Westpac NZ has helped save customers more than $40m and counting in likely unwanted transactions by preventing them getting sucked into subscription traps with misleading e-commerce websites.
However, these unethical overseas-based e-commerce websites are finding new ways to lock New Zealanders into unwanted payments, and the bank is urging online shoppers to do due diligence before they hit “purchase”.
“Subscription traps” refers to the practice of e-commerce websites selling goods or services that may be legitimate, but entice customers to authorise misleading reoccurring subscription payments on their card and then making it difficult to cancel the payments.
Westpac NZ Head of Customer Care Operations Peter Barnes says Westpac’s payment block has been in place since April 2024. Ongoing improvements had doubled the value of transactions prevented, with more than $75,000 worth of payments now being blocked a day on average.
“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,” Mr Barnes says.
“Often people only realise they’ve signed up to a subscription until 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,” says Mr Barnes.
He says while Westpac is continuously working to keep customers safe, for example, the introduction of confirmation of payee, dynamic security codes on cards and enhanced fraud monitoring systems with biometric technology, he encourages customers to be careful when transacting 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,” says Mr Barnes.
“And to be doubly safe, make sure you’ve read the terms and conditions of any subscription service offer before proceeding.”
Top tips for spotting “subscription traps”:
- 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.
