The purpose is not to "make money on people forgetting to cancel."
The fact of the matter is that many more people buy when a free trial is offered. If your competitor offers a free trial, and you don't, they get more sales than you.
It's "risk reversal". Similar to a "30 day money back guarantee". People are attracted to the idea of there being no risk to trying this and not liking it.
I think a better one is to just never auto-charge after the trial, and lock down your service asking them to start a plan for the main service after the trial.
In that case, offer a limited billing period in line with the trial time period (30 days in your example) and ask the customer for an extension at the end of the billing cycle. If your theory of "risk reversal" is true, they will extend the subscription. It's a win-win, consumers register for "risk reversal" and business get the chance to demonstrate their services.
You can still de-risk the proposition by offering a money back guarantee. Or indeed a free trial where the user gets prompted to confirm they want to subscribe when they try to login in after the free period is up - not a massive issue when the service is actually worth paying for to them. Or indeed a free trial where there's no automation at all and company negotiates a contract with the salesperson after the free period is up.
The only people affected by losing no-confirmation autobilling are those who make non-trivial portions of their revenue on people forgetting to cancel. And the industries and businesses that HAVE to rely on that deserve to fail, frankly.
Only unethical if you obscure the fact that people are signing up for a recurring bill and/or hope they forget to cancel despite not using the service.
A lot of good software works just like this regarding the free trial. The program works for 30 days or 10 uses or such and then disables saving until you buy it. If the software is terrible you simply stop using it. If you found it useful and want to keep editing whatever files you made with it, then you buy it. They don't tell you it is free for 30 days and then charge you at the end of the 30 days unless you figure out how to cancel it. (Often made to be a very difficult task.)
Many newspaper web sites now seem to operate under this model as well, so many free articles per month as a free trial, then a paywall. Sometimes the paywall offers a second tier of free trial, like unlimited articles for a month, and then they start charging. One would argue that the second tier has to start charging automatically otherwise people could simply get a free trial each month. Not so, the free trial is tied to a credit card number and name so the person can't simply keep renewing trials forever. The card policy on trials in this case should still be to get consent before starting the subscription and charging. Many people avoid these sorts of free trials after finding out that cancelling the paid subscription is nearly impossible, sometimes requiring sending through the post a letter in a certain format to an unpublicized address. Having the policy be that consent is required would likely increase the number of people being willing to accept free trials, and the number who subsequently subscribe because they actually like the content or product and not because they got tricked by dark patterns. Many dark pattern operating content providers might have to increase their quality though to retain customers.
It's not enough to have credit card policies on these things, subscriptions are so often abusive that legal reform is needed. In addition to requiring consent after the trial, auto-renewing subscriptions should never be allowed to be the only or default choice. Auto-renew should be something you have to opt in to and we need legal reform to require that disabling auto-renew must be simple, straightforward, and available.
I doubt that, there's a lot of companies that have free trials without automatic billing afterwards and they are doing just fine. The alternative to not have free trials but people cancelling and wanting their money back after a week is probably more administrative work than offering a non-automatic-billing trial.
Offer a free trial and then require the user to take further action to enable auto-renewal once the trial ends instead of preying on their forgetfulness.
Bonus: Let users pay with Paypal so that you show up on their authorized organizations list so that they can revoke your access to their money without jumping through your arbitrary hoops like having to make a phone call and talk to a high-pressure sales rep just to remove your grabby paw from their cookie jar.
I'll never forget the experience of canceling 24-Hour Fitness' recurring billing a decade ago. I had to schedule an appointment with their sales department in person and was berated with questions like "So, why have you decided to stop taking your body and health seriously?" by some smug prick sitting back in his chair with his feet on his desk. Such a stupid default system we have.
For physical products, it’s doesn’t make sense. You get chargebacks and high churn. You also get people who cheat the system with throw away emails. The business has to focus on catching these people and making it hard to cancel. These are things that don’t actually drive value for both the company and customer.
Best decision we made at a subscription CPG startup was cut our 1st month free promo and instead focus on creating a brand through marketing and high quality products. This allowed the company to successfully exit after only 5 years.
Companies that take the approach free trial approach burn their customers and get nailed by the government. A good example is a diapers subscription company that got nailed by the FTC ultimately leading to down round and giving up their subscription bundle.
This is already the case in certain jurisdictions. e.g. Quebec explicitly bans free trials that automatically rebill at the end of the trial period. Solution for most companies have been to offer a longer membership periods in Quebec. (e.g. Amazon Prime in Quebec is initially 13 months for $79.)
If you’re offering a free trail to actually let customers evaluate your product then you’ll probably be unaffected by this.