Law will help customers conned by fake reviews
LAWS to stamp out fake reviews and subscription traps are being drawn up.
The competition watchdog will be given greater powers to crack down directly on rogue traders.
It will become illegal to pay someone to write – or host – bogus online ratings.
Businesses offering subscriptions will be required to make clear exactly what consumers are signing up for and allow them to easily cancel.
Prepayment schemes like Christmas savings clubs will also have to safeguard customers’ money through insurance or trust accounts.
These are not currently covered by the Financial Services Compensation Scheme. The move follows the collapse of yuletide savings club Farepak in 2006 – when thousands of savers were left unable to access their cash. Fake reviews will be tackled following consultation on new, three-pronged legislation. It will make it illegal to commission someone to write or submit a fake review. Offering or advertising to commission, submit or facilitate bogus write-ups would also be outlawed. So too will hosting consumer reviews without taking reasonable steps to check they are genuine.
The Competition and Markets Authority (CMA) would not have to resort to court. Instead it could award compensation to consumers and directly impose financial penalties worth up to 10 per cent of global annual turnover for businesses – or up to £300,000 in the case of an individual.
Consumer Minister Paul Scully said: “We’re making sure consumer protections keep pace with a modern, digitised economy. No longer will you visit a five starreviewed restaurant only to find a burnt lasagne or get caught in a subscription in which there’s no end in sight. The majority of businesses out there do the right thing and deserve protection from rogue traders undermining them.”
The average household is said to spend around £900 each year influenced by online reviews and £60 on unwanted subscriptions.
Matthew Upton, of Citizens Advice, said: “With pressure piling on household budgets, it’s good to see action that makes it easier for people to protect their cash. Measures on subscription traps are particularly welcome. We hope They’ll help bring unscrupulous traders to book.”
‘No longer will you visit a five star-reviewed restaurant only to find a burnt lasagne’