Bad News for Automatic Renewals: Startups Making It Easy to Cancel

For organizations looking at the potential of launching membership programs based on automatic renewals, you may want to keep an eye on the recent spate of startups that are designed to allow users to cancel services at a click of a button.

If your organization relies on automatic renewals, you may have a new headache to worry about.

As the phenomenon of automatic subscriptions has grown increasingly popular in the for-profit space, consumers have become increasingly concerned about so-called “zombie charges,” and a handful of startups have come about with the goal of making it easy to stop recurring charges dead in their tracks.

Trim and Truebill, which work akin to next-generation versions of the personal-finance software Mint, help inform consumers of monthly or yearly charges that may have been forgotten. Trim is driven by messaging platforms like Facebook and texting; Truebill relies on mobile apps.

Truebill Founder Yahya Mokhtarzada said he started his platform after he discovered he had been charged for an airplane WiFi service for months. Truebill, he told Fortune, is designed to make it as easy as possible to cancel services—even those like gym memberships that require a written letter to terminate.

“Every (method) we use to cancel, we document the quickest way to do so,” Mokhtarzada told the magazine last year.

Both services are free and feature capabilities beyond subscriptions, such as the ability to catch overdraft charges.

“Anything that you can do on your mobile banking app, you can do with Trim, with the exception of moving money,” Trim CEO and Cofounder Thomas Smyth said in a TechCrunch article last year.

While the problem generally hasn’t involved membership organizations, it could prove a problem for organizations that have jumped out early on the auto-renewal trend, which has been a growing topic of interest in the association space in recent years—though not without skepticism.

(Truebill screenshot)

Ernie Smith

By Ernie Smith

Ernie Smith is a former senior editor for Associations Now. MORE

Got an article tip for us? Contact us and let us know!