Consumer Protection Reform

This article looks at the proposed reforms to consumer protection.

On 20 April 2022 the UK Government announced significant reforms to consumer protection laws. The new measures are set to tackle:

1. Subscriptions contracts and auto renewal
2. Fake reviews
3. Preventing online exploitation of consumer behaviour
4. Enforcement

Subscriptions and auto renewal

Businesses will need to:

1. provide clearer information to consumers before they enter into a subscription contract.
2. remind consumers when a trial period ends, for example a free trial or a low-cost introductory offer and before the contract auto renews. The details of the trial period should be made clear to the consumer throughout the process.
3. ensure that it is simpler for consumers to exit a contract. The cancellation mechanism must be easy for consumers. This could be automated, but must be easy to locate, timely and require minimal information from consumers.

Fake reviews

Steps will be taken to prevent businesses from hosting fake reviews on their websites and ensure that they take reasonable steps to ascertain that they are genuine.  Businesses will be prohibited from:

1. instructing third parties or commissioning somebody to write a fake review.
2. hosting consumer reviews without taking reasonable steps to check they are genuine.
3. offering or advertising to submit, commission or facilitate fake reviews.

This places a burden on all websites and platforms that host reviews to take reasonable steps. Such a burden may be heavy given the difficulty in authenticating a review.

Preventing online exploitation of consumer behaviour

Measures are proposed to curb the exploitation of consumers by manipulation techniques such as “dark patterns”. This is a message designed to put pressure on the consumer to make a decision promptly without fully considering other factors, for example “Y amount of people are looking at this deal now”.

Enforcement

The Competition and Market Authority (“CMA”) aim is to deliver faster and more flexible investigations, creating greater incentives for businesses and individuals to inform the CMA of unlawful conduct.

The CMA will be given the power to fine businesses up to 10% of global turnover. Undertakings given to the CMA are to be made legally binding and a breach could attract a fine of up to 5% of turnover.

These reforms are at an early stage and no draft legislation has been published yet. However, the reforms seem to be a step in the right direction for consumer protection.

For further information call Jill Lawton on 01689887855 or by email jill.lawton@cwj.co.uk