A crack-down on misleading consumer practices, including those which end up costing people money they aren’t expecting, has been set out in today’s Budget.
To help people make better-informed choices about how they spend their hard earned cash, the Chancellor Philip Hammond highlighted some of the details in the government’s upcoming Consumer Green Paper.
The paper, to be set out by the Secretary of State for Business, Energy and Industrial Strategy Greg Clark in the coming months, will closely examine markets which are not working fairly for consumers and reveal how the government intends to help.
Ending the cycle of subscription traps
People can end up in subscription traps after they sign up to a paid-for service without intending to, for example when a paid subscription starts automatically after a free trial. Payments can be deducted from their accounts even if it is not clear they have given companies permission to set up a recurring payment. Citizens’ Advice estimates that two million consumers each year have problems cancelling subscriptions and research last year revealed that 42% of British people are paying for at least one subscription they don’t use — most often gym memberships, credit reports, TV streaming services, and music streaming plans.
To tackle this, the government will swiftly develop options to stop people paying unexpected automatic fees for unwanted subscriptions, including ensuring consumers are notified in good time when a payment is about to be taken.
Shortening and simplifying small print
Terms and Conditions (T&Cs) can often be tens of thousands of words long, containing acronyms as well as complex legal and financial jargon that put consumers off reading them and not fully understanding what they are signing up to. The consumer watchdog Which? found that nine in ten people have agreed to T&Cs when buying a product or service online in the last year, but only 16% say they always read them. This means little incentive for firms to improve their T&Cs.
The government will therefore examine a range of options to make it clearer for consumers, including making the key T&Cs much more obvious, the standard usage of tick boxes, rankings on good practice, as well as improving understanding of which terms cause most confusion.
Introduction of new powers to impose fines on companies that mistreat customers
The government will allow consumer enforcement bodies such as the Competition and Markets Authority (CMA) to ask civil courts to order fines against companies, including those in unregulated markets, which breach consumer law. This will allow them to take stronger action to end unfair behaviour and act as a deterrent to discourage firms from mistreating consumers.