Skip to main content

News story

January 28, 2022

Consumer credit and competition law reforms

Consumer legislation in England and Wales aims to maintain lower prices, produce better products and services and uphold consumer rights. However, this legislation is inadequate at protecting consumers, and reforms are due.

The proposed reforms aim to safeguard consumers’ cash and eradicate the exploitation of online customers, as economic recovery from the COVID-19 pandemic relies heavily on the markets and consumers’ confidence in them.

The regulator and its powers

The Competition and Markets Authority (CMA) is the competition regulator in the UK. Current legislation is inadequate because the CMA is slow to act, and its sanctions are too weak to deter.

The government suggests that the reforms will give enhanced power to the CMA for breaches of consumer protection legislation such as increased financial penalties (up to 10% of a global turnover) and the ability to enforce consumer law directly rather than having to go through the process of taking the business to court.

The government hopes that the increased powers available to the CMA will hold businesses accountable and protect consumers from the following issues.

Subscription traps

The first issue identified for reform is subscription traps for online consumers, such as automatic subscription renewals and hidden fees.

In response to this commonly experienced issue, the government will start requiring businesses clearly to inform customers of what they are signing up for, the minimum contract terms and all relevant billing information. In addition, the proposal to make businesses allow the customer to choose whether to re-subscribe should tackle the problem of auto-renewal and make it easier to cancel subscriptions.

These changes are most likely to affect the digital services industry, and companies within that industry may need to alter their business models to accommodate the proposed changes.

Fake reviews

Another critical issue that threatens consumer confidence is online fake or misleading reviews. Not only do fake reviews distort the market, but they also undermine fair competition and ultimately undercut consumer trust in the market.

The Consumer Protection from Unfair Trading Regulations 2008 prohibit these unfair practices by businesses. However, in its reforms, the government intends to make it illegal to pay someone to write or host a fake review.

Dodgy business tactics

The final issue the government intends to tackle with its reforms is ‘dodgy business tactics’. For example, companies use websites to display their products in a particular order to influence consumer choice. These tactics limit consumers’ ability to make informed choices and harm fair competition as businesses can pay to have their products feature highly on a trader’s website without disclosing this.

These reforms are essential because consumer trust is key to economic recovery. Fair market competition will assist both big and small businesses. It provides more opportunities and ensures that companies provide the best possible service to their customers and do not use unfair tactics to influence the market. However, these reforms are undetailed proposals, so which reforms, if any, are brought into legislation remains to be seen.

Contact corporate lawyer Victoria Holland to check your company complies with consumer law and is ready for any planned changes in legislation.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

Stay in touch

Subscribe to our newsletter

Stay in touch

By completing your details and submitting this form you confirm you are happy for us to send you marketing communications and that you agree to our Website Privacy Policy and Legal Notice and to us using Mailchimp to process your data.


Sending

News/Insight

  • Why is clear contract drafting important?
    How simple contract clauses can protect your business.


    Read more
  • Ensuring equality: A legal guide to responsibilities and compliance
    Understanding equal opportunities in the workplace


    Read more
  • Navigating the Economic Crime and Corporate Transparency Act 2023: What it means for your business
    The Economic Crime and Corporate Transparency Act 2023 (the Act) represents a significant shift in the UK's approach to combating economic crime, improving corporate transparency, and anti-mo


    Read more
  • Blowing kisses, not boundaries
    Tribunal clears air on workplace etiquette.


    Read more
  • Estate planning: How not to make mincemeat of it!
    The High Court has confirmed that a will handwritten on the back of two cardboard food packages is legally binding.


    Read more

What they say...

  • C Smith, March 2025
    “As executor of a will it was a relief for a solicitor to act on my behalf as though no disputes it was still a lengthy and complex process. It was dealt with mostly by Charlotte B. who kept me informed at all times. She explained the process c

  • Marc, March 2025
    “RIAA Barker Gillette were engaged to handle a real estate transaction with unusual circumstances. As a non-UK resident unfamiliar with English conveyancing procedures, I felt completely satisfied with the depth of the information and explanati

  • Leigh, March 2025
    “Instructed Martin on my first property purchase. He was a delight to work with, kept me informed and updated regularly. It was an incredibly smooth and quick process. Couldn’t be happier.”

  • Ms Brownell, March 2025
    “Patrick was amazing from start to finish. He made the process so easy, and explained each step in detail ahead of time so I’d understand what would happen and when. He was incredibly organized and noted every detail, calling out things t

  • Roman Cassini, February 2025
    “Peter Wright – highly recommended solicitor, helped us though a complicated flat sale with consummate professionalism.”

Read more
Send this to a friend