Westpac NZ says more than $75,000 worth of "subscription trap" payments are now being blocked a day on average as it encourages Kiwis to watch out for the deceiving e-commerce sales practice.
A subscription trap is an online sales practice in which online websites sell goods that may be legitimate, but tricks consumers into an ongoing, recurring payment plan without clear consent, or makes it hard to cancel the payments once you're in.
Westpac NZ head of customer care operations Peter Barnes said the bank's payment block has been in place since April 2024, and has helped save customers more than $40m in likely unwanted transactions.
"Ongoing improvements had doubled the value of transactions prevented, with more than $75,000 worth of payments now being blocked a day on average," he said.
"These types of businesses aren’t necessarily acting fraudulently, because they do disclose the subscription details in their fine print, but typically they don’t offer this information up front. So, in our view their money-making model is unethical," Barnes said.
He said often people only realise they’ve signed up to a subscription when they see the further charges on their card, and when they contact the merchant to dispute it, it can be a difficult and time-consuming process.
"In the past two years we’ve seen more and more digital subscription services and e-commerce sites misleading shoppers by portraying themselves as being New Zealand-based. This makes them seem more trustworthy – when they don’t actually have any presence here," said Barnes.
The bank is urging online shoppers to do due diligence before they hit "purchase".
Top tips for spotting 'subscription traps' and keeping safe
Barnes said while Westpac was continuously working to keep customers safe, people were encouraged to be careful when buying things online and to always read the fine print.
"Everyone should also keep a close eye on their transaction history, and if you think you may be caught up in a fraud or scam, call the bank immediately. The sooner we know, the better our chances of recovering your money," Barnes added.
“And to be doubly safe, make sure you’ve read the terms and conditions of any subscription service offer before proceeding."
In addition, keep an eye out for:
- Too-good-to-be-true pricing advertised on social media.
- The goods or services are priced substantially cheaper than other websites.
- Offers of a member-only or VIP discounted price.
- Pre-populated checkboxes that automatically subscribe you.
The morning's headlines in 90 seconds, including why power prices are unlikely to fall, and a bizarre twist in an Australian homicide investigation. (Source: 1News)
SHARE ME