Save, make, understand money

Household Bills

Hidden fees when shopping online to be banned

Hidden fees when shopping online to be banned
Paloma Kubiak
Written By:
Paloma Kubiak

Fake reviews and hidden fees that make shopping online more difficult and expensive are set to be banned, the government confirms.

Online shoppers are hit with £2.2bn of unavoidable but hidden fees each year, while many are duped by fake reviews to part with their money.

With reviews used by 90% of shoppers and contributing to the £224bn spent in online retail markets in 2022, the government “is committed to ensuring that the information available online is accurate and fair”.

To ensure people know what they’re spending upfront, a new law will ban hidden fees or dripped prices. This is where shoppers are shown an initial price for goods or services which is subsequently ramped up in the checkout stage as extra fees are added.

This is a widespread strategy and occurs in more than half of providers in the entertainment and hospitality sectors, and almost three quarters of instances across transport and communications.

The Department for Business and Trade said the new laws will make it easier for people to compare products and services, as mandatory fees must be included in the headline price or at the start of the shopping process, such as with booking fees for cinemas or train tickets.

However, optional fees such as airline seat and luggage upgrades for flights won’t be included.

These measures will be legislated for as part of the Digital Markets, Competition and Consumer (DMCC) Bill as it progresses through Parliament.

‘Risk of confusion, scams and traps’

Minister for Enterprise, Markets and Small Business, Kevin Hollinrake said: “From supermarket shelves to digital baskets – modern day shopping provides customers with more choice than ever before. But with that, comes the increased risk of confusion, scams and traps that can easily cost the public more than they had planned.

“Today’s announcement demonstrates the clear steps we’re taking as a Government to ensure customers can compare purchases with ease, aren’t duped by fake reviews, and have the sting of hidden fees taken away.”

The Government said it will work with the Competition and Market’s Authority to create new guidance in the coming months to tackle fake reviews which will be added to the list of banned practices, with website hosts held accountable for reviews on their pages. The Bill will also look at subscription traps.

The Price Marking Order (PMO), a piece of Retained EU Law which was last updated 20 years ago, will also be reformed so that traders display the final selling price and, where appropriate the final unit price (e.g., price per litre/kilogram) of products in a clear way.

Small shops that are currently exempt from the PMO will continue to be exempt from those specific measures.