20 Jul Fake reviews, rip-offs and subscription traps to be tackled under new plans | Business News
Paying someone to write or show fake customer reviews is going to become illegal under new plans unveiled by the government.
Businesses offering subscriptions will also have to offer clearer descriptions on what consumers are signing up for – and ensure they can be cancelled easily.
Other tactics used to manipulate customers into spending more than they wanted are also in the spotlight.
Meanwhile, pre-payment schemes that allow shoppers to save for Christmas will have to safeguard money that’s paid in.
It is hoped this will prevent a repeat of scandals such as Farepak, where some on low incomes lost their savings when the company collapsed.
New efforts are also being made to avoid consumer complaints being dragged through the courts.
Companies where consumers often make big one-off purchases, such as those providing used cars or home improvement, will be compelled to take part in arbitration or mediation whenever disputes arise over a transaction.
Consumer and small business minister Paul Scully said: “Business is built on trust. When consumers part with their hard-earned cash, they’ve got every right to expect they’ll get their money’s worth. Cowboy builders aren’t welcome in 21st-century Britain.
“As we build back fairer, we will protect the UK public from being hoodwinked and help small businesses thrive.”
Tougher penalties are going to be enforced for unscrupulous traders who fall afoul of these rules – and new powers mean regulators will be able to impose fines that are up to 10% of an offending company’s global turnover.
There could also be ramifications for bigger companies, as the Competition and Markets Authority will be able to block a wider range of harmful mergers.
This includes so-called killer acquisitions where big businesses snap up prospective rivals before they can launch new services or products.
Which? has urged the government to ensure these proposals are swiftly implemented, and warned the pandemic has exposed weaknesses in the current measures designed to stop unscrupulous businesses targeting customers.