Subscription traps banned under plans to stop Brits being ripped off
Christmas savings clubs will also be subject to tougher rules.
Business Secretary Kwasi Kwarteng said the new regime will give the public confidence “they’re getting a good deal”.
Under the plans, businesses offering subscriptions will have to make it clear exactly what customers are signing up for and let them cancel easily.
It will also become illegal for firms to pay someone to write, or host, a fake review.
In the used car and home improvement sectors, where consumers often make large, important one-off purchases, the government will make it mandatory for businesses to take part in arbitration or mediation where disputes arise over a transaction. This means both sides won’t get dragged through the courts.
The government will also help regulators stamp out dodgy tactics such as manipulating shoppers into spending more time online and businesses hiding that they’ve paid to have their product feature highly on a trader’s website.
Prepayment schemes like Christmas savings clubs will have to safeguard customers’ money.
This would prevent scandals like Farepak happening again, where tens of thousands of people, many on low incomes, lost all they had saved for Christmas when the company went bust.
Under the proposals, the Competition and Markets Authority (CMA) will be given new powers to tackle unscrupulous traders.
The CMA will also be able to enforce consumer law directly rather than having to go through a court process that can take many months or even years.
Consumer and Small Business Minister Paul Scully said: “Business is built on trust. When consumers part with their hard-earned cash, they’ve got every right to expect they’ll get their money’s worth. Cowboy builders aren’t welcome in 21st century Britain.
“As we build back fairer, we will protect the UK public from being hoodwinked and help small businesses thrive.”
Rocio Concha, director of policy and advocacy at Which?, said: “The pandemic has highlighted weaknesses in UK consumer protections that have allowed unscrupulous businesses to exploit customers, while our competition regime has been in need of an update to deal with the challenges of digital markets.
“The government must now ensure that these proposals are swiftly implemented and are underpinned by the right resources at a local and national level, so that consumer protection is strengthened.”
Matthew Upton, director of policy at Citizens Advice, said: “Consumers face a constant barrage of tricks designed to make them spend more money than they wanted – and often more than they can afford.
“We welcome protections that will help consumers navigate the ever-changing landscape of how they buy goods and services.”