Study: More Than 1 in 3 Americans Have Been Enrolled in an Auto-Pay Program without Knowing

Paying your bills has gotten easier over the years thanks to online banking and payment services, but buyers should beware. More than 1 in 3 Americans (35%) say they have signed up for a subscription or membership, such as a gym, that enrolled them in an automatic payment plan without even realizing it, according to a new study by CreditCards.com.  When respondents found themselves in this situation, only 11% kept the auto-pay turned on, while 89% chose to turn it off. Only about half of those surveyed found it easy to cancel an automatic payment (47%). 

Have you fallen victim to recurring payments without knowing?

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48% have forgotten to cancel a free trial before being charged by an auto-renewal

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People often sign up for auto-pay programs for services as a convenience or to ensure that they don't miss a payment.  However, many times the payment plan is not obviously stated and consumers continue with a service they did not plan to extend.  Gen Xers, ages 37-52, are more likely than any other age group to have fallen victim to unwanted auto-pay programs and more than 2.5 times that of people ages 72+ (17%). 

​​Parents are more likely than non-parents (43% vs. 32%) to be unwittingly enrolled in such a program.  And, people with higher education and income levels are more likely to have been enrolled in an unwanted auto payment plan compared to respondents who make less than $30,000 per year and have an education level of high school or less.

"Bottom line, it's important to read the fine print when you're signing up for a new subscription or service," said Matt Schulz, CreditCards.com's senior industry analyst. "Unplanned recurring payments can wreak havoc on your budget and your bank accounts."

Oftentimes, these accounts start as a free trial that is automatically renewed and suddenly the consumer is hit with an unexpected payment.  48% of respondents say they were unknowingly charged for a subscription when the trial period ended and the auto-renewal was activated.  Gen Xers (56%) and Younger Boomers (57%), ages 53-62, were most likely to have had this happen to them. 88% of consumers opted to cancel the subscription when this occurred.  However, just over half of those respondents (51%) received a refund.

​The survey was conducted by Princeton Survey Research Associates International. PSRAI obtained telephone interviews with a nationally representative sample of 1,002 adults living in the continental United States. Interviews were conducted by landline (501) and cell phone (501, including 303 without a landline phone) in English and Spanish by Princeton Data Source from August 3-6, 2017. Statistical results are weighted to correct known demographic discrepancies. The margin of sampling error for the complete set of weighted data is plus or minus 4.0 percentage points.

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