The Government has launched a consultation designed to help improve transparency, fairness and clarity for shoppers following the publication of research indicating the widespread use of hidden fees, as well as a prevalence of fake reviews and misleading labelling practices.
The new research shows that so-called ‘drip pricing’ – where the price paid at checkout is higher than originally advertised due to extra fees – is practiced by more than half of businesses in the entertainment (54 percent) and hospitality (56 percent) industries, and by almost three quarters of businesses in the transport and communication (72 percent) sectors. In total, this costs UK consumers £1.6bn online each year, the Government says.
The ‘Improving Price Transparency and Product Information for Consumers’ consultation has been published by the Department for Business and Trade (DBT) in an effort to “help consumers with the cost of living”.
The Government is seeking views from anyone who has an interest, expertise, or experience in any or all of the consumer transparency proposals contained in the consultation, which can be completed here. The consultation closes on 15 October.
Minister for Enterprise, Markets and Small Business Kevin Hollinrake said: “From the shelves of supermarkets to digital trolleys, modern-day shopping provides a great wealth of choice. But fake reviews and hidden fees can make those choices increasingly confusing and leave customers unsure about what product is right for them.
“We’ll be listening to industry to ensure these new regulations work for businesses too and don’t generate unnecessary burdens, while at the same time providing a crucial safety net for consumers and their cash.”
The consultation also seeks to gather views on measures that will combat fake reviews, as initially announced in the Digital Markets, Competition and Consumers Bill (DMCC).
According to research commissioned by the Government in 2022, on the nine most frequently used e-commerce platforms by UK consumers, an estimated 11 to 15 percent of all reviews are fake.
The consultation will examine how consumers and traders can benefit from reviews that represent a genuine experience, while ensuring that businesses take an appropriate level of responsibility for reviews on their websites.
Finally, the consultation will look at how to simplify labelling on goods. Following a review of unit pricing practices by the Competition and Markets Authority (CMA), the DBT has put forward proposals to reform the Price Marking Order (PMO), which requires traders to display the final selling price and, where appropriate the final unit price of products in a clear way.
These changes are designed to ensure unit pricing is consistently applied, including to promotions and special offers, helping consumers compare products easily and identify what items represent the best value to them.
Sarah Cardell, Chief Executive of the CMA, said: “This consultation follows recommendations from the CMA to government to tighten the rules on how everyday items are priced on supermarket shelves as well as our work tackling fake reviews online.
“We’re very pleased to see this getting underway and it’s an important step toward clearer rules and greater transparency for people when shopping around for goods and services.
“We’ll feed into this consultation and continue our work in these areas, which we’ll be updating on later this year.”
Graham Wynn, Assistant Director for Consumer Policy at the British Retail Consortium (BRC) said: “The BRC fully supports practical, proportionate consumer protection measures and the level playing field they bring. It is important to keep the rules up to date to reflect changes in buying and selling methods. We look forward to engaging constructively on the proposals.”
Rocio Concha, Which? Director of Policy and Advocacy said: “The measures being consulted on will address longstanding concerns to help consumers make better informed decisions – whether shopping for products online or buying a weekly shop in the supermarket. Our research shows that fake reviews jeopardise consumer trust and are harmful to honest businesses that don’t purchase or incentivise people to post positive reviews.
“Customers also need clear pricing upfront when considering a product or service and should not find themselves having to pay for charges hidden until the checkout like mandatory booking fees. Supermarkets also need to make it easy to compare the unit price of everyday items to help consumers make informed choices during the cost-of-living crisis.”