A UK consumer body will be cracking down on fake reviews and ‘subscription traps’ to shield the public from being scammed.
According to the new rules, it will be illegal to pay someone to write or host a fake review, so people are not cheated by bogus ratings.
‘Offering or advertising to submit, commission or facilitate fake reviews‘ will also get businesses in trouble.
Companies could be fined up to 10% of their global turnover or up to £300,000 in the case of an individual for misleading customers with fake reviews.
The new rules also takes on the problem of dodgy subscriptions that make it hard for people to opt out.
Businesses will now need to make it easier for consumers to end subscriptions so they aren’t stuck paying for services they no longer want.
Schemes like Christmas savings clubs will also have to safeguard customers’ money through ‘insurance or trust accounts’.
This move is a long time in coming since the 2006 ‘Farepak scandal’ where the collapse of Christmas savings firm Farepak led to a number of customers losing their money.
‘No longer will you visit a 5 star-reviewed restaurant only to find a burnt lasagne or get caught in a subscription in which there’s no end in sight,’ said Consumer Minister Paul Scully.
The average UK household spends around £900 each year influenced by online reviews and spends £60 on unwanted subscriptions.
The proposed law also hopes to safeguard people from ‘subscription traps’ in which businesses make it difficult to exit a contract. Under new rules, businesses must provide clearer information to consumers before they enter a subscription contract.
Businesses will also need to issue a reminder to consumers when their free trial is coming to an end, as well as a reminder before an automatic contract is renewed.
The rules will be enforced by the Competition and Markets Authority (CMA) which now has the power to directly fine firms found to be deceiving customers without having to take it to court. The CMA will also be able to award compensation to consumers who have fallen prey to fake reviews.
It’s still unclear how the regulator will identify a fake review but the onus might fall on platforms like Tripadvisor, Trustpilot, Facebook and Google to moderate them as with the Online Safety Bill.
The new measures are set to come into effect on a date pending parliamentary approval.
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