Fake reviews and unavoidable hidden online charges – which cost consumers £2.2bn a year – are to be banned under new laws to force businesses to be more clear with shoppers.
Under the new rules, which will become law as part of the digital markets, competition and consumers bill currently progressing through parliament, mandatory fees must be included in the headline price or at the start of the shopping process, including booking fees for cinema and train tickets.
However, optional fees such as airline seat and luggage upgrades for flights – a huge revenue generator for airlines – will not be included in the measures.
Drip pricing occurs when consumers are shown an initial price for an item or service, only to find additional fees are revealed later in the checkout process.
Research suggests that drip pricing, where consumers are shown an initial cost only to find unavoidable fees added later, is widespread. More than half of entertainment providers, 56% of the hospitality industry, and 72% of the transport and communication sectors use the practice, according to the government.
Last year, consumer group Which? highlighted the scale of the problem of fake reviews, with research showing how, despite multiple interventions by the Competition and Markets Authority, groups offering fake reviews on sites such as Amazon, Google and Trustpilot were still thriving on Facebook.
Some analysts think that about one in seven reviews in the UK are not the real deal, with blame often directed at groups that proliferate on social media.
The government said new guidance would be created in the coming months, adding fake reviews to a list of banned practices, with website hosts held accountable for reviews on their pages.
New rules on clear labelling on supermarket shelves – via an update to the price marking order – are being planned after a competition watchdog investigation last year found unclear labelling was making it harder for shoppers to find the best deals.
Under the proposed changes unit pricing – ie per 100g or per 100ml – must be consistently applied across equivalent products, including promotions and special offers, helping consumers compare products easily.
The CMA found last year that unit prices were in some cases illegible, obscured or missing for online shoppers or on specific promotions.
Kevin Hollinrake, the minister for enterprise and markets, said: “Modern day shopping provides customers with more choice than ever before. But with that comes the increased risk of confusion, scams and traps that can easily cost the public more than they had planned.
“Today’s announcement demonstrates the clear steps we’re taking as a government to ensure customers can compare purchases with ease, aren’t duped by fake reviews, and have the sting of hidden fees taken away.”
Which? welcomed the ban on drip pricing and new rules on supermarket unit pricing but urged the government to take tougher action.
Rocio Concha, Which? director of policy and advocacy, said: “Further action may be needed to tackle the range of sneaky pricing tactics used to bump up the advertised price in areas like flight bookings.”
Concha added: “Millions of us use online reviews to help us choose a product or service, so it’s particularly disappointing to see ministers stop short of criminalising trading and hosting of fake reviews – a necessary step to deter unscrupulous businesses and make online platforms take greater responsibility. Ministers must look again at these proposals if they are to properly protect consumers.”
