The Competition and Markets Authority (CMA) has launched a consultation on trader recommendation sites in an effort to address concerns about misleading claims, a lack of effective vetting, and poor complaints and sanctions processes in the sector.
In partnership with National Trading Standards (NTS), Trading Standards Scotland (TSS), the Society of Chief Officers of Trading Standards in Scotland (SCOTSS) and the Northern Ireland Trading Standards Service (NITSS), the CMA has identified a number of concerns with trader recommendation sites and apps which it says could result in consumer harm.
These include claims that traders can be trusted when in fact they have not been subject to any vetting or monitoring; failures to deal appropriately with problematic traders; ineffective or inaccessible complaints-handling processes; and the misleading presentation of consumer reviews, including fake reviews.
As a starting point for the consultation, the CMA has published draft guidance which sets out the principles trusted trader platforms should follow to stay on the right side of consumer law. The guidance outlines six key principles, which state that trader recommendation sites should:
- ensure that claims about services and the traders on their sites are clear and accurate, and do not mislead consumers;
- conduct appropriate checks before traders are allowed to advertise on their site;
- have accessible, transparent and effective complaints processes;
- effectively monitor the performance of traders on their site;
- act effectively on issues highlighted by complaints or monitoring activities, including imposing sanctions, and;
- have an effective, transparent and impartial process concerning online consumer reviews.
George Lusty, CMA Interim Executive Director for Consumer Protection, said: “More and more people are using sites and apps like these to help them find the right trader, from rewiring the kitchen to fixing a leak. But we’ve seen worrying evidence suggesting people could be misled into thinking these sites actually check traders – and will take action when things go wrong – which isn’t the case.
“That’s why we’re creating advice: to make sure trader recommendation sites know what their obligations are under consumer law and what they need to do to protect people using their sites.
Mike Andrews, National Coordinator for the NTS eCrime Team, said: “We are working with the CMA, and other Trading Standards partners, to make sure consumers get better protection and service from trader recommendation sites. Consumers rely on these platforms to put them in touch with competent and honest traders that can satisfy their needs, and who won’t deliver a poor quality service.
“Protecting consumers is at the heart of everything we do, and this draft advice is the start of ensuring that platforms take their responsibilities to vet and verify those traders they promote much more seriously. And, should things go wrong, that they provide consumers with a way to complain.”
Interested parties have until 16 August 2024 to respond to the CMA’s consultation, following which a finalised version of the advice will be issued, together with practical tips to consumers on how to safely use trader recommendation sites.
CTSI recently relaunched its Approved Code Scheme, which requires its members to follow a strict Code of Practice. The scheme currently includes more than 45,000 businesses across eight sectors and aims to reduce consumer detriment by establishing core principles of effective customer service and consumer protection that go beyond the obligations laid out in consumer law.
