UK will outlaw fake reviews and tackle ‘subscription traps’ | Competition and Markets Authority
Fake reviews must be banned and consumers will be more likely to opt out of subscriptions they don’t want as part of a package of measures proposed by the UK government to stop people being scammed online.
Under these measures, it will be illegal for companies to pay someone to write or host a false review of a product or service, and sites hosting consumer verdicts will have to take reasonable steps to verify that they are genuine.
There will also be new, clearer rules for businesses to make it easier for customers to opt out of “subscription traps”, where they are forced to pay for something longer than they want.
Companies will be required to remind customers that a free trial or introductory offer is coming to an end, notify them before a contract automatically renews, and must allow people to terminate a contract in an easy way.
As part of measures to improve consumer protection, the government will give the competition watchdog more powers to tackle scams and bad business practices, including the ability to fine companies .
If the plans are adopted, the Competition and Markets Authority will be able to directly apply consumer law and will have the power to impose fines of up to 10% of their worldwide turnover for mistreating their customers.
Previously, consumers had to file a lawsuit in court, which can be a lengthy process.
At a time when many consumers are cutting unnecessary spending, amid soaring bills and a cost of living crisis, the government has calculated that the average UK household spends around £900 each year after being swayed by online reviews, while another £60 is spent on unwanted subscriptions.
“You’re no longer going to visit a five-star restaurant just to find a burnt lasagna or get caught up in a subscription with no end in sight,” said Consumer Affairs Minister Paul Scully.
“Consumers deserve better, and the majority of businesses doing the right thing deserve protection from rogue marketers undermining them.”
The government has previously hinted that the measures will also give more protection to users of prepayment schemes such as savings clubs – where people put money aside for Christmas or to pay for other items, usually at the course of a year – who will have to protect clients’ money through insurance or trust accounts.
When Christmas basket company Farepak collapsed in 2006, more than 100,000 people were left unable to access the money they had saved, and it sparked calls for more great protection for consumers who use these programs.
The money people pay into savings clubs is not protected by the UK’s Financial Services Compensation Scheme, unlike cash held in checking accounts and savings accounts.
The government said the coronavirus pandemic, which has caused a boom in online shopping, has also exposed bad practices such as fake reviews.