Tuesday 20 July 2021 11:55 am

Fake reviews could be outlawed in consumer protection overhaul

Paying for someone to write or host fake reviews online could be made illegal under new plans to ramp up protection for consumers.

The government has unveiled proposals to crack down on fake reviews as part of a wider package of measures targeting “consumer catfishers” who use dodgy tactics to dupe online shoppers.

It has also put forward plans to give the Competition and Markets Authority (CMA) powers to fine companies up to 10 per cent of their annual turnover if they breach consumer law.

The crackdown comes weeks after the CMA opened an investigation into Amazon and Google over concerns the tech giants had not done enough to tackle fake reviews.

Other proposed changes include a clampdown on subscription traps to ensure businesses make it clear exactly what consumers are signing up for and make it easy to cancel.

Prepayment schemes such as Christmas savings clubs would be required to safeguard customers’ money, while for the used car and home improvement sectors – where consumers often make large one-off purchases – the government will make it mandatory for businesses to take part in arbitration or mediation where disputes arise over a transaction. 

“The UK’s economic recovery relies on the strength of our open markets and consumers’ faith in them,” said business secretary Kwasi Kwarteng.

“By delivering on our commitment to bolster our competition regime, we’re giving businesses confidence that they’re competing on fair terms, and the public confidence they’re getting a good deal.”

Regulator reforms

The proposed measures form part of plans to beef up the UK competition regulator to ensure it is equipped to tackle consumer rip-offs.

In addition to large fines for non-compliance, the government has proposed civil fines for businesses that refuse or give misleading information to enforcement agencies.

It is also considering potential financial penalties for firms that breach commitments made to regulators about changing their practices.

To speed up the process, the CMA will also be able to enforce consumer law directly rather than having to go through a lengthy court process.

“Competitive, well-functioning markets are the cornerstone of a thriving economy, and they require constant vigilance to maintain,” said CMA boss Andrea Coscelli.

“These proposals take forward many of the CMA’s suggestions for a swifter, stronger and more flexible competition and consumer protection regime, which will protect consumers and enable businesses to grow and thrive.”

It came as the government outlined proposals for new rules to be granted to the Digital Markets Unit (DMU) to crack down on anti-competitive behaviour by tech giants.

The DMU was launched in non-statutory form in April as a new division within the competition watchdog.