New law proposals are set to ban “drip pricing” for online customers, as well as fake reviews. Firms will also be required to be clearer with price labels on supermarket shelves. The proposals follow a consultation on consumer transparency by the UK government, which found evidence of inadequate pricing clarity. “Drip pricing” occurs when shoppers see an initial price for a product or service, only for additional fees to appear later during the checkout process.
The practice was found to be widespread, being used by more than 50% of businesses in the hospitality industry and entertainment providers. Drip pricing is particularly prevalent in transport and communication sectors, with unavoidable fees costing customers as much as £2.2bn annually. Under the new legislation, mandatory fees must be included in headline prices online, and clear from the start of the booking process.
The new rules are set to come into force in spring 2022, with mandatory fees for optional add-ons, such as airline seat reservations or luggage upgrades, not included in the measures. The minister for enterprise, markets and small business, Kevin Hollinrake, stated: “From supermarket shelves to digital baskets, modern-day shopping provides customers with more choice than ever before. But with that comes increased risk of confusion, scams and traps that can easily cost the public more than they had planned.” Hollinrake said the proposed bill would help customers compare purchases and ensure they “aren’t duped by fake reviews.”
The Competition and Markets Authority (CMA) contributed to the new guidance to tackle fake reviews, which will make website hosts responsible for reviews on their pages. The proposed changes to the Price Marking Order (PMO) will require traders to display the final selling price, and the final unit price where applicable. The Department for Business said the proposed changes would ensure unit pricing is consistently applied, which would help shoppers compare like-for-like products and work out the best value
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