A plan to crack down on online rip-offs including making it illegal for people to write or host fake reviews has been outlined by the government.
The proposal would see bigger fines for firms that trick consumers into spending more than they want to online.
Businesses offering subscriptions would also be required to make clear exactly what consumers are signing up for and allow them to cancel their subscriptions easily.
Consumer champion Which? said the plans should be “swiftly implemented”.
Under the government’s proposals, regulators would receive additional help to stamp out manipulative tactics used on people browsing for goods and services online.
This includes punishing businesses that trick consumers into spending more than they want to, and “negative nudges” – when businesses pay to have their product feature highly on a trader’s website while hiding the fact, they paid for it.
For the used car and home improvement sectors where consumers often make big one-off purchases, the government will make it mandatory for businesses to take part in arbitration or mediation where disputes arise over a transaction so that consumer gripes are not dragged through the courts.
For many of us, checking reviews have become almost second nature before buying or making bookings, in everything from restaurants to holiday accommodation or trades people. Reviews matter. That’s why a whole industry has been spawned paying people to churn out fake positive reviews.
The regulator has been making noises about trying to clamp down for a while, but now the government wants to tighten up the rules significantly. This would make it illegal to pay someone to write or host a fake review. Hitting the host sites as well as the company being reviewed is the easier and potentially more effective way of trying to tackle the problem, rather than playing whack-a-mole with individual reviews that emerge.
The new legislation will make it illegal for people to leave fake reviews which will be a welcome relief for the many businesses out there who play by the moral rules.
Other punishments which the CMA could enforce include disqualifying company directors who make false declarations to the regulator and being able to block so-called “killer acquisitions”, where big businesses snap up prospective rivals before they can launch new services or products.
The CMA will be able to enforce consumer law directly, rather than having to go through a court process, the government said.
The watchdog will also be required to produce regular “state of competition” reports under the plans to look at the vibrancy of competition in the UK’s markets.