Five new 'laws' to stop Brits being ripped off including fake review fines and a subscription trap ban
REFORMS designed to protect the public from being ripped off have been announced by the government.
Fake reviews, Christmas savings clubs and subscription traps will all be subject to new, tougher rules.
Business secretary Kwasi Kwarteng this evening announced that the government will make it compulsory for pre-payment schemes to protect customers' money.
There will also be changes to the used car and home improvement sector to "level the playing field for decent businesses who are doing the right thing".
It will become mandatory for firms to take part in arbitration or mediation when a dispute arises over a transaction.
Meanwhile, businesses will now have to make it clear exactly what customers are agreeing to when they sign up for a new subscription.
They will also have to make it easier for them to cancel to avoid subscription traps.
It will become illegal to pay, write or host a fake review in a bid to stamp out bogus online ratings.
The government will also help regulators stop dodgy tactics used to dupe online shoppers.
That includes "dark patterns" that manipulate shoppers into spending more and businesses not disclosing when they have paid to have their products featured highly on a trader's website.
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.”
Tougher rules are also being introduced for companies that breach consumer law – with fines of up to 10% of their global turnover.
The Competition and Markets Authority will also be able to enforce consumer law directly rather than having to go through a court process that can take years.
Here's what the announcement means for consumers.
More protection for savings clubs
The government said it will change the law so that prepayment schemes – such as Christmas savings clubs – will have to safeguard customers' money.
It will prevent scandals such as Farepak, which was a Christmas savings club that collapsed in 2006.
Customers were left out of pocket, without the goods they had paid for and unable to pay for Christmas.
Christmas savings clubs allow shoppers to pay for festive presents in instalments throughout the year, rather than all in one go.
"The change will 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," the government said in a statement.
Most of the major UK supermarkets including Tesco, Asda and Sainsbury's have a savings club, allowing customers to top up a card throughout the year and receive bonus in December.
The government is proposing to amend the Consumer Rights Act 2015 so that prepayment schemes must have safeguards for customers’ money.
This could be through taking out insurance in case the scheme as a whole collapses.
Used car and DIY complaints
The Government will make it mandatory for used car and home improvement 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 and levels the playing field for decent businesses who are doing the right thing.
There were 7,803 car and vehicle disputes last year and 293 home improvement complaints, mostly involving DIY shops.
In total, there were 757 new cases related to problems with new houses, according to figures from Resolver.
Currently, you have to refer a case to the relevant ombudsman to deal with if you can't sort out a dispute with a company.
First, you need to fully pursue the internal complaints process of the company you're in dispute with.
If the company refuses to sort out the problem, you should ask for a "letter of deadlock" to show you've done everything in your power to resolve the issue.
There is a specialist home improvement ombudsman and a motorist ombudsman that you can contact about your dispute.
Subscription traps
Brits currently spend up to £34billion a year on subscription services, many of which auto-renew for goods that are no longer wanted or needed.
Sometimes customers aren't even aware they are signing up for a monthly or weekly charge.
Under the new rules, businesses offering subscriptions will have to make it clear exactly what consumers are signing up for.
They will also have to let customers cancel subscriptions easily, to ensure people can spend their hard-earned cash with confidence.
Customers may be nudged to let them know they are still forking out, and make it easier for people to cancel them
Fake review fines
The fraudsters that post bogus online ratings will also be targeted by rules that make it automatically illegal to pay someone to write, or host, a fake review.
As was first reported by The Sun, websites will be forced to verify any reviews they host to stop consumers getting 'catfished' into too good to be true deals.
And ministers want to make it illegal to pay people to write false reviews too.
The Competition and Markets Authority would get extra powers to take action against those knowingly planting fake reviews, under the plans.
Insiders also hope it will help to end practises where rival firms write negative reviews about their competitors online in an attempt to boost their own businesses.
Dodgy online sales tactics
Some online sellers trick consumers into spending more than they intended to.
These tricks could include revealing hidden costs just before the shopper hits purchase, or suggesting products are about to sell out.
It will also help to stamp out "negative nudges", for example when businesses pay to have their product feature highly on a trader’s website while hiding the fact they paid for it.
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