Writing fake reviews online could be made illegal
A plan to crack down on online scams, including making it illegal for people to write or host fake reviews, has been presented by the government.
The proposals would result in higher fines for businesses that trick consumers into spending more than they want online.
Companies offering subscriptions would also be required to clearly state what consumers are signing up for and allow them to easily cancel.
Consumer champion Which one? said the plans should be “quickly implemented”.
Rocio Concha, which one? director of policy and advocacy, said the pandemic had exposed weaknesses in consumer protection that allowed “unscrupulous companies to exploit customers.”
According to the government’s proposals, regulators would receive help in removing tactics used to manipulate people seeking goods and services online.
This includes punishing companies that trick consumers into spending more than they want and “negative nudges” – when companies pay to have their product featured heavily on a merchant’s website while hiding the fact. that they paid for it.
The government has said it will also toughen prepayment programs such as Christmas savings clubs – where customers choose Christmas baskets and vouchers months in advance, then make regular payments for goods at the store. during the year.
According to plans, such programs should protect customers’ money in the future. The aim is to avoid scandals like Farepak, which saw tens of thousands of people lose everything they saved for Christmas when the company went bankrupt in 2006.
For the used car and home improvement sectors where consumers often make large one-off purchases, the government will require companies to participate in arbitration or mediation in the event of a dispute regarding a transaction, so that consumer complaints are not taken to court. .
For many of us, it has become almost second nature to consult a review site before purchasing or reserving anything from restaurants to vacation homes or shopping. Reviews are important, and that’s why a whole industry has been created by paying people to produce fake, positive reviews.
The regulator has been making noise trying to crack down for a while, but now the government wants to tighten the rules and make it illegal to pay someone to write or host a bogus review. Hitting the host sites as well as the business being reviewed is the easiest and potentially the most effective way to try and fix the problem, rather than playing around with the individual reviews that emerge.
The difficulty, as always, is going to be the application as regulators are always catching up. New teeth for the Competition and Markets Authority will help but can never provide full protection to consumers.
“Cowboy builders are not welcome”
Business Secretary Kwasi Kwarteng said the government “gives businesses the confidence that they are competing on a level playing field and the public’s confidence that they are getting a good deal.”
Consumer and Small Business Minister Paul Scully added: “When consumers part with their hard-earned money, they are entitled to expect value for their money. Cowboy builders don’t. are not welcome in 21st century Britain. “
The government’s proposals are part of a new consultation on competition and consumer policy reform to give the Competition and Markets Authority (CMA) increased powers to tackle consumer scams and scams. bad business practices.
The government has said there will be tougher penalties for those breaking the law, with new powers for the CMA to impose fines of up to 10% of a company’s worldwide turnover.
Other sanctions that the CMA could apply include the disqualification of company directors who make false statements to the regulator and the possibility of blocking so-called “murderous acquisitions”, where large companies capture potential rivals before they can launch. new services or products.
The AMC will be able to directly enforce consumer law, rather than having to go through court proceedings, the government said.
The watchdog will also have to produce regular ‘state of competition’ reports as part of plans to examine the strength of competition in UK markets.