Govt crackdown on booking fees, hidden charges and ‘drip pricing’
The government has promised to clampdown on fake reviews and hidden fees in an attempt to help save people money.
It has launched consultations to look at both these issues, and a third consultation regarding labelling on goods.
Drip pricing is where the price paid at checkout is higher than originally advertised due to extra fees. In total, this costs UK consumers £1.6bn online each year.
Government research found that drip pricing occurs in more than half of providers in the entertainment (54%) and hospitality (56%) industries, and almost three quarters (72%) across transport and communication sectors.
Kevin Hollinrake, minister for enterprise, markets and small business, said: “Today’s measures will help people keep hold of their hard-earned cash and ensure they have the clearest and most accurate information upfront before they make a purchase.
“From the shelves of supermarkets to digital trolleys, modern-day shopping provides a great wealth of choice. But fake reviews and hidden fees can make those choices increasingly confusing and leaves customers unsure about what product is right for them.
“We’ll be listening to industry to ensure these new regulations work for businesses too and don’t generate unnecessary burdens, while at the same time providing a crucial safety net for consumers and their cash.”
Another consultation launching later today seeks views on measures to stop fake reviews, as initially announced in the Digital Markets, Competition and Consumers Bill (DMCC).
The aim is to ensure that consumers and traders will benefit from reviews that represent a genuine experience, while stamping out the purchase and sales of fake reviews, and ensuring firms take an appropriate level of responsibility for reviews on their websites.
Numerous studies have found that consumers are being misled by fake reviews, while social media is being used to hire people to write fictitious accounts of various products and services.
Labelling on goods
The final consultation launching today looks at how to simplify labelling on goods.
Following a review by the Competition and Markets Authority (CMA), the Department for Business and Trade has put forward proposals to reform the Price Marking Order (PMO).
The PMO requires traders to display the final selling price and, where appropriate the final unit price (e.g. price per litre/kilogram) of products in a clear way.
These changes will ensure unit pricing is consistently applied, including to promotions and special offers, helping consumers compare products easily and identify what items represent the best value to them.
Rocio Concha, Which? director of policy and advocacy, said: “The measures being consulted on will address longstanding concerns to help consumers make better informed decisions – whether shopping for products online or buying a weekly shop in the supermarket. Our research shows that fake reviews jeopardise consumer trust and are harmful to honest businesses that don’t purchase or incentivise people to post positive reviews.
“Customers also need clear pricing upfront when considering a product or service and should not find themselves having to pay for charges hidden until the checkout like mandatory booking fees. Supermarkets also need to make it easy to compare the unit price of everyday items to help consumers make informed choices during the cost-of-living crisis.”