Oversubscribed?
Don't give them more in '24!
In an era of digitization, subscribing to various services has become commonplace in both the United States and Europe. However, recent legal action taken by the New York Attorney General, Letitia James, against SiriusXM, reveals the challenges consumers face when attempting to discontinue/cancel subscriptions. The issue is not confined to the U.S., as European consumers, too, struggle with the financial consequences of the subscription culture.
The trap: click to subscribe, but call to cancel
Streaming services and digital subscriptions were meant to liberate consumers from costly cable packages.
However, a Forbes survey reveals that 86% of Americans subscribe to more than one streaming service, with average monthly fees of $40. Bizarrely, nearly half of these subscribers rarely use the services they pay for.
This habit extends beyond entertainment, with additional subscriptions for software, news, and fitness, contributing to an accumulation of wasted expenses.
The proposed click-to-cancel provision by the Federal Trade Commission aims to make it as easy to cancel a subscription as it is to sign up. However, the proposal faces resistance from various industries.
The European dilemma: 'subscription creep' creates financial stress
European consumers are also dealing with a phenomenon called 'subscription creep.' The 2023 European Consumer Payment Report by Intrum reveals that escalating costs of monthly subscriptions take 45% of consumers by surprise. The financial burden is made worse by the difficult economic situation, with 76% of consumers either just breaking even or overspending each month.
Younger generations, particularly Millennials and Gen Z, are more susceptible to 'subscription creep,' with over half of them struggling to keep track of their subscription expenses.
The study also highlights the rise of Buy Now, Pay Later (BNPL) arrangements as a coping mechanism for high interest rates and inflation. While these flexible payment options provide relief, 35% of consumers find it difficult to monitor their BNPL purchases, indicating a weakness in personal finance management.
The struggle to stay afloat.
The overspending trend is evident in America and Europe. As inflation grows faster than salaries, consumers find themselves with reduced spending power. The impact is felt not only in discretionary spending, but also in failure to cover essential bills in time.
The lack of financial resilience is worrying, with 20% of European consumers admitting to having no savings to fall back on.
There is an urgent need for better subscription management and financial literacy. To avoid the subscription trap, it's essential to be vigilant, make informed choices, and ensure that convenience doesn't come at the cost of financial well-being.
__________________ oOo _____________________
TEFL & ESL teachers are welcome to use the ready-made materials below for their classes. A recording of the text in an authentic British accent is also available. Just ask!
Too many subscriptions
The widespread use of subscription services in the United States and Europe highlights the challenges consumers face when trying to cancel such services. Despite the initial promise of liberating consumers from costly cable packages, many individuals subscribe to several services they rarely use.
The US Federal Trade Commission proposes a simple 'click-to-cancel' provision, but it faces resistance from various industries. In Europe, consumers experience 'subscription creep,' where escalating costs catch them off guard. Many consumers just break even or overspend, contributing to financial stress. Younger generations, particularly Millennials and Gen Z, struggle with tracking subscription expenses and resort to Buy Now, Pay Later arrangements to cope with high interest rates and inflation.
In the U.S. and Europe, overspending and financial strain are apparent, affecting the ability to cover essential bills. The lack of financial resilience is concerning, with 20% of European consumers admitting to having no savings. Better subscription management and financial literacy to avoid falling into the 'subscription trap' and maintain financial well-being is essential.
Question forms: The bolded words are the answers, but what are the questions?
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For example: What does the widespread use of subscription services in the United States and Europe highlight? The challenges consumers face when trying to cancel such services.
Answer key to question forms.
What do many individuals subscribe to?
Who does it (the provision) face resistance from?
What do younger generations, particularly Millennials and Gen Z, struggle with?
What percentage of European consumers admit to having no savings?
Exercise: Fill in the blanks with the appropriate words from the text
The wi__________ use of subscription services in the United States and Europe highlights the challenges consumers face when trying to ca__________ such services. Despite the initial promise of liberating consumers from costly cable packages, many individuals su__________ to several services they rarely use.
The US Federal Trade Commission proposes a simple '_cl____to_ca________' provision, but it faces re__________ from various industries. In Europe, consumers experience 'subscription cr__________,' where escalating costs catch them off guard. Many consumers just br________ even or overspend, contributing to financial stress. Younger generations, particularly Millennials and Gen Z, struggle with tracking subscription _ex_________ and resort to Buy Now, Pay Later __arr_______________ to cope with high interest rates and inflation.
In the U.S. and Europe, overspending and financial st________ are apparent, affecting the ability to cover essential bi__________. The lack of financial resilience is concerning, with ______%___ of European consumers admitting to having no savings. Better subscription management and financial literacy to avoid falling into the 'subscription _tr______' and maintain financial well-being is essential.
Exercise: True or False
1. The widespread use of subscription services in the United States and Europe creates challenges for consumers in cancelling such services.
2. The US Federal Trade Commission faces support from various industries for its 'click-to-cancel' provision.
3. In Europe, consumers experience 'subscription creep,' where decreasing costs catch them off guard.
4. Younger generations, such as Millennials and Gen Z, find it easy to track subscription expenses.
5. Overspending and financial strain are not visible in the U.S. and Europe, affecting the ability to cover essential bills.
6. A significant percentage of European consumers admit to having no savings, indicating a lack of financial resilience.
7. The text suggests that better subscription management and financial literacy can help avoid falling into the 'subscription trap' and maintain financial well-being.
Many thanks to my subscribers!