Government proposes to make fake online reviews illegal
The government has outlined plans to crack down on fake online reviews. Businesses that offer subscriptions would be required to detail exactly what a consumer signs up for. They should also allow them to cancel easily.
Consumer champion ”Which?” said the plans should be ”swiftly implemented”
”Which?” director of policy and advocacy Rocio Concha, said the pandemic had highlighted weaknesses in consumer protections that allowed “unscrupulous businesses to exploit customers”.
Details of the government’s proposals
The proposals would help regulators to stamp out tactics which businesses use to manipulate people buying goods online. This would come in the form of punishment for businesses that trick online customers.
Businesses would also be required to safeguard customers’ money in prepayment schemes such as Christmas savings clubs.
These are schemes where customers choose Christmas hampers and vouchers months in advance. They then make regular payments towards the goods over the course of the year.
The government looks to toughen their stance to prevent scandals such as Farepak. When the company went bust in 2006, tens of thousands of people had lost all their Christmas savings.
Consumers often make big one-off purchases in the used car and improvement sectors. When a transaction dispute arises within these sectors, businesses will be forced to take part in arbitration or mediation. This way, disputes are not dragged through court.
“When consumers part with their hard-earned cash, they’ve got every right to expect they’ll get their money’s worth,” consumer and small business minister Paul Scully said.
The plans by the government are set to give the Competition and Markets Authority (CMA) more power to handle bad business practices.
The CMA would be able to enforce tougher penalties such as fines of up to 10 per cent of a firm’s global turnover, and block ”killer acquisistions”- where big businesses snap up prospective rivals before they can launch new services or products.