Writing fake online reviews could be made illegal

New rules would outlaw companies paying consumer catfish to produce or host bogus write-ups

(Getty Images)

Writing fake online reviews could be made illegal under plans to crack down on firms deliberately ripping off customers.

Companies that pay so-called consumer catfishes to produce or host bogus product write-ups and ratings will face fines under the new proposals outlined by the government on Tuesday.

Businesses offering subscriptions would also be required to make explicit exactly what people are signing up for and allow them to easily cancel; while so-called negative nudging – when a company secretly pays to have their product feature high on a website – would be outlawed.

And customers making large one-off purchases off will have the right to take part in medication where disputes arise – so that they also do not have to drag companies through the courts to get money back.

The raft of measures form part of government plans to completely reform consumer rights by giving the Competition and Markets Authority enhanced powers to tackle bad seller practices.

The regulator would be able to impose penalties for companies that do not comply with its investigations or orders equating up to five per cent of annual turnover, plus daily penalties up to 5 per cent of daily turnover while any non-compliance continues.

Business Secretary Kwasi Kwarteng said: “The UK’s economic recovery relies on the strength of our open markets and consumers’ faith in them.

“By delivering on our commitment to bolster our competition regime, we’re giving businesses confidence that they’re competing on fair terms, and the public confidence they’re getting a good deal.”

He added that to speed up the entire process, the CMA would be able to enforce consumer law directly – rather than having to go through a court process that can take months or years.

Consumer champion Which? Welcomed the measures but said they should be implemented as soon as possible.

Rocio Concha, director of policy and advocacy, 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.”

Among other measures included in the proposals are for the CMA to be given the power to block a wider range of harmful mergers, including so-called killer acquisitions – where big businesses snap up prospective rivals before they can launch new services or products.

And to keep burdens on smaller businesses to a minimum, the Government is also proposing that mergers between small businesses, where each party’s turnover is less than £10 million, would be removed from the CMA’s merger control altogether.

Andrea Coscelli, chief executive at the CMA, said: “These proposals take forward many of the CMA’s suggestions for a swifter, stronger and more flexible competition and consumer protection regime, which will protect consumers and enable businesses to grow and thrive. We will respond to the consultation in due course.”