For many people, it has become standard practice to check an online review website before buying an expensive item, booking a holiday, trying out a new restaurant, or using a tradesman such as a plumber or electrician. But can we trust the reviews? How do we know they are genuine?
Recent research suggests that many online reviews are fake. And the situation seems to be getting worse, with many companies paying third-party agencies (often based outside the UK) to create fake reviews using fake identities.
That’s why the government has just announced a tightening up of the rules around online reviews - including making it illegal to pay someone to write (or host) a fake review.
Putting the onus onto host websites (as well as the company being reviewed) is an even more effective way of tackling the problem, because it creates an obligation for sites such as TripAdvisor, TrustPilot, etc, to ensure that the millions of reviews that they host are actually genuine.
What is being proposed regarding online shopping?
A plan to stop online consumer rip-offs has been outlined by the government. This includes making it illegal for people to write or host fake reviews. The proposals would see bigger fines for firms that trick consumers into spending more than they want to online. In addition, businesses offering subscriptions would also be required to make clear exactly what consumers are signing up for, and allow them to easily cancel the subscription if they want to.
The consumer organisation Which? suggest the plans should be implemented as soon as possible. Rocio Concha, Director of Policy and Advocacy at Which? said that the pandemic has highlighted weaknesses in consumer protections that allowed "unscrupulous businesses to exploit customers".
Under the new rules, regulators will be given powers to stamp out dubious tactics used to manipulate people buying goods and services online. This includes punishing businesses that trick customers into spending more than they want to. The new rules will also stop companies from using ‘negative nudges’ (when businesses pay to have their product feature highly on a trading website, while hiding the fact that they paid for this).
What else is the Government proposing?
The government says it will also clamp down on pre-payment schemes such as Christmas savings clubs (where customers choose Christmas hampers many months in advance, and then make regular payments towards the goods throughout the year). The Government is proposing that this type of scheme would have to safeguard customers' money. This will help to prevent another situation similar to when ‘Farepak’ went bust in 2006, resulting in thousands of people losing their Christmas savings.
For the used car and home improvement sectors, where customers often make big one-off purchases, the government will make it mandatory for businesses to take part in arbitration or mediation when disputes arise, to prevent these disputes having to be dragged through the courts.
How will the new rules be enforced?
The government's proposals are part of a new consultation on reforming competition and consumer policy to give the Competition and Markets Authority (CMA) enhanced powers to tackle consumer rip-offs and bad business practices.
The CMA will also be able to enforce consumer law directly, rather than having to go through a court process. The CMA will also be required produce regular "state of competition" reports under the plans to look at the vibrancy of competition in the UK's markets.
There will be tougher penalties for those who break the law, with new powers for the CMA to issue fines of up to 10% of a firm's global turnover. Other punishments which the CMA could enforce include disqualifying company directors who make false declarations to the regulator, and also being able to block so-called ‘killer acquisitions’, where big companies buy-up prospective rivals before they can launch new services or products.
What do the experts say?
According to the Consumer and Small Business Minister Paul Scully: "When consumers part with their hard-earned cash, they've got every right to expect they'll get their money's worth. Cowboy builders aren't welcome in 21st century Britain."
Kwasi Kwarteng the Government’s Business Secretary said the government was "giving businesses confidence that they're competing on fair terms, and the public confidence that they're getting a good deal."
Darren Bugg, Editor of The Customer Service Blog, said: “All the new rules relating to consumer protection are very welcome. But the part of these proposals that I find most intriguing is the proposal to outlaw fake online reviews. How can you prove an online review is fake? And how do you distinguish between an online review that is ‘fake’ and an online review that is ‘untrue’? For example, if a genuine customer writes a malicious review for ulterior motives, then would this constitute a ‘fake’ review under the new rules being proposed?”
© 2021 Darren Bugg