The UK Government recently launched a consultation containing various proposals to improve services for consumers and help them with the cost of living, by boosting transparency and fairness. The consultation covers five key areas of consumer information transparency, from pricing displays and ‘drip pricing’ to fake reviews and online platforms’ due diligence processes.
It’s important to keep up to date with current consultations and review your current sales practices accordingly, as they show the direction the Government intends to move in and what areas it is likely to enforce in future. If you would like to contribute to the consultation, you can find it here. The consultation closes on 15 October 2023.
We’ve briefly summarised the various proposals below; read on to find out how the Government aims to better protect consumers.
1. Display of pricing information
The Government has advised that it wants consumers to better understand the price make-up of products and services, while ensuring that the regulatory burden on businesses is not too onerous. The proposals include:
- reforming the Price Marking Order 2004 (PMO) so that the unit price for all products must be displayed by kilogram, litre, square metre, cubic metre or number. If items can be sold by weight or volume, the Government proposes that retailers should pick one measure and apply it consistently to all products in their store;
- providing that where a lower product price applies for certain groups (eg members of a loyalty programme), these prices should not be displayed any more prominently than the price non-members will pay;
- requiring that businesses show the promotional unit price for products on offer or promotion where practical;
- considering whether the current exemption from the PMO for small shops should continue to apply and/or whether a different criteria should be used (eg annual turnover or number of employees rather than floor area); and
- introducing a deposit return scheme for single-use drinks containers, with the deposit amount displayed separately so customers know what amount they can get back if they return the container.
2. Hidden fees and drip pricing
The Government is concerned about the practice of ‘drip pricing’, where customers are shown an initial price for a product and additional fees are introduced as the customer proceeds with the transaction. Customers will often continue with the transaction if they’ve invested their time in the purchase process, so end up paying more than they initially expected to pay. This practice can make it harder for customers to compare prices across different retailers, and the Government estimates that customers end up spending an additional £595 million to £3.5 billion online each year due to drip pricing.
The Government is consulting on whether further intervention is needed to address drip pricing, and whether all mandatory fixed fees (such as booking and processing fees) should be included in the up-front price. It is also consulting on whether mandatory variable fees (like delivery fees and car mileage costs) should be clearer up front, and how optional fees (like seat selection, accessories for electronics and insurance) could be made fairer and more transparent.
3. Fake reviews
Government-commissioned research from 2022 showed that 11–15% of all online reviews are fake, and that customers can’t spot well-written fake reviews. This can lead customers to choose poor quality products and create an unfair trading environment. The most common practice is traders paying for reviews that don’t reflect a genuine experience (this can be positive reviews posted on the trader’s own site or negative reviews posted on a competitor’s site). Traders may also cherry-pick or promote certain reviews on their site which can give a misleading impression of the overall reviews.
The Government is proposing to:
- make specific review-related practices automatically unfair in all circumstances; and
- make it clear that there is a legal responsibility on traders (including online platforms) to take appropriate steps to prevent reviews they choose to publish from deceiving consumers.
Under the proposals, traders will be required to take reasonable and proportional steps to prevent fake reviews. This is likely to mean traders will be required to have processes in place for assessing risk, detecting suspicious reviews, removing fake reviews and sanctioning those people that arrange for the posting of fake reviews. They will also likely be required to put mechanisms in place for consumers to report dubious activity.
The Government has emphasised that a business that publishes a single fake review is unlikely to face enforcement action, as that would create an onerous burden on traders, and that the CMA will work with the Government to set out guidance on how traders can fulfil their responsibilities.
4. Other issues being consulted on
The Government is also consulting on:
- how to better protect customers buying products through online platforms (such as online marketplaces, social media platforms and other websites where individuals sell to each other);
- whether to extend consumers’ private rights to redress (eg to where they have suffered harm due to a misleading omission or breach of professional diligence by a trader); and
- whether to allow additional enforcement bodies to make applications for online interface and interim online interface orders.
For guidance on how the current law protects consumers, don’t forget to check out our Quick guide to customer rights in online sales. You can also use our template terms and conditions, which help to set out your rights and obligations so that you and your customer are both on the same page when you’re selling online.
The content in this article is up to date at the date of publishing. The information provided is intended only for information purposes, and is not for the purpose of providing legal advice. Sparqa Legal’s Terms of Use apply.
Marion joined Sparqa Legal as a Senior Legal Editor in 2018. She previously worked as a corporate/commercial lawyer for five years at one of New Zealand’s leading law firms, Kensington Swan (now Dentons Kensington Swan), and as an in-house legal consultant for a UK tech company. Marion regularly writes for Sparqa’s blog, contributing across its commercial, IP and health and safety law content.