The Government has outlined a clampdown on online rip-offs, including tackling subscription traps and fake reviews.
“Consumer catfishes” behind bogus online ratings will be targeted by rules that will make it automatically illegal to pay someone to write, or host, a fake review, the Government said.
Alongside this, businesses which offer subscriptions will be required to make it clear exactly what consumers are signing up for and allow them to cancel easily.
Regulators will also be helped to stamp out other tactics which are used to manipulate people searching online for goods and services.
These include tactics that manipulate consumers into spending more than they wanted to, and negative nudges, including when businesses pay to have their product appear highly on a trader’s website while hiding the fact that they paid for it.
The Government will also change the law so that prepayment schemes such as Christmas savings clubs have to safeguard customers’ money.
For the used car and home improvement sectors, where consumers often make big one-off purchases, the Government will also make it mandatory for businesses to take part in arbitration or mediation where disputes arise over a transaction.
This is in order to help avoid consumer gripes being dragged through the courts.
The proposals are part of a new consultation on reforming competition and consumer policy to give the Competition and Markets Authority (CMA) enhanced powers to tackle consumer rip-offs and bad business practices.
Under the plans, the CMA will be able to wrap up investigations faster and impose stronger penalties on firms breaking the law or failing to co-operate with the regulator’s work.
The Government said there will be tough penalties for non-compliance, with new powers for the CMA and similar enforcers to hit unscrupulous traders who breach consumer law with fines of up to 10% of their global turnover.
Company directors making false declarations to the regulator could be disqualified.
To speed up processes, the CMA will also be able to enforce consumer law directly rather than having to go through a court process that can take months or years.
‘The Government must now ensure that these proposals are swiftly implemented’
Business Secretary Kwasi Kwarteng said: “The UK’s economic recovery relies on the strength of our open markets and consumers’ faith in them.
“By delivering on our commitment to bolster our competition regime, we’re giving businesses confidence that they’re competing on fair terms, and the public confidence they’re getting a good deal.”
Rocio Concha, Which? director of policy and advocacy, said: “The pandemic has highlighted weaknesses in UK consumer protections that have allowed unscrupulous businesses to exploit customers, while our competition regime has been in need of an update to deal with the challenges of digital markets.
“The Government must now ensure that these proposals are swiftly implemented, and are underpinned by the right resources at a local and national level, so that consumer protection is strengthened.”