is intended to ensure that, in the relevant cases, it is generally possible to terminate a contract online just as easily as it was concluded. Here too, the specific applicability depends on the particular contractual relationship.
The exact regulations may vary depending on the type of contract, the time of conclusion and the individual situation. If you are unsure, it may be advisable to contact a consumer advice centre.
Dark patterns: When design influences
What are dark patterns?
The term ‘dark patterns’ describes design patterns on websites, in apps or in ordering processes that aim to steer users’ behaviour in a specific direction. This is not about technical tricks, but rather the deliberate design of interfaces, text and processes that make certain decisions more likely and others more difficult.
Typical examples of dark patterns
There are a number of patterns that are particularly common in everyday life.
One of these is known as visual interference and relates to the design of buttons. The option preferred by the provider, such as ‘Yes, I would like to take out the subscription’, is highlighted in colour, displayed in large text and immediately visible. The alternative, such as “No, I do not wish to subscribe”, is, by contrast, small, in a pale colour and placed inconspicuously at the edge or even hidden within the body text. Freedom of choice is formally granted, but the design directs the eye and thus influences the likelihood of a particular choice.
Another pattern is so-called ‘confirmshaming’. Here, the button for rejecting an offer is worded in such a way as to trigger an uneasy feeling. Instead of a neutral ‘No, thank you’, one might find text such as ‘No thanks, I’d rather miss out on all the benefits’. The wording aims to make the rejection appear like an unwise decision.
Fake scarcity is also one of the common tactics. Messages such as “Only available today”, “Offer ends in 3 hours” or “Only 2 left” create a sense of urgency that can lead to quicker and less considered decisions. Consumers are generally unable to verify whether the scarcity is genuine.
A tactic known as “Sneak into Basket” or “Hidden Costs” relates to the shopping basket. During the ordering process, additional products, extended warranties or insurance are automatically added to the basket without the customer having actively selected them. Anyone who does not carefully check every item and manually remove unwanted items ends up paying more than planned.
Finally, there is the pattern of difficult cancellation. Whilst concluding a contract or subscription is often possible with just a few clicks, cancelling it can in some cases be significantly more complicated. The cancellation process is hard to find, requires several intermediate steps, or leads to offers designed to persuade the user to withdraw their cancellation.
Why dark patterns are so effective
The effectiveness of dark patterns stems from the fact that people do not make every decision in their daily lives with full attention. Many online processes are clicked through routinely, text is skimmed, and there is a widespread trust that the default options are in one’s own best interests. Dark patterns exploit precisely these everyday routines.
What to look out for before finalising a transaction
There is no absolute protection against consumer traps. However, there are a few things you can do to help reduce the risk of unwanted costs or obligations. The following points are intended as a guide, not as a comprehensive checklist.
Price and actual costs
What does the offer cost after a trial period or introductory phase has ended? Some offers start with a reduced price that rises significantly after a while. It can be helpful to know not only the introductory price but also the standard price before signing up.
Term and renewal
For how long is the contract valid? What happens if it is not cancelled? Does the contract renew automatically, and if so, for how long? This information is often found in the terms and conditions. A quick look at the relevant sections can help avoid surprises.
The wording on the order button
A helpful guide when concluding a transaction online is the wording of the order button. The law stipulates that a contract involving a payment obligation on the internet is only validly concluded if the final order button clearly indicates the payment obligation, for example through wording such as ‘order with payment obligation’ or ‘buy’. General terms such as ‘Continue’ or ‘Log in’ are not considered sufficient to establish a payment obligation. Paying attention to such wording can provide an additional indication of whether an offer is transparent.
Method and notice period for cancellation
How and by when can the contract be terminated? Is termination possible by email or via an online form, or is it necessary to do so by post? How long is the notice period? Anyone who is aware of these points before concluding the contract will be better prepared should termination become an issue at some point.
Check default settings and shopping basket
When placing online orders or registering, it can be wise to carefully check all pre-selected options and the contents of the shopping basket before completing the transaction. Not every pre-ticked box and not every item in the shopping basket corresponds to what you actually want.
Question time pressure
If an offer is accompanied by a noticeable sense of urgency, it can help to take a moment before making a decision. A legitimate offer does not usually lose its validity within a few minutes.
What to do if you encounter problems?
If an unwanted contract has been concluded
It can happen that, despite taking every precaution, a contract is concluded that was not intended. In such situations, there are various options, which may differ depending on the individual case. For contracts concluded online or by telephone, there is often a right of withdrawal, which allows you to cancel the contract within a specified period. Whether a right of withdrawal applies, and under what conditions, depends on the type of contract and the circumstances of its conclusion.
The Consumer Advice Centre as a point of contact
Consumer advice centres are an important point of contact for problems with consumer traps. They offer advice on consumer rights, assist with reviewing contracts and, in certain cases, can also provide legal assistance. Consumer advice centres are present in all federal states and offer their services both in person and by telephone and online.
In addition, consumer advice centres regularly publish warnings about current consumer traps and fraudulent offers. Taking an occasional look at this information can help you spot new patterns at an early stage.
Further possible steps
Depending on the situation, it may also be advisable to seek legal advice, particularly when dealing with larger sums of money or more complex contractual issues. In many cases, debt advice services or social advice centres also offer support if financial difficulties have arisen due to unwanted contracts.
Note
This article is for general information purposes only and does not replace individual legal, tax or financial advice. Despite careful research, no guarantee can be given as to the up-to-date nature, completeness or accuracy of the information. For decisions in individual cases or regarding specific questions, it is advisable to seek advice from qualified bodies, such as a solicitor, a tax adviser or a consumer advice centre.