Business

Plans unveiled to protect online shoppers from rip-offs and fake reviews

New rules will make it automatically illegal to pay someone to write, or host, a fake online review. 

A CLAMPDOWN on online rip-offs including tackling subscription traps and fake reviews has been outlined by the UK government.

It said "consumer catfishes" behind bogus online ratings will be targeted by rules that make it automatically illegal to pay someone to write, or host, a fake review.

Businesses offering subscriptions will also be required to make clear exactly what consumers are signing up for and allow them to cancel easily.

Regulators will also be helped to stamp out other dodgy tactics used to manipulate people browsing for goods and services online.

These include tactics that manipulate consumers into spending more than they wanted to, and negative nudges, such as when businesses pay to have their product feature highly on a trader's website while hiding the fact they paid for it.

The government will also change the law, so 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 make it mandatory for businesses to take part in arbitration or mediation where disputes arise over a transaction, helping avoid consumer gripes being dragged through the courts.

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."

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 per cent of their global turnover.

Businesses that refuse or give misleading information to enforcers could face civil fines.

Plans would allow the CMA to impose penalties for companies that do not comply with its investigations or orders equating to up to 5 per cent of annual turnover, plus daily penalties up to 5 per cent of daily turnover while any non-compliance continues.

Company directors making false declarations to the regulator could be disqualified.

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."

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