New legislation aims to combat deceptive practices and secure shoppers’ savings
New legislation will strengthen protections for UK consumers by targeting fake reviews and subscription traps while ensuring savings schemes are safeguarded. These new measures empower the Competition and Markets Authority (CMA) with increased powers to directly tackle rogue businesses.
Under the proposed changes, it will become illegal to pay individuals to write or share fake reviews. Companies will also face stricter rules to ensure consumer reviews are verified and genuine. Additionally, subscription traps—where companies make it unnecessarily difficult for consumers to cancel contracts—will be tackled. Businesses will now be required to provide clearer information prior to entering subscription agreements, send reminders when free trials or low-cost introductory offers are ending, and ensure cancellation is straightforward, timely and low-cost.
Prepayment schemes like Christmas savings clubs will now be required to protect customers’ money through insurance or trust accounts. These measures address situations where companies go bankrupt, such as the 2006 collapse of Christmas savings club Farepak, which left thousands of customers out of pocket. These reforms will ensure shoppers’ money remains safe even in such instances.
The CMA will gain the ability to award direct consumer compensation and impose financial penalties of up to 10% of a business’s global annual turnover or £300,000 for individuals—without the need to go through lengthy court procedures.
Paul Scully, Consumer Minister, commented: “We’re ensuring that protections match the demands of a digital economy. Consumers deserve better, and these measures will tackle deceptive practices while supporting ethical businesses.”
Data suggests that the average UK household spends around £900 annually influenced by online reviews and £60 on unwanted subscription services. Matthew Upton, Director of Policy at Citizens Advice, welcomed the reforms, noting: “With budgets under strain, it’s a relief to see action to prevent consumers from losing money to deceptive practices.”
CMA chief Andrea Coscelli added that these changes are a “crucial step to ensure fair markets and enhanced consumer protection.” The CMA will work closely with the government to expedite the legislative process so consumers and businesses can benefit from these new protections as soon as possible.
