Hidden fees on things like flights, gig tickets and food delivery are estimated to cost consumers £2.2bn per year. Research has found these fees can be more than 25% of the product price.
A ban on such fees is now in effect, with businesses required to include any mandatory fees in the headline price.
The new measures came into force yesterday (6 April) under reforms in the Digital Markets, Competition and Consumer Act 2024, passed under the previous Government.
All mandatory fees, such as admin fees or ticket booking fees, must now be included in the headline price and can’t be deceptively dripped in throughout the checkout process to dupe customers into paying more than they originally bargained for.
The ban aims to bring to an end the shock that online shoppers get when they reach the end of their shopping experience only to find a raft of extra fees lumped on top. For example, travellers buying train tickets will no longer be stung by a hidden booking fee when they get to the checkout.
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Justin Madders, minister for employment rights, competition and markets, said: “These changes will give consumers more power and control over their hard-earned cash, as well as help to establish a level playing field by deterring bad actors that undercut compliant businesses, helping to deliver economic stability as part of our Plan for Change.”
The new laws also impose bans on the use or commissioning of fake reviews. Various studies, including by Which?, have found that some social media sites enable and incentivise fake reviews.
Reviews were found to be used by 90% of consumers and contributed to the £217bn spent on online retail markets in 2023.
Under the new regime, website hosts are accountable for the reviews on their page. Businesses and online platforms will be legally required to take steps to prevent and remove the publication of fake reviews that are published on their websites. This could include, for example, having adequate detection and removal procedures in place to prevent fake reviews being published.
Sarah Cardell, chief executive of the Competition and Markets Authority (CMA), said: “We will use these new provisions to safeguard people from harmful and unfair treatment, and to foster the level playing field for the vast majority of businesses who want to do the right thing for their customers. We will be tackling the more egregious practices first and working hard to support businesses with compliance, conscious that – especially for small businesses – the burden of following the rules must be proportionate.”
