New Forest

10/05/2022

Strengthening consumer protection and enforcement

The Government is bolstering consumer rights, strengthening the enforcement powers of the Competition and Markets Authority (CMA), and supporting consumers in resolving their own disputes without having to go the courts.

Plans include making it clearly illegal to pay someone to write or host a fake review, so people are not cheated by bogus ratings. The government is consulting on a new law against:

  • commissioning someone to write or submit a fake review;
  • hosting consumer reviews without taking reasonable steps to check they are genuine; or
  • offering or advertising to submit, commission or facilitate fake reviews.

There will also be clearer rules for businesses to make it easier for consumers to opt out of subscriptions, so they are not stuck paying for things they no longer want. Prepayment schemes like Christmas savings clubs will have to fully safeguard customers’ money through insurance or trust accounts. Under new rules, businesses must:

  • provide clearer information to consumers before they enter a subscription contract;
  • issue a reminder to consumers that a free trial or low-cost introductory offer is coming to an end, and a reminder before a contract auto-renews onto a new term; and
  • ensure consumers can exit a contract in a straightforward, cost-effective and timely way.

The enforcement of consumer law is also being strengthened. The CMA, instead of a court, will be able to award compensation to consumers and directly impose financial penalties for:

  • breaking consumer protection laws, with penalties worth up to 10% of global annual turnover for businesses or up to £300,000 in the case of an individual.
  • breaching undertakings given to the CMA, with penalties worth up to 5% of a business’ annual global turnover or up to £150,000 for an individual, and additional daily penalties for continued non-compliance.
  • non-compliance with an information notice, concealing evidence or providing false information, with penalties worth up to 1% of a business’ annual global turnover or up to £30,000 for an individual, and additional daily penalties for continued non-compliance.

The government is also supporting consumers and traders to resolve more disputes without court action by improving Alternative Dispute Resolution (ADR) services in consumer markets. This includes amending the ADR Regulations 2015 to improve the quality and oversight of ADR services and requiring businesses offering consumers dispute resolution services to be accredited against these regulations.

See: New rules to protect consumers’ hard-earned cash  – GOV.UK (www.gov.uk)

For more information on this, please contact Michaela Johns on 023 8046 1256.

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