Government plans to make paying for or hosting fake online reviews illegal as average household now spends £900 a year influenced by ratings
- £23bn of consumer spending a year influenced by online reviews, says CMA
- New measures make it ‘clearly illegal’ to pay for or host a fake online review
- Calls for subscription services to be more ‘straightforward’ to cancel
- Ministers say ‘consumers deserve better’ as CMA crack’s down on rogue traders
Consumers are set to be better protected from fake online reviews and subscription traps under new planned measures to crack down on rogue traders.
These include making it ‘clearly illegal’ to pay someone to write or host a fake review, as well as making it easier for consumers to opt out of subscription services.
In a bid to protect consumers, websites hosting fake reviews will be criminally liable unless they take ‘reasonable steps’ to check the reviews are genuine, ministers said.
Ministers say ‘consumers deserve better’ following new laws say websites hosting fake reviews will be criminally liable unless they take ‘reasonable steps’ to ensure reviews are genuine
The proposed laws mean businesses small and large will need to outline steps taken to stop reviews misleading customers.
Plans to crack down on fake reviews also includes measures for clamping down on cartels and other practices that stifle competition, and giving new powers to the Competition and Markets Authority.
The new rules also require pre-payment schemes, such as Christmas savings clubs, to safeguard customers’ money through insurance or trust accounts, offering better protection to customers paying for goods and services in monthly instalments.
The move would mean customers are protected even if the company goes bust, such as the collapse of Christmas savings club Farepak in 2006, where thousands of customers were hit.
Fake reviews will be tackled by consultation 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 and offering or advertising to submit, commission or facilitate fake reviews.
Consumer Minister Paul Scully said: ’We’re making sure consumer protections keep pace with a modern, digitised economy.
‘No longer will you visit a five star-reviewed restaurant only to find a burnt lasagne or get caught in a subscription in which there’s no end in sight.
‘Consumers deserve better and the majority of businesses out there doing the right thing deserve protection from rogue traders undermining them.’
The CMA has estimated that £23billion a year of consumer spending is now influenced by online reviews — equivalent to around £900 per household, with an additional £60 a year spent on unwanted subscriptions.
Under new rules, businesses must provide clearer information to customers before they enter a subscription contract.
Businesses will be required to send reminders that free trials or introductory offers are coming to an end and must ensure consumers can leave a contract in a ‘straightforward, cost-effective and timely way’.
The new laws also mean the CMA, instead of a court, will be able to award compensation to consumers and directly impose financial penalties worth up to 10 per cent of global annual turnover or up to £300,000 in the case of an individual.
Citizens Advice director of policy Matthew Upton said: ‘With pressure piling on household budgets, it’s good to see action that’ll make it easier for people to protect their cash.
‘The measures to deal with subscription traps are particularly welcome.
‘We hope these will help bring unscrupulous traders to book and stop shoppers being duped by underhand tactics.’
Meanwhile, CMA chief executive Andrea Coscelli added: ‘This is an important milestone towards strengthening the CMA’s ability to hold companies to account, promote fair and open markets, and protect UK consumers.
‘The CMA stands ready to assist the government to ensure that legislation can be brought forward as quickly as possible, so consumers and businesses can benefit.’