Fake reviews are to be outlawed and consumers will have more chances to get out of subscriptions they do not want under a package of measures proposed by the UK government to stop people being ripped off online.
Under the measures, it will be illegal for businesses to pay someone to write or host a fake review for a product or service, and sites hosting consumer verdicts will have to take reasonable steps to check they are genuine.
There will also be new, clearer rules for businesses to make it easier for customers to opt out of “subscription traps”, where they are stuck paying for something longer than they want.
Companies will be required to remind customers that a free trial or introductory offer is coming to an end, warn them before a contract automatically renews, and will have to allow people to exit a contract in a straightforward way.
As part of measures designed to improve consumer protection, the government will give the competition watchdog more powers to tackle rip-offs and poor business practices, including being able to fine companies.
If the plans pass into law, the Competition and Markets Authority will be able to enforce consumer law directly, and will have the power to fine businesses up to 10% of their global turnover for mistreating their customers.
Previously, consumers have had to take action through the courts, which can be a lengthy process.
At a time when many consumers are cutting back on unnecessary spending, amid soaring bills and a cost of living crisis, the government has calculated that the average UK household spends about £900 each year after being influenced by online reviews, while a further £60 is spent on unwanted subscriptions.
“No longer will you visit a five-star-reviewed restaurant only to find a burnt lasagna or get caught in a subscription in which there’s no end in sight,” said consumer minister Paul Scully.
“Consumers deserve better, and the majority of businesses out there doing the right thing deserve protection from rogue traders undermining them.”
The government has already trailed the fact the measures will also give more protection to users of prepayment schemes such as savings clubs – where people put money aside for Christmas, or to pay for other items, usually over the course of a year – which will have to safeguard customer money through insurance or trust accounts.
When the Christmas hamper business Farepak collapsed in 2006, more than 100,000 people were left unable to access the money they had saved, and it sparked calls for greater protection for consumers who use these schemes.
Money that people pay into savings clubs is not protected by the UK’s Financial Services Compensation Scheme, unlike cash held in current and savings accounts.
The government said the coronavirus pandemic, which prompted a boom in online shopping, had also highlighted bad practices such as fake reviews.