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Ye Haw - Cowboys Keep On Rolling
A Private Member's Bill to outlaw cowboy builders and sub-contractors has been withdrawn as it was doomed to failure without enough support in the...
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CMA Gets False Teeth And Other Powers
The government is to give the Competition and Markets Authority real teeth to tackle rip-offs and bad business practices such as writing and presenting fake and false reviews.
The Competition and Markets Authority (CMA) will be able to directly enforce consumer law, including new powers to fine firms up to 10% of their global turnover for mistreating customers. This replaces going through a court process which can take years.
The CMA will have stronger tools to tackle companies colluding to bump-up prices and to combat ‘killer acquisitions’ in which big businesses snap up rivals before they can launch new products or services.
The CMA, instead of a court, will be able to award compensation to consumers and directly impose financial penalties for:
Breaking consumer protection laws, with penalties worth up to 10% of global annual turnover for businesses or up to £300,000 in the case of an individual.
Breaching undertakings given to the CMA, with penalties worth up to 5% of a business’ annual global turnover or up to £150,000 for an individual, and additional daily penalties for continued non-compliance.
Non-compliance with an information notice, concealing evidence or providing false information, with penalties worth up to 1% of a business’ annual global turnover or up to £30,000 for an individual and additional daily penalties for continued non-compliance.
The government is also supporting consumers and traders to resolve more disputes without court action by improving Alternative Dispute Resolution (ADR) services in consumer markets. This includes amending the ADR Regulations 2015 to improve the quality and oversight of ADR services and requiring businesses offering consumers dispute resolution services to be accredited against these regulations.
“We’re making sure consumer protections keep pace with a modern, digitised economy. No longer will you visit a 5 star-reviewed restaurant only to find a burnt lasagne or buy from a contractor with a good review – that he wrote himself.”
– Paul Scully
Consumer Minister, Member of Parliament
Protecting good companies
“Consumers deserve better and the majority of businesses out there doing the right thing deserve protection from rogue traders undermining them,” added MP Scully at the launch of the new powers. “The average UK household spends around £900 each year influenced by online reviews just for day to day items let alone the amount spent on a once in a lifetime purchase.”
Plans include making it clearly illegal to pay someone to write or host a fake review and clearer rules for businesses to make it easier for consumers to opt out of subscriptions. Prepayment schemes will also have to be fully safeguard through insurance or trust accounts.
It will be law to issue a reminder to consumers that a free trial or low-cost introductory offer is coming to an end and a reminder before a contract auto-renews onto a new term. It will also be necessary to ensure consumers can exit a contract in a straightforward, cost-effective and timely way
Citizens Advice
Matthew Upton, Director of Policy at Citizens Advice, said: “With pressure piling on household budgets, it’s good to see action that’ll make it easier for people to protect their cash.”
Which?
Rocio Concha, Which? Director of Policy and Advocacy, said: “It’s very positive to see action to tackle the avalanche of fake reviews that undermine confidence in online shopping and tougher powers for the CMA to protect consumers from rogue companies that consistently flout the law - including the ability to fine firms directly.”
Mergers & acquisitions
On mergers, to reduce bureaucracy and keep the burden on smaller businesses to a minimum, government will exclude mergers between small businesses – where each party’s UK turnover is less than £10 million – from the CMA’s merger control altogether.
Picture: The Competition and Markets Authority will be getting their teeth into companies supplying burnt lasagne instead of a 5-star experience and will be pursuing contractors writing fake reviews of their services.
Article written by Cathryn Ellis
25th May 2022